Gov. Blunt's highly unlikely MOHELA scenario comes true

JEFFERSON CITY, Mo. -- Still stewing over the legislative failure of one his hallmark proposals, Gov. Matt Blunt decided last May to simply bypass those bickering lawmakers.

His grand plan to construct buildings at every public university in Missouri -- financed through the profits of Missouri's student loan agency -- would move forward regardless. He would pursue a direct transfer of the money from the Missouri Higher Education Loan Authority to universities.

Of lawmakers, Blunt declared as they ended their session May 12: "It is highly likely they've had their one and only chance to have an influence" on his plan.

Well, the highly unlikely has prevailed.

Blunt's revamped plan to tap student loan profits for college projects will indeed be back before the legislature in 2007.

The Republican governor -- insistent for months that his plan required no legislative approval -- acceded to a legislative contingency because of fears Attorney General Jay Nixon would sue MOHELA board members if their approval vote last Wednesday was decisive.

So maybe 2007 will be lawmakers' last chance to influence the plan -- or, for that matter, Blunt's last chance to get it enacted.

One thing is for sure. The plan as it now stands is remarkably different from what Blunt initially outlined Jan. 26. He first proposed to sell MOHELA in its entirety, then agreed with an agency in self-survival mode to an alternative of selling half its student loans upfront and buying and selling more over the next four years -- generating $450 million for the state.

Under that plan, the student loan agency's initial $240 million payment to Missouri was to have occurred this past Saturday. But it did not.

Benefiting from hindsight, MOHELA officials who had assured the $450 million deal was feasible later concluded it was not. Now, they say, the agency that owns $5.4 billion in student loans from around the nation can afford to pay the state $350 million over six years and still survive.

With further hindsight, attorneys hired by Blunt's administration and MOHELA have concluded the plan once assured as legal actually may not have been. Now, they say, the new deal is legal because MOHELA would get various benefits allowing it to underwrite additional student loans in exchange for its $350 million in payments.

To critics, the reversals in the ever-evolving proposal provide a good reason not to enact it.

"When do we depend on it's really legal?" the longest-serving MOHELA board member, John Greer, asked before getting outvoted 4-2 for the plan. "Are we going to change our minds next week, or the next week, or the next week? I question when do we decide it's really legal? I think we'll find out in the future whether it was or not."

But for all the changes, the Republican governor and GOP legislative leaders say the new version is likely to stick. They note the project list is similar to what was previously discussed and the new agreement already has the blessing of both the House and Senate leaders. They're hoping for a relatively quick legislative vote.

"We had a lot of different opinions last year. It was somewhat a dicey proposal as we moved it through," acknowledged House Speaker Rod Jetton, R-Marble Hill. "Now I think everyone's very comfortable with what's been laid out by the governor."

Blunt spokesman Spence Jackson doesn't expect lawmakers to seek any changes to the deal.

That's certainly true when it comes to discussions through the media. But lawmakers have not had any formal discussions -- known as committee hearings and debates -- on the latest version of Blunt's plan. And some lawmakers, primarily minority party Democrats, are eager for some very lengthy discussions.

It should also be noted that the legislature that convenes Jan. 3 will not be the same one that now exists. Because of term limits and incumbents not opting to run again, at least one-sixth of the House members will be new, and potentially more if some incumbents lose on Nov. 7. The Senate is guaranteed a lesser turnover -- just half of the 34 seats are up for election, and only four of those lack incumbents on the ballot.

With new lawmakers, the passage of more time and the lessons of hindsight, it would seem bold to assume Blunt's latest plan is highly likely to be enacted as it is. So far, change has been the most consistent element.

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EDITOR'S NOTE: Capitol Correspondent David A. Lieb covers Missouri government and politics for The Associated Press.