The Missouri House passed a proposed ballot item on Thursday that would authorize bonds to construct a cavalcade of higher education construction projects.
The measure sponsored by Rep. Chris Kelly, D-Columbia, would fund the primary capital improvement priorities of the state’s colleges and universities. It would also fund all of the unfinished projects from the partial asset sale of the Missouri Higher Education Loan Authority, including the Ellis Fischel Cancer Hospital in Columbia.
If Kelly’s measure is approved by the voters, the legislature would come back and approve legislation with various capital improvement projects. As the projects made headway, the state would issue bonds to pay off the costs.
With interest costs low and another series of bonds being paid off in several years, Kelly has positioned the bond plan as a good way to help universities and provide a stimulus to construction contractors.
“With certain kinds of bonds, the federal government will pick up… 35 percent of the interest costs as part of the stimulus legislation,” Kelly said. “The market has never been better for [general obligation] bonds. They’re very desirable because they’re safe. People are looking for safe places for their money.”
While Kelly’s measure passed 131-28, some Republicans expressed trepidation before the proposal was sent to the Missouri Senate.
Rep. Mike Dethrow, R-Alton, said he was concerned about increasing the state’s debt load, especially during sour economic times.
“I don’t want our legislature to be looked upon like our Congress is looked on at this time as they borrowing money to [hurt] the future of our children and grandchildren,” Dethrow said. “I know we can’t borrow our way to prosperity or spend our way to prosperity.”
Kelly said if his proposal passes, the state would be borrowing for long-term capital improvements. The federal government, he said, is borrowing in order pay for ongoing activities of government.
He added that bonding is traditionally seen as the most prudent way to pursue capital improvement projects.
“To some extent, I think that is people who haven’t thought all the way through the reality that the state is always going to do big new construction with some kind of borrowing,” Kelly said. “If that is so, then the question about issuance become not if – but when. If the question is when, then when is never better than now.”
The Senate will still need to approve Kelly’s proposal before it goes to the voters. If that happens, voters will decide the issue either in November 2010 or if Gov. Jay Nixon calls a special election.