HANCOCK II COULD HARM BOND SALES

Although passage of Hancock II would not automatically doom the sale of $250 million in bonds approved by voters last month, it would make them far less attractive because the pool of funds to pay the debt would be greatly reduced.

In the case of colleges and universities, choices would focus on the value of new buildings compared to existing services that would have to be cut in favor of funds to pay off the bonds.

In the area of corrections, decisions for new prisons would not be based on providing additional beds, but rather whether newer facilities could be operated more efficiently and replace older institutions.

"It definitely changes the tradeoffs," said state Budget Director Mark Ward.

The Joint Committee on Legislative Research concluded Tuesday that Hancock II would lead to state budget cuts of between $1 billion and $5 billion, depending upon how the amendment is interpreted. But because some sections of the state budget can't be cut, parts of state government that have a lot of discretionary funding like higher education and corrections would be hit especially hard.

That means bonds would have to be paid from further cuts in existing programs. In many cases, it might not be worth the tradeoffs to build a new building.

Chris Sifford, communications director for Gov. Mel Carnahan, who proposed the bond plan to lawmakers this year, said the bond issue would have to be given a second look.

"We are taking a look to see how it would impact the bond decisions," he said. "Having Hancock on the ballot is certainly making us take a very hard look at those decisions and how we proceed from here. If you are looking at more than a billion dollars in cuts in state services, you have to look at debt service. It has given us great concern."

Said Ward: "What we will be doing in the near future is consulting with college presidents and officials in the corrections department and youth services to see what the appropriate strategy is. I think we need to take a hard look as to whether we go forward.

"We need to make sound program decisions, and the question you have to ask is, Are these projects more important than the existing projects that would have to be cut?"

With Southeast Missouri State University, which has $12.3 million included in the bonds for a new College of Business building, a tough choice would have to be made. Some projections on the impact of Hancock II show higher education's budget being cut by one third.

"The question is, Would the university want their operating budget slashed in order to pay for a business building?" said Ward. "Those decisions would have to be weighed statewide."

In corrections, Ward said the goal of having additional prison beds from the bond issue will not be met if Hancock II passes. "There is no way we are going to end up with the same amount of prison space we have today, much less add prison space through a bond issue," Ward said.

"There will not be more prison beds; there will be fewer."