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UPDATE: UM System unlikely to see stimulus as House reworks 2010 budget plan

House leaders have proposed using stimulus funds for $1 billion tax cut over next 2 years
Friday, April 24, 2009 | 5:32 p.m. CDT; updated 2:57 p.m. CDT, Saturday, April 25, 2009

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COLUMBIA — The University of Missouri System is not likely to see much of the more than $1 billion in federal stimulus aid requested from the state legislature.

The Missouri House of Representatives on Friday released House Bill 22 that reworks its plan for the 2010 budget and the distribution of federal stimulus funds.

Of the UM requests, $31 million in funding for a new Ellis Fischel Cancer Center and $13 million for renovations to Mid-Missouri Mental Health Center are the only projects included in the new proposal.

The House had included several other UM requests, including $20 million to begin construction of a new building for the State Historical Society of Missouri. But those requests do not appear in the version of the bill released Friday.

House leaders, led by Speaker of the House Ron Richard, R-Joplin, have proposed using the stimulus funds for a $1 billion tax cut to Missourians over the next two years that would reduce the income tax from 6 percent to 5.5 percent. Richard stressed that details are still being prepared but said he hopes the new bill will be ready for debate by next week

More than $341 million of UM requests would have been for MU, its extension programs and other facilities located in Columbia, such as those under MU Health Care.

Linda Luebbering, the Missouri state budget director, said Thursday that budget proposals from both Gov. Jay Nixon and the state Senate call for spending the stimulus money mainly on stabilizing existing state programs. At this time, neither would provide funds for higher education construction projects. However, the Senate has not yet finalized all of the budget bills.

“We don’t generally comment or give reaction to bills that have not yet been finalized,” said Jennifer Hollingshead, assistant director of strategic communications with the UM System, on Friday afternoon. “But as we saw this week, things can change quickly in the House.”

The most expensive stimulus request for MU was $173 million for construction of a 250,000-square-foot patient tower for University Hospital. Other proposals included:

  • $87.9 million for “life safety compliance and security improvements” such as fire alarms, sprinklers, exit lighting, automatic locks and the replacement of 532 fume hood systems in 31 different buildings;
  • $62 million to purchase a new biomass boiler for the MU Power Plant;
  • $54.6 million to build a 150,000-square-foot home for the State Historical Society, which the university oversees; and
  • $31.2 million for planning, design and construction of a new Ellis Fischel Cancer Center.

Nikki Krawitz, vice president of finance and administration for the UM System, said the university made the stimulus requests because of the limited amount of money state government invests in higher education capital improvements such as construction projects and equipment replacement.

“The university has gotten very little consistently from the state,” Krawitz said. “We have gotten little chunks here and there, but Missouri does not have regular capital funding for its universities. This has caused serious problems over the years that have had a critical impact on our research and academic facilities."

According to data provided by the UM System and based on state expenditure data and census reports, Missouri is 45th in per capita spending on higher education capital projects. Kansas is 13th, spending an average of $70 a year per person while in comparison, Missouri spends 18 cents per capita for higher education projects such as renovations and software upgrades.

The current session of the Missouri General Assembly ends May 15. The 2010 budget, which will appropriate funds from the American Recovery and Reinvestment Act of 2009, must  be approved by May 8.

Both the House and Senate must agree to a compromise version of the budget before it can be sent to Nixon.

The state can choose to not appropriate all of the federal funds in this budget, saving some for the 2011 budget. In that case, any proposals not approved could be reconsidered at that time, Luebbering said.

Krawitz last week said UM representatives were lobbying members of the General Assembly on behalf of the stimulus requests. “We'll have our answers when the budget is released,” Krawitz said. “We want to make sure we are in there when decisions are being made.”

Krawitz said the first priority of the General Assembly should be funding Lewis and Clark Discovery projects that includes a new Ellis Fischel Cancer Center because the state had previously promised to fund the projects but was unable to meet those obligations.

“A commitment by the state was made, and it needs to fulfill that commitment before it allocates other funds,” Krawitz said.

The administration of former Gov. Matt Blunt sold assets held by the Missouri Higher Education Loan Authority in order to fund the Lewis and Clark Discovery projects but could not provide $51 million in promised funding when MOHELA came up with insufficient funds.

The UM System, however, might not have to depend on the federal stimulus package as its only option for many of the projects it was seeking stimulus funding to finance. The House recently passed a $700 million bond issue that would pay for as-of-yet unspecified construction projects in higher education, with the Ellis Fischel Cancer Center specifically in mind. That proposal, however, still has to pass the Senate and would require a constitutional amendment that Missouri voters would have to pass.

The bond would mature in 25 years and would have to be paid back, whereas stimulus money would not. Bonds could also possibly pay for the $62 million biomass boiler, but UM would prefer to use stimulus money.

Krawitz said the distribution of funds to projects can become even more complicated when funding is offered for projects or expenditures that are already funded. In that case, stimulus funds would be used for the already funded project, and that project’s funding would be sent elsewhere. Missouri has a Web site for tracing all stimulus spending at transform.mo.gov

All stimulus money from the American Recovery and Reinvestment Act of 2009 falls into one of three categories: budget stabilization funds, existing federal program funds and competitive grant funds. All of the funding for UM System requests would come from budget stabilization funds.


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