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Senate approves House plan to spend MOHELA proceeds

May 02, 2006
By: Leslie Yingling and Meghan Maskery
State Capital Bureau

JEFFERSON CITY - Legislation that outlines how the state should spend the proceeds from a sale of college loans moved a step forward early Tuesday morning.

The debate that started Monday afternoon and lasted well past midnight ended with the Senate passing a House bill that appropriates proceeds expected from a sale of loans by the Missouri Higher Education Loan Authority.

Under the bill, these proceeds would go to fund debt reduction, college building projects, health care centers, scholarships and enticements to motivate companies to move closer to campuses.

More than a dozen amendments to the bill were offered by legislators looking to, among other proposals, shuffle funds to various building projects, establish a tuition reduction program, provide tax refunds to Missourians and eliminate language in the bill that prohibits embryonic stem cell research in buildings constructed with the proceeds.

All of those proposals were rejected. However, one of the amendments, a proposal to divvy up funding for the building construction projects based on the amount of students attending each school, failed by just two votes.

Gov. Matt Blunt first proposed how to spend proceeds of a MOHELA sale in January. He said Tuesday outside the Senate chamber that he was not troubled by the changes made by both the House and the Senate to his initial plan.

For instance, Blunt originally called for more funding for scholarships and endowments for professors. He did not include paying debt or funding health care centers in that initial plan.

"It's not inherently bad to pay down debt," Blunt said. He said he did not think the state's loan authority would reject using the funds for non-higher education related initiatives despite the loan authority's stipulation that the proceeds only be used on higher education.

"We have a great relationship with the MOHELA board," Blunt said. He added that the board is "supportive of the best interests of Missourians."

Blunt who visited the area outside the Senate chamber during the debate also disputed a contention that new buildings will end up costing the state more money in staffing and maintenance.

"Many of the projects, for example, are rehabilitation of existing space. Generally when you rehabilitate existing space, you reduce costs." He provided utilitity costs as an example of how the state could save.

Sen. Matt Bartle, R-Jackson County, suggested that spending the $432 million in one fell swoop could be fiscally reckless, citing a "grey foreboding" and "gut worry" he has about Missouri's fiscal prospects.

"Is there any merit in setting some of this money aside to avoid the train wreck we think might happen?" Bartle asked fellow senators.

Under the bill, more than $300 million would be spent for new university buildings. Less than $20 million would go to community colleges in the state, and $50 million would go toward debt prevention and reduction.

"The bill is chock full of great ideas, all kinds of investments in the future," Bartle said. "I don't have any problem with selling the assets, I just want to be sure we're fiscally prudent."

Bartle expressed concern over state expenses like Medicaid, and informally proposed reserving half of the funds from the MOHELA sale for use toward a future budget crunch. But Majority Floor Leader Charlie Shields, R-St. Joseph, said he didn't think the MOHELA board would vote to sell its assets for that cause.

"You would never, never get the money," Shields said. Cutting the MOHELA dollars proposed for universities' capital gains wouldn't leave enough money for the new buildings, he said.

In other debate, Sen. Victor Callahan, D-Independence, challenged universities' needs for "shiny new buildings politicians can have their names on." The state should focus on using student loan money to ensure middle-class families accessibility to higher education.