HANCOCK CHALLENGE DELAYS FUNDING

JEFFERSON CITY, Mo. -- State funding for the new Cape Girardeau Career and Technology Center and the River Campus project has been put on hold pending resolution of two lawsuits challenging the state's calculation of taxpayer refunds.

Funding for the two projects, as well as projects in Kennett, Mo., and Poplar Bluff, Mo., was included in a $161 million capital-improvements bill signed into law by Gov. Mel Carnahan this summer.

While the delay will not immediately affect Southeast Missouri State University's planned River Campus, the Cape Girardeau School District was counting on receiving as soon as possible $1 million for its new career and technology center, which is about 75 percent completed.

"I'm not overstating it when I say to not receive that $1 million would be extremely serious," said Dr. Dan Steska, Cape Girardeau school superintendent. "To lose $1 million would put us in a real cash-flow problem situation as well as an overall revenue problem situation. It is very serious."

The appropriation for the school was already $800,000 short of what the district had hoped for. If the promised state revenue isn't released to the district soon, the district will be forced to shift money from its operating fund to cover the state's share of the project. The career and technology center being built on South Silver Springs Road is expected to open next fall at a total cost of $11 million.

"I'm hoping the state is successful in this litigation and the $1 million becomes available," Steska said. "If we don't get that, I don't know what we're going to do."

The lawsuits, brought by Missouri business interests and two Republican legislators, claim the state owes taxpayers a combined $524 million in additional refunds under the Hancock Amendment, which limits the growth rate of state revenue.

Since fiscal year 1995, the first year the revenue cap was exceeded, the state has returned more than $900 million to taxpayers in the form of refunds. The lawsuits contend the state has conservatively -- and incorrectly -- calculated the amount of money owed in order to avoid giving back even more revenue.

Plaintiffs in the cases include the Missouri Chamber of Commerce, the Missouri Merchants and Manufacturers Association, Associated Industries of Missouri, state Rep. Gary Marble of Neosho, Mo., and state Sen. Franc Flotron of Chesterfield, Mo. Various elected and appointed state officials, including Carnahan, are named as defendants.

Cole County Circuit Judge Thomas J. Brown III is scheduled to hear oral arguments today in Jefferson City. Brown has 30 days to make a ruling. Regardless of his decision, the case likely will only be resolved with a decision from the Missouri Supreme Court, which could take months.

"We have to make the assumption that this will end up in the Supreme Court before it's done," said Bret Fischer of the state's Division of Budget and Planning. "That is where all the other cases" involving the Hancock Amendment "end up being finally decided."

In the meantime, the capital improvements appropriations, with the exception of a few minor spending components, remain on hold. Should the ultimate ruling go against the state, most -- if not all -- of the funds would be shifted to taxpayer refunds.

In addition to the Cape Girardeau career and technology center money, other earmarked spending included $11.95 million for Southeast's River Campus, $150,000 for the university's Kennett Learning Center and $750,000 for a vocational facility in Poplar Bluff.

Fischer said if the case isn't resolved by the time the fiscal year ends June 30, funding for the capital improvements projects will have to be reappropriated. Usually that is just a formality, Fischer said.

"It is rare when things are appropriated once that the General Assembly would later say no," Fischer said.

Unlike the worries the funding delay has created for Cape Girardeau schools officials, the Hancock lawsuit isn't causing any problems for Southeast's River Campus, which is already on hold for other reasons.

The $36 million project, in which a fine arts campus is to be built on the grounds of the former St. Vincent's Seminary, is being funded with revenue from the state, the city of Cape Girardeau and private donations to the university.

Unrelated litigation is currently tying up the city's share of the River Campus project, which would come from a voter-approved sales tax. The parties in that case are awaiting a decision from Madison County Associate Circuit Judge Robert Stillwell. Both sides have promised an appeal should Stillwell rule against them.

Until that matter is resolved, university president Dr. Ken Dobbins said Southeast has no need for the state's money. In any event, $4.6 million previously appropriated from the state in 1999 is available when the university is cleared to proceed with the project. It will be some time before the other $11.95 million is needed, Dobbins said.

"It would not hurt us even if we have to wait another six months or more," Dobbins said. "We couldn't and we wouldn't pull down all of that money in one year. We will probably pull it down over three or four years."