MO Senators work late; approve MOHELA spending plan
Jefferson City, MO – Missouri state Senators worked into the early hours this morning (Tuesday) before approving on their own plan on how to spend proceeds from a sale of student loans.
The Missouri Higher Education Loan Authority (MOHELA) might sell some of its loans to raise cash for the state; there have been a number of ideas thrown around on how to spend the money.
The Senate's $472 million plan favors construction at college campuses and health clinics, with some money also going to pay down debt and pay for business enticements.
The House passed its own version and the differences have to be worked out this week. The state constitution requires budget bills be passed by Friday.
The Senate's plan, like numerous variations before it, also assumes the quasi-governmental Missouri Higher Education Loan Authority will go forward with a still uncertain proposal to sell billions of dollars worth of student loans and give some of the profits to the state.
Senators voted 22-10 for the spending bill after a debate that began Monday afternoon and stretched until about 12:40 a.m. Tuesday.
Republican Gov. Matt Blunt had proposed the MOHELA sale in January as a way to generate cash for university construction and create endowments for scholarships, professors and business enticements. The MOHELA board endorsed a revised plan to sell some of its assets but has not yet approved a loan sale because it continues to study the financial feasibility and potential effects.
In a letter dated Friday and publicly released Monday, MOHELA's interim executive director Raymond Bayer Jr. said a legal analysis has concluded that Missouri law does not clearly allow MOHELA to transfer its proceeds to the state.
Bayer urged Blunt and lawmakers to enact a measure specifically allowing such action before the session ends May 12. That would have to be done in a bill separate from the spending legislation.
Blunt expressed confidence that both the MOHELA loan sale and the legislative spending plan would succeed. He stationed himself Monday in the Senate side gallery, personally encouraging individual senators to support the legislation.
"Throughout this process there have been a lot of naysayers," Blunt told reporters. "But the bottom line is this is an innovative way to raise money to assist our colleges and universities to complete college improvement projects that would not be completed otherwise."
But Sen. Tim Green (D-St. Louis) said lawmakers were fighting over money that is not certain. By budgeting more projects than the money can fund in one year, lawmakers would leave it to the executive branch to decide which ones actually get a share of the initial money. "This is nothing but a piece of legislation with Monopoly money this is make-believe money," Green said.
The board's tentative plan calls for MOHELA to provide $210 million to the state by Sept. 30 as a result of an initial loan sale. An additional $240 million would flow to the state in quarterly installments of $15 million each running through Sept. 30, 2010.
Rather than considering how to spend only that portion of the money available in the next fiscal year, legislators are debating how to use all the potential money, plus the interest it would generate.
The Senate bill would spend $327 million for construction at universities and community colleges; $50 million for debt retirement; $15 million for business enticement; and about $80 million for health care needs, the largest portion of which would go to community health care clinics whose clients include the poor and uninsured. A version passed last week by the House included slightly more money for campus construction projects and debt retirement but nothing for health care centers. The House plan, like Blunt's original idea, also included money for general student scholarships.
The Republican-led Senate voted 23-8 along largely partisan lines to defeat an amendment by Sen. Pat Dougherty (D-St. Louis) that would have deleted money for debt repayment and instead used it for scholarships.
Senators also voted 23-10 against an amendment by Sen. Luann Ridgeway (R-Smithville) that would have deleted most of the spending on construction and debt repayment and instead distributed nearly $356 million among all of Missouri's individual income taxpayers.
And Sen. Chuck Purgason (R-Caulfield) narrowly failed in an attempt to distribute the portion of money allotted to universities on a per-student basis instead of on a project-specific basis. That amendment failed 17-15.