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Senate approves bill to spend money on revenue bonds
JEFFERSON CITY, Mo. -- The effort to cover Missouri's budget shortfall received a boost Thursday as the Senate gave final approval to a bill appropriating money for the costs of selling revenue bonds.
The revenue bonds would net the state $335 million, of which $150 million would help cover the shortfall in the current budget. The balance would be saved until the next fiscal year, which begins July 1. Legislators authorized the bonds last month. But separate legislation was needed to appropriate funds for the costs of the bond sale and provide for spending the proceeds.
The Senate sent that bill to Gov. Bob Holden by a 24-9 vote Thursday. The bill previously passed the House.
After Holden signs the bill, the state Board of Public Buildings then can set up the bond sale. State officials say the sale must be completed in April so that plans can be made for spending the revenue in this fiscal year.
The revenue bonds are part of a plan to close a projected $400 million budget shortfall this year and to make a dent in next fiscal year's projected $1 billion shortfall.
The rest of the current year's shortfall is being covered through budget cuts.
Although Thursday's vote seemed inevitable based on a previous agreement among Holden and legislative leaders to use revenue bonds, several senators stressed that they supported the bond issue reluctantly. All nine "no" votes on the bill appropriating money for the bonds were cast by Democrats.
The $400 million bond issue is projected to cost the state $738 million dollars to pay off over 25 years.
Sen. Pat Dougherty called the bond plan a "horrible mistake," noting his 4-year-old grandchild would be almost 30 by the time the bonds are paid off.
Dougherty, D-St. Louis, had advocated using money from the state's so-called Rainy Day Fund to cover the budget shortfall. Money borrowed from that fund must be paid back with interest within three years.
Senate Appropriations Committee Chairman John Russell said he preferred not to use the state's rainy day fund this year, because it may be needed in the next fiscal year.
"None of us would have liked to have bonds, but the alternatives were not viable," said Russell, R-Lebanon.
Technically, the bond revenues would be used to pay for construction and repairs at buildings owned by the state and its colleges. That would free up money to go toward the budget shortfall.
The bill is HB14.