Governor says let legistalure approve MOHELA over MOHELA sale
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Governor says let legistalure approve MOHELA over MOHELA sale

Date: September 25, 2006
By: Kathryn Buschman and Lucie Wolken
State Capitol Bureau

JEFFERSON CITY - Governor Blunt conceded to threats of potential lawsuits Monday by agreeing to wait for legislative approval for his plan to sell $350 million worth of assets of the state's student loan program.

The Missouri Higher Education Loan Authority was scheduled to meet and vote on Wednesday in Chesterfield. The board could still vote, but the governor's office is proposing any action taken would have to wait until after the legislature reconvenes in January.

"I think what [it] means is in January when we come in one of the things we have to do is provide MOHELA some liability protection from frivolous charges such as what the attorney general is leveling right now, said Speaker Pro Tem, Carl Bearden, R-St. Charles.

"I'm just glad the governor realizes that no matter how worthy these projects are and how important they are to Columbia you've got to go through the General Assembly and comply with the Constitution and statues of the state," Chuck Graham, D-Columbia said.

MU would have received $94 million under the governor's plan-$84 million was alloted for a health sciences research center. Graham said the legislature's approval is the most effective way for the university to get the money. 

"It will be much quicker to go through the General Assembly than to have had these buildings tied up for years in litigation," Graham said. 

This latest postponement comes after Missouri Department of Economic Development Director, Greg Steinhoff, sent a letter advising legislative approval to protect the members of the MOHELA board from potential lawsuits.

Commenting on the governor's decision to heed Steinhoff's advice, Paul Sloca, spokesperson for the Missouri Republican Party, said: "Of all the flags that have been raised I would say this would be sound advice at this point," said Sloca.

No one was available to comment in the governor's office Monday.

"Clearly Governor Blunt has now acknowledged what he has been denying for months that this was an illegal plan to raid the state's student loan authority and to build buildings with it," said Jack Cardetti, spokesperson for the Missouri Democratic Party. "You can not do that without the legislature." 

Under the governor's plan $335 million worth of assets would fund capital projects on public universities and colleges statewide. The remaining $15 million would go to the Missouri Technology Corporation to help commercialize new technologies in Missouri.

 The liquidated assets would need to go through the Missouri Development Finance Board and then distributed to schools over the course of six years. The finance board approved the agreement on Sept. 19 after putting a prohibition on universities using buildings financed by the funds for some forms of stem cell research.  

House Democratic leader, Jeff Harris, called the new change in plans "frustrating." "Here we go again with this going off on yet another path, another direction,"  said Harris, -D-Columbia. "I just wish we'd settle on one, look the voters in the state in the eye, lay out the plan and get the deal done." 

The governor proposed the sale earlier this year, but it died in the legislature. Among the complications was an insistence by the House, pushed by Bearden, for expanded state support for college scholarships.

The MOHELA board was scheduled to vote on the proposal on Sept. 8 but postponed after learning board members could potentially be sued for conflicts of interests. Two weeks ago the attorney general cited four of the seven members might have conflicts of interests.

Last week board member and Higher Education Interim Commissioner, Charles McClain, stepped down citing  health reasons. Two more member's resignation followed. 

Blunt replaced the two latter resignations so the vote could take place this week.

Several weeks ago State Auditor Claire McCaskill attacked the administration's plan for circumventing legislative review. McCaskill said it was important for the legislative process to be able to evaluate and prioritize higher education building construction needs.

"I believe there will be a vote before we return in January," Bearden said.