$700M bond issue 'in trouble'
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$700M bond issue 'in trouble'

Date: May 5, 2009
By: Michael Bushnell
State Capitol Bureau


JEFFERSON CITY - It was a bad day for a proposed constitutional amendment which, if ratified by Missouri's voters, would authorize the issuance of up to $700 million in bonds for construction of buildings at public universities. Two Republican senators filibustered the resolution until it was placed on the Senate's informal calendar. The measure's sponsor in the House said it is in danger of not passing.

The amendment would have guaranteed at least $81 million for capital improvements at MU, along with $91 million for Missouri State University. The bill would fund $590 million in "top priority" building construction throughout the state and just less than $110 million on projects halted when Gov. Jay Nixon stopped the initiatives that were to be funded through the sale of Missouri Higher Education Loan Authority assets.

MoHELA sold $350 million in assets two years ago in an initiative sponsored by former Republican Gov. Matt Blunt. Nixon said in January that the fund had insufficient revenue to complete the projects it was supposed to support, including $51.2 million worth for MU.

The bond initiative's funds would finish construction on Ellis Fischel Cancer Center and renovate Laferre Hall on red campus, both of which were initially supposed to be funded by the MoHELA sale.

Rep. Chris Kelly, D-Columbia, said the initiative he sponsored would pass if not for the filibuster by two southeast Missouri Republicans.

Kelly said he believed he had support from up to 25 of the 34 state senators.

"There are a lot of sensible Republicans, but two of them are clearly trying to beat the bill. Now it's in trouble; there's no question about that."

The main roadblock came from Sen. Chuck Purgason, R-Caulfield, who spoke against the bill for nearly half an hour before introducing an amendment which would increase the total from $700 million to $2 billion. It was a move Purgason said was designed to hurt Kelly's proposal. He said Missouri started this year with an $800 million deficit, and state government shouldn't be growing at a time when its revenue is declining.

"We've continued to experience negative growth," he said. "Right now continuing to spend money and take on debt is not how we are going to get out of this downturn."

Purgason, along with Sen. Jason Crowell, R-Cape Girardeau, talked back and forth for at least fifteen minutes and appeared ready to go on far longer than that. After spending about 90 minutes total debating the bill, its Senate sponsor, Kurt Schaefer, R-Columbia, asked for the bill to be tabled indefinitely.

"We have a lot to do, and if Sen. Crowell and Sen. Purgason weren't going to stop then there was no point in dragging this on right now," Schaefer said. "I think if you're opposed to a bill, just let it come to a vote and vote against it."

Kelly said Purgason's claim that the amendment would increase the state's budget shortfall was false, since the bonds are going to be sold over a 25-year period. He added that he feels Missouri voters should have the final say on how this money is spent.

"This doesn't hurt the budget gap and Sens. Crowell and Purgason know that," Kelly said. "I have trouble understanding their lack of faith in the voters."

Purgason said this was another growth of government, which he vehemently opposes.

"We're talking about the federal management of money and growing the government with this bill," he said. "We have started out so far in the financial hole, and it's amazing we have forgotten that."

Schaefer said government spending on private companies is a way to stimulate the economy. He also stressed that the amendment's funds would go strictly to building construction and not social welfare programs.

"We have got to get Missourians working, and this will get them working," he said. "It's strictly for building buildings and putting substantial money into the private sector."

If approved, the amendment would either go on the ballot in the November 2010 general election, or Gov. Jay Nixon could call for a special election. Kelly said he would prefer a special election, but Schaefer said the state could lock in current interest rates even if the amendment isn't voted on statewide until nearly 18 months from now.

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