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Missouri Digital News
MDN.ORG
Mo. Digital News
Missouri Digital News
MDN.ORG:
Mo. Digital News
MDN.ORG:
Missouri Digital News
MDN.ORG:
Missouri Digital News
MDN.ORG
Mo. Digital News
Missouri Digital News
MDN.ORG:
Mo. Digital News
MDN.ORG:
Missouri Digital News
JEFFERSON CITY - The House Budget committee dumped proposals to use the expected profits from a sale of student loans on initiatives unrelated to higher education before passing the bill that had initially put some of the money toward building a women's prison in Chillicothe.
Democrat representatives who voted against the bill questioned how the non-profit Missouri Higher Education Loan Authority will be able continue to provide borrower benefits to students after selling half its assets. The non-profit loan agency currently uses its profits to offer reduced interest rates and to forgive some loans.
Rep. Paul LeVota, a Democrat from Jackson County, said "We have the governor, we have the MOHELA board, we have the leadership of this House and we have the leadership of the Senate grabbing the cash, deciding to go ahead and take the cash as opposed to finding out how this is going to impact higher education."
He added, "Well I say this time in this committee, since we've heard no facts whatsoever on how this is going to affect MOHELA's mission, that we say no."
Supporters of the bill, including House Budget committee chairman Allen Icet who also sponsored the proposal, pointed out that the bill under consideration only appropriates the expected profits from the sale.
"This bill has nothing to do with what MOHELA decides," said Bob Behnen, R-Kirksville. The bill passed 19-6.
Icet, R-St. Louis County, said the Budget Committee has to decide how to distribute the funds before the details of the sale are worked out because it will be another year before the legislature can work on appropriations again.
The bill the House passed Tuesday is the most recent plan for distributing the $450 million in expected profits from the sale of student loans by the state's loan authority.
Ever since the MOHELA board of directors announced at a Jan. 31 board meeting that it would sell $2.4 billion in student loans to fund Gov. Matt Blunt's higher education initiatives, the House and the Senate have proposed their own spending proposals. Recently, members of the groups met to reach a compromise. Icet called his bill an attempt at a compromise although he said not everyone agrees with the proposals.
The three current proposals by the House, Senate and the governor include at least $300 million for building construction on college campuses. The Senate plan calls for $130 million for health care initiatives.
The House voted in March to use $75 million expected from the college loan sale to pay off state bond debt. On Tuesday, Icet argued that it makes fiscal sense to use the money build the prison, than to pay off the older debts that were accrued when interest rates were lower.
The Senate bill, like the original House bill, would use some of the profits to fund initiatives that do not directly benefit higher education despite MOHELA's stipulation that funds from a student loan sale go toward that purpose.
Icet later offered an amendment to mandate that the money go toward repaying debt related to higher education after hearing concerns from the committee.
Rep. Edward Wildberger, D-St. Joseph, said he foresees "legislators gone wild" as members of the General Assembly continue to work out how to appropriate the funds.
Icet responded with, "The only thing we're certain of is this bill will change."
The bill Clint Zweifel, D-St. Louis County, proposed last week to require MOHELA to hire an independent investigator to assess the financial and legal aspects of the sale was not voted on as planned Tuesday.
Zweifel limited his proposal to only include the current planned sale of MOHELA student loans after the Coordinating Board of Higher Education expressed concern that the proposal would mandate legislative approval for every sale of MOHELA assets.
The House Higher Education Committee should vote on Zweifel's revamped proposal sometime in the next week, according to committee chair Gayle Kingery, R-Poplar Bluff.