Analysis: State may shed oversight duties to save money

JEFFERSON CITY, Mo. -- Maintenance workers at the Missouri Capitol and police in St. Louis may have something new in common. Both could be freed from direct state oversight under proposals receiving fresh consideration from lawmakers because of their potential cost savings.

Legislation granting the city of St. Louis control over its police department -- and ending the oversight of a state board -- has languished in the Legislature for several years. But the newly highlighted potential for state savings helped propel the legislation to first-round House approval this past week.

Money also was the main motivator as a Senate committee heard testimony last week on the possibility of privatizing the maintenance and operation of state buildings. The proposal not only would shed employees from the state payroll but also could cut help cut into a backlog of maintenance projects estimated by a legislative panel to reach nearly $1 billion.

Neither the police legislation nor the building maintenance plan is a lock to become law. But the mere fact they are gaining some traction illustrates the extent to which several consecutive years of budget constraints has reshaped debate in the Missouri Capitol.

"It's showing at least you have some legislators that are being willing to think outside the box, or go back to previous ideas and look at them in a different light, to get through a current budget situation where they realize the budget gap is growing every year," said Will Miller, an assistant professor of political science at Southeast Missouri State University.

Dramatic reversal

Legislation to grant St. Louis control over its police department was defeated by the House 86-63 last year. This year, it received initial approval 123-34 and needs only a second House ratification to advance to the Senate.

Part of the reason for the dramatic reversal may be the addition of 78 House members as a result of term limits, retirements and electoral defeats.

But House leaders also point to new concerns over state finances.

Since 2005, the state's legal expense fund has paid about $10 million in claims for St. Louis and Kansas City police, because both are overseen by state boards.

The way the fund is set up, the state could continue to pay up to $1 million annually in legal expenses for each of the St. Louis and Kansas City police departments.

Raising the stakes

But the financial stakes were raised considerably this year when St. Louis Mayor Francis Slay suggested the city might invoke a 1982 Missouri Supreme Court ruling to seek $98 million in state aid for its police force.

In that case, the Supreme Court ruled in a 4-3 decision that the St. Louis Board of Police Commissioners was a state agency and thus -- under the terms of the 1980 Hancock Amendment to the state constitution -- could not require the city to spend more on its police department than it did during the 1980-1981 fiscal year. If the police board sought anything more than that, it would have to turn to the state for the money, the court said.

That decision has been largely ignored in recent years, as St. Louis has funded the budget for its police force. But to make a point about the need for local control, Slay is now threatening to stick the state with the tab. The St. Louis police budget was around $66 million in 1980. Now it's about $164 million -- a gap of $98 million that St. Louis could try to extract from the state.

Lawmakers, who already face a difficult task in crafting a balanced budget, aren't eager to add to their financial strain.

"The taxpayers of the state of Missouri have a $90 million millstone hanging around their neck that could be called in at any time" by St. Louis, said Rep. John Diehl, R-Town and Country. "I think that did cause a lot of members to have pause. Whatever they may think about the governance issue in the city, the little mini-arguments aren't worth saddling the taxpayers of the whole state with the liability."

The House endorsement of the St. Louis police legislation came just one day after the Senate Governmental Accountability Committee heard testimony about the potential of privatizing the maintenance and operation of state buildings.

Officials from Johnson Controls outlined a potential arrangement in which a private consortium -- including companies such as itself -- would reach a long-term contract to take over the management of state buildings. Banking on a steady stream of state money, the private consortium could issue bonds to get cash up front that could be used address part of the backlog of needed repairs to state buildings.

A report issued last month by the Joint Committee on Capital Improvements and Leases Oversight estimated it could cost Missouri nearly $1 billion to carry out almost 26,000 maintenance and repair projects. Some of these repairs are being made with existing money. But that total did not include every single state facility. And new problems are assured to crop up.

"Our buildings are crumbling across the state," said Sen. Jim Lembke, R-St. Louis County, who is chairman of the accountability committee. As for the privatization proposal, he said: "It's interesting. It's something for us to dig into further."

If lawmakers determine there are savings by shedding the maintaining duties, the privatization plan could start to pick up momentum just as the St. Louis police legislation has done.