May 19, 2014

State Issues

University slated for 5.2 percent increase

This year, the University of Missouri System sought an increase to its core operating budget as a top priority for the legislative session. The FY 2015 budget bills, passed on May 8 and awaiting the Governor’s signature, include an overall 5 percent increase in a pool to be awarded based on how institutions met performance measures.

Because the University of Missouri System has met all of its performance measures for the year, it stands to receive an increase of $21 million in its operating budget, or a 5.2 percent increase.  This represents the first time since Fiscal Year 2001 that the University received an operating appropriation increase above 5 percent.  Overall this year, lawmakers approved more than $603 million for UM including operating funding and capital support through bonding, general revenue and surplus revenue funds. This exceeds the recent high water mark from Fiscal Year 2001, when lawmakers approved more than $500 million in operating and capital support. For a full overview of University-related budget items passed by the General Assembly this year, go here.

Governor Nixon must sign the bills before the current fiscal year ends on June 30.  He retains line-item veto authority on budget bills and could elect to veto or withhold funding of certain items should state revenues come in below previously agreed-upon estimates. As of the end of April, revenues have only grown by one-half of a percent, which is below the Governor’s 2.8 percent estimate for the current fiscal year.

Bonding bill passes

A top priority for the 2014 legislative session was funding to support 50/50 capital match projects on the four campuses.  In the final weeks of the session, lawmakers approved bills that could result in more than $161 million in crucial capital improvements for the matching projects and other maintenance and repair needs across the campuses.

On the last day of the legislative session, the House of Representatives passed SB 723, the revenue bonding bill, and sent it to the Governor. The bill, sponsored by Senator Mike Parson (R-Bolivar), increases the cap on the amount of revenue bonds that may be issued to fund maintenance and repair projects on public university campuses, among other state buildings. The cap for higher education bonding is increased by $200 million to a total of $370 million.  Sponsors of the bill plan to create a project list before the legislature returns next January. An early project list was contained in SCR 39, which did not pass. In that resolution, the University of Missouri’s four campuses were slated to receive up to $71 million for deferred maintenance projects.

The increase in the cap also makes additional bonding possible for more than $90 million in UM-related projects that were included in HB 2021, the capital improvement bill, which was passed the week before session ended. In addition to funding 50/50 capital match projects on each UM campus, the bill authorizes $38.5 million in bonds for MU’s Lafferre Hall, $19 million for the UMKC School of Medicine, $25 million for a new State Historical Society building, and $8 million for a business incubator in St. Louis.

The passage of both bills represents the first time the General Assembly has passed significant capital appropriations for the University of Missouri since FY 2001, when the System received a total of $74.3 million. The bills now await the Governor’s approval.

Scholarships get attention, support in 2014 session

Lawmakers increased funding for several key scholarships this year, and authorized a new loan forgiveness program aimed at agriculture students.  The Access Missouri need-based scholarship program received an $11.5 million increase over current year funding, which will bring total funding to $68.7 million. More than 10,000 UM students receive these awards. Missouri law authorizes awards of up to $2,850 for Access scholarships, but award amounts have been less than the full amount based on appropriations and the number of students qualifying.

The Bright Flight merit-based scholarship program received a $7 million increase over current year funding, bringing its total to $22.7 million. More than 3,000 UM students receive these awards, which should be fully funded next year at the statutory $3,000 level for students in the top three percent of standardized test takers and $1,000 for students in the fourth or fifth percentile.  A proposed new “boost” program that would have given Bright Flight students an extra $5,000 or more in the form of a forgivable loan if they stayed in the state upon graduation was not approved by lawmakers.

Students who are majoring in an agriculture-related field and work in agriculture or dairy operations during the summers can qualify for an annual $5,000 forgivable loan under a plan approved as part of an omnibus agriculture bill in the session’s final days.  If students leave the state after graduation they would have to repay the loan.  The scholarship was part of a larger dairy package (HB 1326) that was sponsored by Representative Casey Guernsey (R-Bethany). Also contained in HB 1326 was the removal of a sunset clause on The Large Animal Veterinary Student Loan Program, from which a number of MU Veterinary students benefit.

Higher education omnibus bill includes resource allocation model

After several years of work, a resource allocation model for public higher education institutions has now been approved by lawmakers. The model, which suggests future funding based in part on performance and institutional mission, was incorporated into SB 492, an omnibus higher education bill sponsored by Senator David Pearce (R-Warrensburg).

The Council on Public Higher Education (COPHE), which represents the public four-year institutions, developed a recommended funding allocation model several years ago that served as a basis for the legislation.  Part of new funding in the future will be based on meeting performance measures. Lawmakers also added language requesting that institutions track whether graduates receive jobs related to their degree level.

The omnibus bill also establishes the Missouri Advisory Board for Educator Preparation to advise the State Board of Education and the Coordinating Board for Higher Education on the quality of teacher education programs.

Taxes, education, transportation highlight session

Legislators began the session focused on a scaled down version of the tax cut legislation vetoed by the Governor in 2013. Several tax proposals were introduced and debated, and in the end lawmakers approved a bill that reduced individual and business taxes phased in over several years with a trigger to ensure revenue growth before additional reductions begin. The Governor vetoed the bill in April, but lawmakers mustered the required two-thirds majority to override the veto in both chambers, making the bill law.

The possibility of Medicaid expansion in Missouri also gained a lot of early session headlines, but the various proposals went without significant progress in the Senate, despite backing by the Missouri Chamber of Commerce and many other business and health care groups and organizations.

Legislators also placed a referendum on the ballot to increase state sales and use taxes by three-quarters of one percent to pay for transportation and road improvements. Missourians will consider the proposal on the November 2014 ballot.  Voters may also face two different questions on the ballot related to early voting.

Solutions for the troubled St. Louis and Kansas City public schools also dominated the session, with debate over how to handle students in St. Louis who live in unaccredited school districts being the center of the discussions. In the end, lawmakers approved a bill related to the transfer of students to surrounding districts that also would allow public funds to be used to pay for transfers to private schools. It is anticipated that provision may lead to a veto by the Governor, or a possible special session.

Legislators also passed legislation to create a study of Missouri’s Common Core approach to elementary and secondary education, and enacted a bill requiring a 72-hour waiting period for an abortion.  Legislation related to campaign finance, ethics reform, and tax credit reform was introduced and debated, but not passed.

Federal Relations

House, Senate begin FY 2015 appropriations markup process in Committees

With the federal fiscal year beginning October 1, the House and Senate appropriations committees have begun hearing and marking up their FY15 bills. The House Appropriations Committee approved the Commerce-Justice-Science spending bill, HR 4660, on May 7. The House version would increase funding for the National Science Foundation by 3.2 percent overall. The bill includes controversial language in the committee report related to the Social, Behavioral, and Economics (SBE) Directorate that “NSF must ensure awards are consistent with NSF’s scientific quality standards and aligned to national interests.” The report also notes that the committee recognizes the “intrinsic value” in SBE research. The appropriations bill is likely to be considered on the House floor late this week or next week.

Department of Defense releases final MOU on military tuition assistance

On May 15, the U.S. Department of Defense published the final memorandum of understanding for its tuition assistance programs for active service members, veterans, their spouses, and other family members. The MOU requires all universities that participate in tuition assistance programs to provide “meaningful” information to students about the financial costs of attendance, to agree to avoid using certain recruiting practices, and to provide academic and student support to the veterans and their families.

Senate Subcommittee on Transportation marks up highway reauthorization bill

The Senate Subcommittee on Transportation and Infrastructure marked up and passed S. 2322, the MAP-21 Reauthorization Act, which reauthorizes the highway transportation bill. The original bill recommended that funding for transportation research, including University Transportation Centers, be moved from the Highway Trust Fund and listed as “subject to appropriation.”  The university community expressed concern about this change and the Subcommittee moved the funding back to its current funding stream from the Highway Trust Fund. The current MAP-21 authorization ends on September 30.

Missouri S&T is a Tier 1 awarded University Transportation Center and MU and UMSL are sub-grantees for Iowa State University’s Regional Center award.

Senate Subcommittee to hold roundtables to discuss sexual assault on college campuses

The Senate Subcommittee on Financial and Contracting Oversight, chaired by Senator Claire McCaskill (D-MO), will hold three hearings related to sexual assault on college campuses. The first roundtable, scheduled for May 19, is related to the reporting process for crimes on a college campus through the Clery Act and the campus SaVE Act. The second hearing on June 2 will focus on Title IX and nondiscrimination. UM System Assistant Vice President for Academic Affairs Deborah Noble-Triplett was invited to and will participate in the June 2 roundtable. A final roundtable in mid-June will address administrative processes and criminal justice system.

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