May 10, 2013

Appropriations bills pass

The General Assembly truly agreed to and finally passed the thirteen FY 2014 budget bills on May 9. Earlier in the week, the Appropriations conference committee met to resolve differences between the House and Senate versions of the bills. House Bill 3, the higher education funding bill, will allocate an operating appropriation of $395,220,620 to the University of Missouri System.

The committee agreed on a compromise position for performance funding, appropriating an additional $25 million. The new funds are contained in their own line item and will be distributed to public higher education institutions based on the number of performance measures that are met. The committee also agreed to retain the $10 million added by the Senate for a cooperative program between the MU School of Medicine and CoxHealth and Mercy health systems in Springfield. The bill also contains an additional $400,000 for the State Historical Society.

Other non-conference items benefiting the University of Missouri System include an additional $1 million for the large animal veterinary program at MU and an additional $250,000 for the Missouri Kidney Program.

The bills will be delivered to the Governor and must be signed by the end of the current fiscal year, which ends on June 30.  The Governor has line item veto authority on appropriations bills.

Bonding resolution moves to Senate

The Missouri House of Representatives third read and passed House Joint Resolution 14 on May 9. If approved by voters, the resolution would authorize bonds for the purpose of funding capital projects throughout the state, including projects on the campuses of the state’s higher education institutions. The resolution, sponsored by Speaker of the House Tim Jones (R-Eureka), passed by a vote of 136 to 23. The Senate first read the bill on the same day and could refer the bill to committee as early as May 13.

Senate gives final approval to higher education funding formula plan

On May 9, the Senate gave final approval to Senate Bill 437, which would create a funding formula for public higher education institutions. Sponsored by Sen. David Pearce (R-Warrensburg), the bill was approved by a 23-9 vote and will now move to the House, where no companion legislation has been considered.

The University of Missouri System and other public four-year institutions oppose the bill because the latest version represents a significant shift in future funding from four-year schools to two-year community colleges. The bill also fails to incorporate weightings for professional programs to the level requested by the University of Missouri System. Those concerns were the primary reasons for a filibuster of SB 437 on the Senate floor last week.

With just one week to go in the legislative session, it is unlikely that the bill will be in a position for floor consideration in the House before the end of session on May 17. It is anticipated that higher education institutions will continue discussions over the summer and fall with the Joint Committee on Education, which developed the formula.

House, Senate send compromise tax cut bill to the Governor

This week, the House and the Senate both passed House Bill 253, a bill that cuts taxes for individuals and corporations, and sent the bill to the Governor’s desk. Sponsored by Rep. TJ Berry (R-Kearney), HB 253 does not include the sales tax increase that was part of earlier tax measures debated this session. Instead, it establishes a graduated income tax reduction that is tied to a trigger, which is meant to prevent further tax cuts during years when state revenues do not grow by $100 million.

The bill’s fiscal note estimates that revenues will decrease by $700 million when fully phased in, although one organization, the Missouri Budget Project, places the reduction in future revenues at $800 million or more. Opponents argue that the details of the bill are poorly written and that the bill may result in much larger revenue reductions. They also say lost revenues would be better put to use by supporting elementary, secondary, and higher education and other state priorities.

The Senate spent several hours on the measure earlier in the week before passing it on May 8 by a 24-9 vote. The House passed the bill on May 9 by a 103-51 vote. The bill now goes to the Governor for consideration.

Extension proposals lined up for passage in final week

The proposal to allow MU Extension to form single- or multi-county Extension districts is positioned for final passage during the last week of the legislative session. The proposal is a priority of the University to help streamline delivery of Extension programming and provide a local funding option in counties that may need it.

The statutory language is included in House Bill 542, an omnibus agriculture bill, which just needs a final vote on the House floor before being sent to the Governor. The language is also in both Senate and House versions of Senate Bill 9, a second omnibus agriculture bill that is now in a House-Senate conference committee where differences are being reconciled. Because the Extension language is identical in both versions of SB 9, it is not a conference item and will be included in whatever version the conference committee brings forward. For final passage, the conference committee’s report will need one vote each in the Senate and in the House.

Bill to prevent federal student loan interest rates from doubling on July 1 filed in US House

Legislation related to student loan interest rates was filed in Congress this week. The “Smarter Solutions for Students Act,” or HR 1911, was filed on May 9 by John Kline (R-MN), Chairman of the House Committee on Education and the Workforce, and Virginia Foxx (R-NC), Chairwoman of the  Subcommittee on Higher Education and Workforce Training.

Under current law, the interest rate for undergraduate subsidized and unsubsidized student loans is set to increase from 3.4 percent to 6.8 percent on July 1. HR 1911 would change this so that the interest rate for these loans is calculated based on the 10-year Treasury Note plus 2.5 percent. The interest rate for graduate and parent PLUS loans would be calculated based on the 10-year Treasury Note plus 4.5 percent under HR 1911. The proposal would reset once per year and cap interest rates at 8.5 and 10.5 percent, respectively.

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