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Higher education leaders assess options after legislature fails to pass MOHELA spending bill

The University of Missouri and other public higher education institutions are assessing their options after the Missouri General Assembly failed to pass HB1022, the appropriations measure that would have divided more than $450 million in proceeds from a partial sale of the Missouri Higher Education Loan Authority (MOHELA) to support capital improvements at higher education institutions. Lawmakers faced a constitutional deadline of 6:00 p.m. Friday, May 5, to complete work on the bill, but the House held up a final vote on the measure pending outcome of a separate bill sponsored by Rep. Carl Bearden (R-St. Charles) that contained scholarships and a major policy shift on how the state funds higher education institutions.

The final version of the MOHELA plan included funding for high priority projects at all four University of Missouri campuses, and also provided support for several health care initiatives favored by the Senate and the early pay down of debt favored by the House. It won first-round approval by the House Friday afternoon, but the required final vote was postponed while House leaders waited to see what the Senate would do with HB1865, Bearden’s higher education bill.

Earlier on Friday, the House struggled to harness the needed 83 votes to pass Bearden’s bill, which set up “Access Missouri” scholarships of $1,000 for the freshman year at Missouri’s public and private colleges. While there was widespread support for the scholarship, several other sections of the bill related to how they would be funded generated controversy. The Senate sent a message to the House as the deadline loomed, indicating they refused to accept the House position and requesting that the lower chamber accept a “scholarships only” version of the bill. The stalemate carried out until the 6:00 p.m. adjournment, when both HB1022 and HB1865 died.

Bearden’s plan was opposed by all public higher education leaders in the state. The bill would channel significant additional resources into scholarships over the next five years, increasing competition for funds that would otherwise support operating appropriations for institutions. If lawmakers failed to meet the scholarship goals, then the state would reduce operating funds for public four-year institutions to make up the difference. There would have been additional penalties – up to 2 percent a year – on state appropriations to those institutions that raised tuition above inflation during the five-year period. The House refused to move ahead on the final MOHELA vote unless senators agreed to the Bearden plan.

In the end, higher education leaders, including University of Missouri President Elson S. Floyd and all four University of Missouri chancellors, agreed that the short-term gain of capital funds was not worth the long-term loss of state support for operations. 

In the final hours of Friday’s session, the Senate passed a resolution encouraging the governor to move ahead with the goals of the Lewis and Clark Initiative and expressing its support for the plan. Gov. Blunt is considering an option of the MOHELA board selling its partial assets and providing the funding directly to higher education institutions. 
Lawmakers conclude the legislative session at 6:00 p.m. Friday, May 12. UM Legislative Update will have another issue following the end of session.

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