DEPARTMENT DUMPS ROAD BONDS PLAN

Citing lack of support, the Missouri Highways and Transportation Department will not pursue a proposal to issue $500 million in bonds to make up for shortfalls in anticipated roads funding.

The primary effect of this decision will be to delay by up to one year some projects included in a three-year roads plan outlined by the department last year.

"Had we used bond financing, projects in the Short Term Action Plan would have been completed or under contract by the end of 1998," said Steve Forsythe, the department's public affairs director. "Now it will take until the end of 1999."

Mark Preyer, a member of the Highways and Transportation Commission, favored the decision but said it could be revisited in the future. No formal vote was taken and the issue "kind of died a natural death," he said.

Preyer, a Kennett lawyer, was one of three members of the six-member commission appointed by Gov. Mel Carnahan in January.

"Before going out and promising a $500 million bond would solve all our problems, we wanted to make sure," Preyer said. "We could not do that confidently."

In 1992, the department unveiled a 15-year roads plan to be paid for through a state fuel tax and federal funds. However, last year the department admitted that its goal was unrealistic and exchanged the long-term plan for the three-year version. The department did not want to make another miscalculation.

"We do not want in one or two years to come back and say, gosh, we made a mistake," Preyer said.

Needed support in the General Assembly also wasn't there. The commission has the power to issue bonds without a vote of the people if it receives approval of the Senate and House of Representatives.

"In talking to the legislators, it was not clear it could be successful," Forsythe said. "The commission and the department said when they started pursuing this that they wanted good, bipartisan support so success with bond financing would not be a problem. Without a clear sign of success, we thought it best to drop it."

While the $500 million in bonds would have allowed the department to meet its construction goals, it would have also saddled the department with $250 million in interest payments.

Some department officials felt the benefits of timely completion of projects -- improved safety, economic development -- would offset the additional quarter-million-dollar price tag. However, Preyer said both the public and legislators seemed "luke warm" to the idea. Many -- including some commission members -- felt it was not sound financial policy and that spending on roads rather than interest would be the wiser option, even if projects must be delayed.

Forsythe said the department will consider alternate funding mechanisms.

Despite the glitches, the department still intends to complete the projects in the 15-year plan -- assuming they are still needed -- even though it may take a few extra years.

"Everyone feels an obligation to follow the map produced in 1992. Obviously, we will try to build as many as those as we can," Preyer said.