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Missouri to use long-term debt for mental hospital

Tuesday, May 6, 2014 | 6:16 p.m. CDT; updated 7:26 p.m. CDT, Tuesday, May 6, 2014

JEFFERSON CITY — Renewed concerns about sluggish state revenues led lawmakers to agree Tuesday to use long-term debt to build a new high-security building at the site of the oldest public mental health facility in the western half of the U.S.

The funding plan for the Fulton State Hospital was one of more than 200 spending items settled Tuesday as House and Senate conferees announced their final version of the 2015 state operating budget.

The $26.4 billion budget plan boosts funding for public schools and universities, restores dental coverage to Medicaid recipients who lost it a decade ago and provides salary and technology improvements to state workers handling cases of alleged child abuse and neglect.

The House and Senate each must give final approval to the budget before Friday's constitutional deadline. The spending plan then would go to Gov. Jay Nixon before taking effect July 1.

Lawmakers based their budget on an assumption that Missouri would end its current fiscal year with 2 percent growth and experience an additional 4.2 percent growth next year. But state revenues declined in April and for the first 10 months of the 2014 fiscal year are up just 0.5 percent over the same period a year ago.

Legislative budget writers didn't pare back much spending because of the new revenue concerns. But Senate Appropriations Committee Chairman Kurt Schaefer cited the revenue uncertainty as a reason lawmakers opted for a 25-year bonding proposed by Nixon instead of a five-year repayment plan backed by House Budget Committee Chairman Rick Stream.

The building project at the Fulton State Hospital is estimated to cost $211 million. The longer-term bonds will require a roughly $14 million payment in next year's budget instead of a $44 million payment.

"We are being very cautious, watching revenues right now," said Schaefer, R-Columbia. "The primary goal here is to get Fulton built."

Stream, R-Kirkwood, said his plan would have saved about $150 million of interest payments. But he acknowledged that the state's revenues were a consideration.

Among other things, the Fulton State Hospital houses patients with serious mental illnesses who are sent there by courts in connection with crimes. It opened in 1851 and has been expanded repeatedly since then.

Also under the budget plan announced Tuesday, public school districts would get a $115 million increase on top of their current $3.1 billion in basic state aid. But if revenues meet Nixon's more optimistic projections, schools could get up to a $278 million increase. Either figure is far shy of the $556 million increase that would be needed to fully fund schools under a 2005 state law.

Missouri's public higher education institutions would get a $43 million increase — averaging 5 percent — to be distributed based on whether they have met performance goals. The budget also provides funding increases for Missouri's main financial-needs based scholarship program and expands a separate merit-based scholarship into a forgivable loan program for graduates who remain in Missouri to work.

The 2015 budget would restore general dental coverage that was eliminated for most adult Medicaid enrollees as part of a sweeping reduction to the program in 2005. The restored benefits would cost $17.8 million in state funds and $30.4 million in federal funds.

In addition to a 1 percent pay raise for state employees, legislators agreed to provide $2.3 million for merit-based pay raises for employees working with foster children, plus additional money to equip the staff with iPads and wireless Internet access in local offices.


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