House committee to look at $950 million bond issue
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House committee to look at $950 million bond issue

Date: January 23, 2013
By: Marie French and Brendan Cullerton
State Capitol Bureau
Links: HJR 14, SJR 3

JEFFERSON CITY - Missouri House Speaker Tim Jones, R-St. Louis County, has tasked a panel to decide on the details of a $950 million bond issue that would provide funding for construction at college campuses, state buildings and parks, among other potential projects.

"We know we have big needs," Jones said. "This will be an immediate job creator. This will be an immediate spur to economic development across the state."

Jones announced the creation of the special committee during a press conference Wednesday and named a Columbia Democrat, Rep. Chris Kelly, to be the committee's chairman. Kelly's position as chair of the the newly created Infrastructure and Job Creation Appropriations Committee is notable since it will give the Democratic lawmaker a leadership position in an otherwise Republican-controlled chamber.

Kelly said his minority party status will not hinder his negotiations with Republicans. He said his bipartisan efforts helped him during his last session as an appropriations chair, and that helps mitigate the fact that the Republicans dominate the Missouri House. They hold 109 of the 163 seats.

"I'm not here about the political parties," Kelly said. "My check doesn't say Democratic. My check says state of Missouri."

Jones said Kelly's bipartisan nature was the reason he was appointed to head the special committee in charge of the bond issue.

"(He) has proven himself time and time again in this chamber to be someone who truly wants to work in a bipartisan fashion," Jones said.

Kelly has worked with a fellow Columbia legislator, Republican Sen. Kurt Schaefer, on a similar bond proposal, which Schaefer pre-filed in the Senate. That bill, which would be a constitutional amendment like previous bond issues, would provide funding for construction at college campuses, state buildings and parks.  

Jones indicated the bond issue could contain some funds for transportation infrastructure but did not give any specifics.

"(The committee) will be the ones that will dive into the weeds," Jones said. "The specifics will be ironed out by the committee and with the Senate."

Jones said low interest rates, low construction costs and the availability of revenue that had been going to pay off old bonds make this a good time to issue a new bond.

"Money is a commodity and right now money is at historically low interest rates," Jones said. "Millions of dollars that have been committed to old debt payments are now free."

The projects identified for funding include a building for the College of Engineering at the University of Missouri and a new facility for Fulton State Hospital. A portion of the funds would also go for community colleges. Kelly said these projects, unrelated to highways, would not be funded by any new taxes.

Sen. Ed Emery, R-Lamar, said the argument that bonds do not create new taxes is not convincing to him. He said he thinks the state government should exchange priorities to fund infrastructure like roads, which government should be doing.

"We're putting the entire state at risk, we're banking on the future of our children and grandchildren," Emery said. "We're putting additional tax burden on society."

The state just finished paying off the Third State Building Fund issued in 1982 for $600 million, which Jones estimated was about $1.4 billion in today's dollars. If this proposal passes, it will be the Fifth State Building Fund. The last bond issue by the state was in 1994 when voters approved $250 million to improve prisons and colleges.

This will be the fifth consecutive session Kelly has sponsored a bond proposal.

Emery voted against one of those bills in 2009 when he was still in the House. He said he still generally opposes issuing bonds, but that he wouldn't yet take an official stance and would listen to specifics.

"Bonding is exchanging today's problems for tomorrow," Emery said. "That's never absolutely good policy."

Jones also voted against Kelly's bond issue in 2009. He said he does not have a hard deadline for the committee or the bond proposal, which will have to be passed by both chambers and then approved by 57 percent of voters.

"Like any proposal of this magnitude, we're going to have to convince a lot of people," Jones said. "We have to make sure it's not too big of an animal that it sinks under its own weight."