MOHELA deadline looms as debate continues

Wednesday, May 3, 2006 | 12:00 a.m. CDT; updated 3:10 p.m. CDT, Wednesday, July 16, 2008

JEFFERSON CITY — Several plans for how the state should spend proceeds expected from a college loan sale have been debated by legislators since the state’s loan agency first proposed on Jan. 31 to sell half its assets.

Although obstacles remain, a final plan for spending money from selling the Missouri Higher Education Loan Authority assets is a step closer to completion, only days before the 6 p.m. Friday legislative deadline for passing the budget.

Late Monday night, the Senate passed a bill that started in the House that puts $472.3 million toward college building projects, health care centers, scholarships, an endowment to entice businesses to move closer to campuses and repayment of state debt.

Now, the changes the Senate made to the original House proposal are expected to head to a House-Senate conference committee to work out a final version. The state constitution sets 6 p.m. Friday as the deadline for appropriations bills — one week before the automatic adjournment of the entire legislative session.

The bill passed Tuesday is a mixture of plans proposed by the governor, House and Senate. Under the bill, MU would get about $85 million for a health sciences research center, $2 million for a life sciences incubator, $3 million for a plant science research center and almost $1 million for a family health center.

Both Gov. Matt Blunt’s initial plan and the original House bill would have given MU $2.5 million more than the Senate bill offers for the health sciences center.

Only the Senate bill included money to build health care centers throughout the state. The House and governor’s proposals included more money for scholarships. For instance, while Blunt would have provided $100 million for scholarships, the Senate approved $2.4 million in scholarships for students planning to work in health care.

During Monday night’s debate, the Senate rejected, 23-8, an amendment to shift that debt-reduction money to college scholarship programs.

The original House bill also called for $75 million to go toward debt repayment, while the Senate approved only $50 million for this purpose. Blunt did not plan to use any of the money to pay down debt.

Blunt met with reporters outside the Senate floor Monday as legislators debated the bill. He said he isn’t concerned about the changes made by the House and Senate to his initial spending plan.

“It’s not inherently bad to pay down debt,” Blunt said. He also said he didn’t think the loan authority would reject using the funds for non-higher education related initiatives despite MOHELA’s stipulation that the proceeds only go toward those purposes. Blunt said the board is “supportive of the best interests of Missouri.”

Meanwhile, a letter addressed to Blunt on Friday by MOHELA’s interim director explicitly stated that state law does not allow MOHELA to transfer funds to the state.

MOHELA Interim Director Raymond Bayer Jr. wrote in the letter, “MOHELA has been advised by experienced Missouri law firms that state law does not, as clearly as necessary for a transaction of this magnitude, authorize the transfer and use of funds contained in the plan.”

Bayer also expresed in the letter that MOHELA members want to work with the governor and the legislature to draft legislation to change the state law. Otherwise, Bayer warns in the letter, the fund transfer could be challenged in a lawsuit.

One of the letter’s recipients, Sen. Gary Nodler, R-Joplin, said legislators are planning to add language to the statute to protect the plan from a legal challenge.

Jessica Robinson, a spokeswoman for Blunt’s office, said, “We disagree that anything needs to change in the law.” But, she added, “The governor is open to clarifying the statute.”

Another obstacle to the passage of a spending plan for MOHELA proceeds is a bill sponsored by the Speaker Pro Tem of the House.

Rep. Carl Bearden, R-St. Charles, sponsored a bill to keep future state funding for higher education institutions at 2002 spending levels until state scholarship programs are fully funded. Bearden argues that his proposal and the MOHELA spending plan are linked and one cannot pass without the other.

By Tuesday afternoon, Bearden said the Senate and the House had not come to an agreement on his proposal and that the House will not vote on the spending plan until the two chambers reach an agreem

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