Mo. considers changes for aid to water projects

Saturday, October 4, 2008

JEFFERSON CITY, Mo. -- Same-sex marriage. Stem-cell research. Transportation funding. Missourians have been asked to vote on some high-profile ballot issues in recent years.

But this isn't one of them. Missouri voters will be asked Nov. 4 to change part of the constitution that permits the awarding of state grants and loans for local storm water projects in first-class counties.

The proposal is so obscure that some politicians forgot they even placed it on the ballot.

Asked during a news conference at the end of the legislative session whether any newly passed legislation would appear on the ballot, Gov. Matt Blunt and Senate Pro Tem Michael Gibbons each said that they didn't think so. None of the dozens of other lawmakers standing nearby said anything to the contrary.

Yet lawmakers overwhelmingly approved the constitutional amendment, along with companion legislation that's designed to help implement the changes if they're approved by voters.

State storm water grants and loans are funded by selling tax-exempt bonds. The last bond sale was in 2002, and since then, federal tax requirements have been changed to require that the proceeds from bond sales to be used more quickly.

That means that without making some changes, the Department of Natural Resources fears it will not be able to offer any aid for local governments' storm water projects.

Voters in 1998 approved $200 million in tax-exempt bonds to be administered by the Department of Natural Resources to help out with storm water projects. The money can go to the city of St. Louis and the state's 17 first-class counties, which includes those housing Kansas City, Springfield, Columbia and Jefferson City. So far $45 million has been disbursed, which is split based on population.

Currently, the aid offered by the DNR must be divided evenly between grants and loans. The proposed amendment would change that to allow the department to decide how the funds should be divided.

Federal tax rules now require that the proceeds from selling tax-exempt bonds be spent down within three years. Joy Reven, the head of the department's state grant and loan unit, said meeting that deadline for using the funds would be easier if the department isn't required to offer as many grants as loans because counties generally seek grants before asking for loans.

Unlike a loan, the project grants don't have to be repaid. But those counties seeking a state grant for storm water projects would have to match whatever the amount the state offers. Local governments can also combine loans with grants for more expensive projects.

The proposed constitutional amendment would make two other significant changes. It would allow the state to give extra money to those counties getting the state aid if an eligible local government turns it down. Currently, those funds are held in reserve.

The measure also would permit the DNR to lower how much local governments must put up to be eligible for grants.

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