April 16, 2014

House holds first hearing on proposed bond issuance (AUDIO)

The Committee that will put together the state House’s version of a bonding proposal has heard its first testimony.

From right, the new House Appropriations Committee on Infrastructure and Job Creation's Chairman Chris Kelly and Vice-Chairman Lincoln Hough listen to the committee's first testimony.  (Photo courtesy; Tim Bommel, Missouri House Communications.)

From right, the new House Appropriations Committee on Infrastructure and Job Creation’s Chairman Chris Kelly and Vice-Chairman Lincoln Hough listen to the committee’s first testimony. (Photo courtesy; Tim Bommel, Missouri House Communications.)

The proposal, HJR 14, has been introduced at $950 million dollars and is described as identical to one introduced in the Senate by Senator Kurt Schaefer (R-Columbia). Lawmakers say that figure could change however, either higher or lower.

The measure is sponsored in the House by Speaker Tim Jones (R-Eureka), who says it will change dramatically before it goes before voters.

“This is simply a starting off point. I’m sure this bill will undergo a lot of different changes and revisions throughout the process. We will have to marry it with whatever comes out of the Senate, so I would ask everybody to keep an open mind and be patient as we work through this. This is an extremely critical opportunity for our state but it is one that I think could result in a really bold and bright future for Missourians.”

Mental Health Department a no-show

In talking about possible targets for proceeds from a bond issuance, Jones, Governor Jay Nixon, Committee Chairman Chris Kelly (D-Columbia) and others have all said Fulton State Mental Hospital is likely to be included. Yet at Tuesday’s hearing the agency that oversees that facility, the Department of Mental Health, was not present as scheduled.

Kelly says he is disappointed the Nixon administration did not see fit to discuss the needs at Fulton, but says the no-show doesn’t hurt that hospital’s chances to be a priority.

“We all know the need is there, and it’s ridiculous to think about punishing the mental health patients because the administration doesn’t articulate it.”

Lawmakers will have to come to agreement on how much to spend on Fulton. Some have said a total replacement is needed, while others say that probably won’t happen.

It is estimated that a new mental health facility would cost about $211 million. The current language of the proposal says no more than $250 million will be used for construction of state buildings and $40 million of that must be used for parks and park facilities.

Mixing transportation with other needs

The hearing was held on the same day that a 10-year, one-cent sales/use tax proposal was introduced by Senators Mike Kehoe (R-Jefferson City) and Ryan McKenna (D-Crystal City) and Representative Dave Hinson (R-St. Clair) to support transportation. Kelly hopes the two issues can compliment each other.

“I believe that ultimately we can only have one proposal and I hope we find a way to comfortably combine the highway proposal and the general revenue proposal, and I believe we can do that.”

Jones says the two discussions could become one, but says he would rather see a revenue-neutral option to support transportation.  Some transportation projects could also be included in the bond package.

Much of the testimony came from some of the state’s colleges and universities, who told the committee how great their backlog of needs has grown.

University of Missouri System President Tim Wolfe testifies on HJR 14, sponsored by House Speaker Tim Jones (right).  (Photo courtesy; Tim Bommel, Missouri House Communications.)

University of Missouri System President Tim Wolfe testifies on HJR 14, sponsored by House Speaker Tim Jones (right). (Photo courtesy; Tim Bommel, Missouri House Communications.)

University of Missouri System President Tim Wolfe tells lawmakers, his campuses could use all the $950 million being considered, and more.

“Because we’ve been chosen to invest scarce resources in mission-critical areas like education today we have a $1.3 billion backlog of renovation and repair projects on all four of our campuses.”

Wolfe says state support from the bonding package would encourage donors to the University system to accelerate their investments.

Missouri Parks Association board member Mike Sutherland told the Committee there are about $400 million in capital improvement needs at the state’s parks and historic sites.

Kelly cautioned those at the hearing that no one will get everything they want.

“Every single one of us will be disappointed, but every single one of us will also be delighted. There’s no way that we can do everything that we need to do but we can do some very good things and move our economy forward.”

See our earlier stories on bonding in the 2013 session.

No one testified against the proposal, which Vice-Chairman Lincoln Hough (R-Springfield) says shows there is bi-partisan support across the state for the issuance of bonds. One urged lawmakers to make sure to identify cost savings or a new revenue source to fund the debt service on bonds, to protect other state services like K-12 education, higher education and public safety.

Jones told the committee taxpayers will be protected under the proposal.

“By specifying that the proceeds from the sale of the bond can be only used for projects that meet the criteria of this legislation. Most notably that criteria will first be established by this committee. Additionally the revenue placed in the Fifth State Building Fund, as we’re commonly referring to this bill, can only be used to pay off the principal and interest of the bond.”

He encouraged the committee to investigate a “more official mechanism,” a sort of “taxpayer watchdog,” to watch the projects as they move forward.

As for when the bond proposal might be ready to go to voters, Kelly says he would like to see it done this year but says it’s an “organic” process. Jones says he knows development will take time.

“I am under no delusions that this is going to be an easy process, so I start with the premise that this may be a 2-year project.”

AUDIO:  House Speaker Tim Jones presents HJR 14, Missouri Fifth State Bonding Issue, 6:38

AUDIO:  University of Missouri System President Tim Wolfe testifies on HJR 14, 6:30