Domestic issues set to dominate 2007 state legislative session

JEFFERSON CITY, Mo. -- Education, health care and taxes -- the big three of domestic issues -- all will be on the agenda as Missouri lawmakers convene today for their annual session.

Republican Gov. Matt Blunt and legislative leaders want to cut taxes -- the question is which ones, and by how much -- as one way to deal with an expected revenue surplus.

They also intend to tackle an overhaul of the state's health-care programs for the poor, or at the very least must extend a scheduled mid-2008 expiration of the state's Medicaid program.

But both the health-care and tax issues are likely to take a back seat to education at the start of the year. Whether as part of their regular session or in a special session that could be called by Blunt, lawmakers plan early consideration of Blunt's plan to finance college construction projects by tapping into the profits of the state's student loan agency.

Blunt's plan calls for the Missouri Higher Education Loan Authority to transfer $350 million over six years to an economic development board, which would direct nearly all of that money toward buildings at public colleges and universities.

In exchange, the state would provide MOHELA a 10-year pledge of continued tax-exempt bonding allocations to underwrite additional student loans, and the University of Missouri would pledge a good-faith consideration of greater use of MOHELA loans.

The deal already has been approved by Blunt's administration and the MOHELA board. But to take effect, it also must be ratified by legislators in 2007.

In a related arrangement among Blunt and GOP legislative leaders, the legislature also will consider increased funding for college scholarships. Some lawmakers, including top House officials, want to use the opportunity to revamp Missouri's college grant programs and add a new merit-based scholarship.

"The problem is making college accessible for kids in Missouri," said House Speaker Rod Jetton, R-Marble Hill. "We'd really like to pass a major scholarship program for college."

Funding for both higher education and K-12 schools will be in the spotlight, the latter because of a challenge to the state's school funding method that is to go to trial today in Cole County Circuit Court, just a few blocks east of the Capitol.

State spending is likely to increase for all levels of education because of the expected budget surplus -- estimated by Jetton between $300 million and $500 million -- for the upcoming fiscal year.

Blunt would like to give a portion of that money back to Missourians in the form of a tax break, though he hasn't released any particular proposals yet. Jetton has proposed to do so by exempting Social Security benefits and certain other pension payments from the state income tax.

"My goal is to have a smaller tax burden on Missourians at the end of the coming legislative session than we do at the beginning," Blunt said.

The governor attributes part of the current surplus to the budget cuts made two years ago. Chief among those was the curtailed growth of the Medicaid program through tighter eligibility criteria and reduced benefits for poor adults.

Missouri's Medicaid program peaked with more than 1 million recipients in spring 2005. Following the cuts and tightened eligibility, enrollments had fallen to 828,358 as of October, the most recent month for which figures were available.

During the 2007 session, "the No. 1 thing is to move forward on health reform in Missouri," said Senate President Pro Tem Michael Gibbons, R-Kirkwood.

A report released last month by Blunt's administration could serve as a road map. It recommends a greater emphasis on preventive health care, rewards for people who try to stay healthy and higher state payments to the physicians who treat Medicaid patients.

Under that plan, the name "Medicaid" would be dropped for the catchier "MO HealthNet."

Other aspects under consideration include the expansion of health coverage to some children and new incentives for small businesses to offer health insurance to their employees.

New on the agenda this year will be toughened safety requirements at mental health facilities and group homes, partly prompted by a Nov. 27 fire that killed 11 people at an Anderson facility for the mentally ill and mentally disabled. Blunt already has embraced a sprinkler-system mandate for such facilities.

Back before the Legislature after past failures could be attempts to toughen Missouri's immigration laws, tighten its seat belt requirements and impose new dam inspection requirements -- the latter in response to the December 2005 breach of the Taum Sauk reservoir.

Also back, with a slightly new twist, will be the debate over embryonic stem-cell research. Voters narrowly approved a constitutional amendment in November guaranteeing that any federally allowed stem-cell research can occur in Missouri, including on human embryos created through a contentious cloning procedure. Opponents of the measure have vowed to fight back with an amendment asking voters to repeal what was just enacted.