Government Relations

UM Legislative Update Newsletter

March 10, 2006

House committee approves bill to restructure higher education funding

HB1865, sponsored by Rep. Carl Bearden (R-St. Charles), was voted out of the House Special Committee on Student Achievement and Finance on Tuesday, March 7. The legislation launches a new “Access Missouri” freshman-only scholarship, and also caps state operating funds for colleges and universities at 2001 levels until the Access and several other scholarship programs are fully funded. The bill does encourage the state to return higher education to 2001 appropriation levels – the high water mark for state appropriations received by institutions – but then caps operating funds and diverts all additional dollars to the Bright Flight, Access, Missouri College Guarantee and Charles W. Gallagher need-based aid programs. The University of Missouri and Missouri State University testified for informational purposes on the legislation.

Bearden emphasized to the committee that the bill was designed to focus on students and said caps in operating funds would be partly offset by additional tuition dollars flowing through financial aid to institutions. He said he plans to seek proceeds from the MOHELA loan sale to fund the new Access scholarships, and noted that passage of this bill would be closely linked to passage of the MOHELA appropriations.

Higher education leaders expressed concern that the cap on operating funds would force public universities and colleges to increase tuition even higher than inflation in order to balance budgets that also rely on state support. Nikki Krawitz, UM Vice President for Finance and Administration, testified before the committee that at a growth rate of 2 percent per year, it would take until 2011 to return higher education institutions to the FY01 levels. Then it would take an additional four or five years to generate enough revenue to fund the scholarships, meaning higher education institutions could be operating at 2001 state funding levels through the year 2016.  

Steve Lehmkuhle, UM Senior Vice President for Academic Affairs, also testified before the committee. Lehmkuhle discussed several positive aspects of the proposal, including a commitment to reinvest in operating funds and financial aid for higher education; an emphasis on performance funding; and the formation of a joint House-Senate committee on higher education to provide planning and coordination of higher education issues before the General Assembly. He did question whether it made sense to launch a new scholarship program when several of the state’s current programs – including Gallagher and Missouri College Guarantee – only meet 25 percent of the identified need in the state.

The Associated Students of the University of Missouri (ASUM) also testified for informational purposes on the bill.    

Other institutions noted that the bill could lead to a shift in state funding from public four-year schools to community college and private institutions. The committee was encouraged to consider adjusting the 2001 level for inflation to better reflect the true value of that appropriation in today’s dollars. 

Once testimony concluded, Rep. Brian Baker (R-Belton), chairman of the committee, immediately went into executive session. The committee voted to pass the bill by a 5-3 vote. Those voting in support of the bill were Baker, Bearden, Rep. Scott Muschany (R-St. Louis), Rep. Tim Flook (R-Liberty) and Rep. Will Kraus (R-Raytown). Those opposing the bill included Rep. Joe Aull (D-Marshall), Rep. Jane Bogetto (D-Clayton) and Rep. Mike Corcoran (D-St. Ann). The bill must now be considered by the House Rules Committee before moving to the full chamber for debate, which could happen as early as next week.

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