SOUTHEAST MISSOURI STATE FARES WELL IN GOVERNOR'S BUDGET

JEFFERSON CITY -- After several years of effort, full funding for a new College of Business Building at Southeast Missouri State University has finally made it into the governor's budget.

In his budget for Fiscal Year 1995 that begins July 1, Gov. Mel Carnahan included $12.68 million for the business building as one of the projects that would be funded with a $250 million general obligation bond issue he is proposing.

While inclusion in the governor's budget is a milestone for the university in its long effort to have the building funded, before money will be available several major hurdles have to be cleared. One of those hurdles is winning approval from members of the General Assembly, and after that the bonds would need approval from Missouri voters.

Carnahan's budget, unveiled as part of the annual State of the State address delivered to a joint session of the legislature on Wednesday morning, offered good news for institutions of higher education in the state. It includes a 3 percent increase in operating funds for the colleges and funding for maintenance, repair, and capital improvement projects that have been unfunded priorities of the institutions.

Southeast, which had an appropriation of $32.5 million for the current fiscal year for its operating budget, was allocated increased funding of $1 million. In addition, the Bootheel Education Center at Malden, which in the past has been part of the university's operating budget, was funded as a separate line item with $357,000.

Southeast also received an increase of $294,000 for maintenance and repair, and $704,642 in funding for library technology and acquisitions, computer networking, and other academic equipment that will be paid for with funds available only in the next fiscal year.

Under the capital improvements portion of the budget, to be funded from general revenue, Southeast is allocated: for maintenance and repair/corrective construction, $1,022,815; Academic Hall third floor renovation, $222,100; Magill Hall renovation, $224,500; Houck Building renovation, $386,400; and various other renovations, $1.75 million.

Most of the renovation projects are to be funded with money from riverboat gambling. No boats are operating in Missouri right now, but four could be in operation this spring and others later in the year.

Beginning in Fiscal 1996, all riverboat gambling tax revenues will go to the school foundation formula for elementary and secondary education, but in the next fiscal year the governor is proposing that university projects be funded.

State Budget Director Mark Ward said estimates are that riverboat gambling will produce $69.1 million during the rest of this fiscal year and FY 1995. Of that, $48.2 million is earmarked for education building maintenance and repair, mainly at universities.

Ward acknowledged that the projections are tentative because no boats are operating yet, however, he said the gambling projections are "moderately conservative."

In addition, funds are included for a supplemental appropriation that will be taken up by lawmakers in the next few weeks, to complete the renovation at Parker Hall. The budget figure is $663,400.

Sen. Peter Kinder, R-Cape Girardeau, and state Reps. Mary Kasten, R-Cape Girardeau, and David Schwab, R-Jackson, said they were pleased with the university projects included in the budget. But the three legislators were guarded about the capital projects because of the uncertain funding mechanism.

"My feeling today is principally one of elation that the governor has seen fit to put funding for the business building in the budget at the amount we requested," said Kinder.

He pointed out that last year the project was not in the budget, and a late session effort to have it funded with another plan fell through when the budget chairmen of the House and Senate had a conflict; no higher education capital projects were funded.

"This year we are ahead of the game going into the appropriations process, but we have a cautionary note," added Kinder.

He pointed out that the $2.4 million in local support helped make the difference and reflects the strong support the business building has in Southeast Missouri. "It is a sound proposal we deserve to have," said Kinder.

The senator said he was also elated to see the Bootheel Center funded as a separate item. Late last year, a delegation of Southeast Missouri legislators and university officials met with members of the governor's staff, including the budget director, to discuss the value of the center. Kinder said he believes that was the turning point.

Kasten added: "I certainly like the governor's emphasis on higher education, but I don't know where the money is going to come from to fund the initiatives."

Schwab said that while he was pleased to see the additional funding for Southeast projects, he too was concerned about the source.

Some legislators have expressed concern about increasing the state's bonded indebtedness, but Ward maintained that issuing the proposed bonds would in no way jeopardize Missouri's AAA bond rating.

Said Ward: "Missouri is a low debt state and has a AAA rating because of what the rating agencies call its conservative approach to debt. For our state, $250 million would not be extravagant by any means. This would leave us with debt service of no more than 2 percent of our total budget, which is not out of line. In fact, it is much lower than many other states."

Ward added that assuming the bonds would not all be sold at the same time, they could be paid off within 25 years, using an annual appropriation of about $18 million.

Carnahan, in comments to reporters at a luncheon following his speech, said he was optimistic that voters of the state would approve a bond issue.

Said Carnahan: "It is always controversial trying to pass bonds, but I think we can make a strong case for the proposal. And, we will still be low on what we have appropriated for debt service."

The bond proposal includes: $130 million for the construction of 16 new buildings at universities, with the 20 percent of the costs raised at the local level; $20 million to construct six 30-bed facilities around the state for disturbed youth; $9 million to replace the Kansas City Honor Center, and $91 million for the construction of new prison space, as outlined in a study being conducted by the Department of Corrections.

Kinder, Kasten, and Schwab all said they would need to study the bond proposal before taking a position on it.

One option to fund some of the projects if the bond issue runs into difficulty with lawmakers, is sending to the people a constitutional amendment allowing a video lottery in the state, with proceeds earmarked for higher education capital improvements.

The video lottery has been suggested as a potential alternative funding source for the business building at Southeast.

Schwab said he is definitely opposed to the concept of a video lottery; Kasten and Kinder said they have serious reservations about it.

The 1994 session of the Missouri General Assembly is required to adjourn at 6 p.m. on May 13. State law requires the budget to be finalized one week before adjournment.