May 9, 2014

State Issues

Due to the end of the legislative session next Friday, May 16, there will be no Legislative Update until Monday, May 19, in order to provide a comprehensive review of the 2014 legislative session.

Budget with 5% core increase sent to the Governor

The General Assembly passed the FY 2015 budget on May 8.  A conference committee convened on May 6 to reconcile the differences between the House and Senate versions, and made the following decisions on the outstanding items that remained in HB 2003, the higher education funding bill:

  • $43.3 million for performance funding, which was the Senate position. The amount is equivalent to a five percent core increase for all 2- and 4-year public institutions if they meet all five established performance measures. The University of Missouri System has met all five, so can expect to receive a $21 million increase in its core budget.
  • $1.4 million for UMSL equity funding, which was the House position. The funding represents the final installment of a multi-year effort by the legislature to equitably fund the UMSL campus.
  • A $7 million increase to the Bright Flight scholarship program, which was the House position. The committee included language in the bill to allow the funding to be used for a new loan forgiveness program, which is currently proposed in HB 1308. If the legislation does not pass this year, the bill provides that the increase will instead fully fund the existing program.
  • An $11.5 million overall increase to the Access Missouri scholarship program, which is a compromise between the House and Senate positions.
  • The $1 million proposed for innovation campuses was removed from the bill. This was the Senate position.
  • A $6 million equity increase for community colleges, which is a compromise between the House and Senate positions.
  • A $500,000 new line item for the UMKC Centers for Neighborhood Initiative, which was in the House committee version of the bill and was also in the Senate version.
  • A $3 million new line item for MOREnet for one-time investments to expand broadband capacity at elementary and secondary schools.
  • The $33 million proposed in the Senate version for a new State Historical Society building was not included in the final bill.

After figuring in the UMSL equity funding above, the University of Missouri System will receive a base operating appropriation of $409.1 million, plus the $21 million increase for performance.

A number of other UM-related items were already decided when the Senate took the House position on funding. Among those items are:

  • $10.3 million for Missouri Rehabilitation Center in Mt. Vernon.
  • $1.75 million for the Missouri Kidney Program.
  • $1.9 million for the Missouri Telehealth Network, where $1.5 million in new funds were added for the purpose of creating four Extension for Community Healthcare Outcomes (ECHO) programs focused on diabetes, health literacy, hepatitis, and pain management. Statutory authorization for this program is proposed in HB 2125 and HB 2154, with passage possible in the next week.
  • $1.5 million for the Spinal Cord Injury Fund.
  • $2.2 million for the State Historical Society.
  • $340,000 for the Missouri Federal and State Partnership program (MOFAST).
  • $2 million for the UMKC joint pharmacy program with Missouri State University.
  • $10 million for the MU School of Medicine cooperative medical student training program in Springfield.
  • $300,000 for a program at UMSL designed to increase international collaboration and economic opportunity with Israel.

The budget will now be sent to the Governor who must sign the bills by June 30.

audrey

Many University of Missouri System friends and supporters have been visiting Jefferson City to advocate for higher education priorities, including Audrey Erdman, right, who visited with State Rep. Chris Kelly (D-Columbia), left, about the importance of capital improvements for UMKC during House floor debate on the budget.  Audrey is the daughter of former UM Board of Curator Warren Erdman and was named an honorary page for the day while visiting on Thursday.  The UMKC Free Enterprise Center 50-50 project was passed as part of the budget.

Capital Improvement bill sent to the Governor

On May 8, the General Assembly passed HB 2021, which primarily funds capital improvements at higher education institutions across the state. Under the plan, $32.8 million is appropriated to the University of Missouri for 50/50 capital match projects on all four campuses. The University has already raised half of the funds for these projects through private donations. Four of these projects are funded with general revenue:

  • $7.4 million for the UMKC Free Enterprise Center;
  • $10 million for the UMSL College of Business Administration;
  • $1.2 million for the Missouri S&T Experimental Mine; and
  • $10 million for the MU College of Business Applied Learning Center.

Two other UM 50/50 projects are funded through the Higher Education Capital Fund, which will receive funds should state revenues come in above the projected revenue estimate in the upcoming fiscal year.  The MU Fine and Performing Arts facility is slated to receive $2.7 million and the MU teaching and research winery addition could receive $1.5 million. The bill also funds 50/50 projects at Missouri State, Northwest Missouri State, Southeast Missouri State, Harris-Stowe, Missouri Southern, and Lincoln universities, in addition to projects at some community colleges.

The bill also includes an authorization for $90.5 million in funding through revenue bonds for several UM projects:

  • $38.5 million for renovations and additions at Lafferre Hall on the MU campus;
  • $19 million for the UMKC School of Medicine;
  • $25 million for the construction of the State Historical Society building and museum; and
  • $8 million for a business incubator in St. Louis, affiliated with UMSL

The funding of the four bonded projects is still dependent on the passage of SB 723, which is the authorizing legislation raising the cap on the amount of revenue bonds that may be issued by the Board of Public Buildings. The bill is awaiting floor debate in the House.

The passage of HB 2021 marks the first significant capital appropriation for the University in over ten years. Should the Governor sign the bill and approve all projects, the University of Missouri System would receive $123.3 million in funding for capital projects on its campuses.

Lawmakers override Governor’s veto on tax cut legislation

In quick fashion, the Senate and House voted this week to override Governor Nixon’s veto of SB 509, the tax cut legislation lawmakers sent to him earlier in the session.  Senators mustered the required 23 votes the afternoon of May 5, and the House took up the motion and passed it the following morning by a vote of 109-46, representing the required two-thirds majority to override the Governor’s action.

In the House, all 108 Republicans and one Democrat – Representative Keith English (D-Florissant) – voted to override.  With that vote, the bill becomes law without the Governor’s signature.  The tax cuts included in the bill will not take effect until 2017, and will require revenue growth of at least $150 million in the previous year before the personal income tax cut and other changes in business income take effect.

According to the official fiscal note on the bill, the cuts will result in about $620 million less general revenue available to the state once fully implemented.  Supporters of the bill argue that increased economic activity and jobs will more than make up for the difference. Opponents are concerned that the reduction in dollars available will impact the state’s ability to adequately fund state services like K-12 and higher education.

Senate debates higher education funding model bill

On May 8, Senators adopted a bill that authorizes a funding model for higher education.  House Bill 1390, sponsored by Representative Mike Thomson (R-Maryville), clarifies how future funding will be allocated to higher education institutions.  No changes were made to the formula portion of the bill during Senate debate, but lawmakers did add several higher education amendments including one supported by the University that eliminates a sunset clause for the large animal veterinary medicine loan program.

Senator David Pearce (R-Warrensburg), who handled the bill on the Senate floor, also added an amendment to conduct a study of the various state financial aid programs to determine if improvements need to be made.  The bill now goes through a procedural committee before having a final vote on the floor. It would then need to be reconsidered by the House due to changes made in the upper chamber.

Legislative Profile: Joe Don McGaugh

mcgaugh

Representative Joe Don McGaugh (R-Carrollton) is in his first term in the House of Representatives representing Carroll, Ray and parts of Chariton counties.  An MU graduate who is frequently seen wearing his Mizzou lapel pin, McGaugh currently serves on the Election, Local Government, and Agriculture Policy committees His passion for politics stemmed from his mother’s success as the County Clerk in Carroll County. “I always wanted to move back home, so whenever I had the opportunity to run and make a difference there, that’s what motivated me,” McGaugh said.

During his first term, McGaugh’s priorities have included job growth, rural sustainability and agriculture. “I want to see Missouri grow and our jobs increase so we’ll be a good state to raise your family in,” McGaugh said.

A key to successful job growth in Missouri is higher education. McGaugh agrees that businesses thrive in areas where workers are educated. “We need make sure we are sending kids down the right path — whether it be a four year university or a trade school — where they can get an affordable quality education,” he said.

McGaugh had the pleasure of experiencing both the University of Missouri for his undergraduate degree and UMKC for law school. To him, it is impossible to compare the two experiences. During his undergraduate career he focused on campus involvement. He participated in Alpha Gamma Rho Fraternity, the Alumni Association Student Board, and the Homecoming Steering Committee. While attending law school at UMKC, McGaugh focused exclusively on his academic pursuits.

His experiences at both MU and UMKC contributed to a successful career in law and politics. Prior to his legislative duties, McGaugh opened McGaugh Law Offices and served as both the city counselor and city attorney for Carrollton.

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