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April 26, 2013

Senate gives first round approval to higher education funding formula bill

After several hours of debate and the addition of several amendments, the Senate gave first round approval to Senate Bill 437 [1] on April 24. The bill, which creates a funding formula for the state’s higher education institutions, will have to be brought up for a final vote before being sent to the House for consideration. It is the product of work by the Joint Committee on Education over the past 18 months, and the legislation is sponsored by Sen. David Pearce (R-Warrensburg).

The formula provides a framework for how lawmakers could appropriate funds to public two-year and four-year institutions in the future. Of concern to the University of Missouri System is that, as currently written, the formula would reduce UM’s share of overall future higher education funding from 49 percent to 36 percent, with a majority of the additional dollars going to the state’s community colleges. The bill also ties 10 percent of core funding to meeting performance goals and another 10 percent to the success of graduates finding jobs. The Council on Public Higher Education, representing all of the public four-year institutions across the state, including the University of Missouri System campuses, is opposing the legislation and encouraging lawmakers not to pass the bill in its current form.

House Budget Committee revises bonding proposal for higher education

The resolution authorizing bonding for capital projects, including projects on the state’s two- and four-year university campuses, was returned to the House Budget committee this week for further consideration. House Joint Resolution 14 [2], sponsored by Rep. Tim Jones (R-Eureka), would authorize up to $1.2 billion in bonds for a number of critical state capital projects. In the current version, the committee included $600 million for higher education projects, of which 20 percent must go to community colleges. Institutions would also be required to make a 15 percent match for the funds received. $100 million is included for capital needs at the State Capitol building and $40 million could be used for projects at state parks. Fulton State Hospital would be authorized to receive up to $200 million for the construction of a new facility. The committee also elected to include $20 million to create a revolving fund for elementary and secondary schools to receive low interest loans, which could be repaid over time through an offset of the schools’ foundation formula allocation.

The resolution also creates a State Building and Infrastructure Revolving Fund, consisting of the remaining balance of the bonds. The fund would cover all other projects, such as state buildings, ports, projects for rural water consortia, surface lake projects, urban economic development projects, and utilities infrastructure, among other uses. Rep. Caleb Rowden (R-Columbia) successfully offered an amendment to include the State Historical Society in the list of possible projects.

Also included in the resolution is the creation of a Taxpayer Protection Commission to oversee any funds appropriated from the fund, if voters approve the proposal. The committee approved the new substitute and the resolution awaits a hearing in the House Rules Committee.

House adopts new version of tax plan

On April 24, the House passed Senate Bill 26 [3], sponsored by Sen. Will Kraus (R-Lee’s Summit), after making several changes to the legislation. The bill, which overhauls the state’s tax system, was passed by the Senate earlier this month, and now it faces a final vote on the Senate floor to confirm the changes made by the House. If the Senate concurs with the version of the bill passed by the House, the bill could be adopted and sent to the Governor. If the Senate does not concur with the version of the bill passed by the House, a conference committee will be charged with the task of working out the differences between the two versions.

The House version of SB 26 increases sales taxes by 0.6 cents over the next five years. Of this amount, 0.2 cents are devoted to mental health facilities. The bill also lowers the personal income tax, several corporate taxes, and includes a tax amnesty proposal. House members also incorporated a trigger requiring that no tax cuts go into effect until state revenues grow by at least $100 million. The bill is a response to major tax reductions passed by Kansas last year, which many argue have made Missouri a comparatively less attractive place for businesses, especially in the Kansas City area.

Budget analysts predict the bill will result in a state revenue reduction of between $400 million and $500 million per year, with some outside groups placing the impact at a much higher rate. Education organizations have raised concerns about this reduction because K-12 and higher education are areas that potentially could be cut if the state brings in less general revenue. In the House, the bill was adopted by a vote of 90-68, which does not constitute a veto-proof majority.

Missouri S&T Chancellor Cheryl Schrader meets with House leadership

On April 16, constituents of Rep. Keith Frederick (R-Rolla) visited the Capitol to meet with Speaker of the House Tim Jones (R-Eureka) and discuss the needs of the Rolla community. Among them was Missouri S&T Chancellor Cheryl Schrader, who discussed a number of higher education priorities including the new funding formula and the importance of the bonding proposal.

Business and education leaders from the Rolla area, including Missouri S&T Chancellor Cheryl Schrader, meet with Rep. Keith Frederick (R-Rolla) and Speaker of the House Tim Jones (R-Eureka). [4]

Business and education leaders from the Rolla area, including Missouri S&T Chancellor Cheryl Schrader, meet with Rep. Keith Frederick (R-Rolla) and Speaker of the House Tim Jones (R-Eureka).

Congress begins Higher Education Act reauthorization process by seeking input

Republican and Democratic leaders of the US House Committee on Education and the Workforce released a letter [5] calling for feedback on reauthorization of the Higher Education Act (HEA). The committee is requesting that students, parents, college leaders, and higher education stakeholders share their views on policies expected to be included in the upcoming reauthorization.

The HEA, which is currently set to expire on January 1, 2014, both authorizes and limits federal spending on certain scholarships, grants, and student loans. It also sets policies such as requirements for exit counseling, campus safety disclosures, transfer credit policies, and many other provisions. Click here [6] to read the committee’s press release.

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