STATE DEBT EXCEEDS $2 BILLION

JEFFERSON CITY -- If you took all the sales and use taxes paid every year by Missourians and added all of the corporate income taxes, inheritance and estate taxes, liquor taxes, beer taxes, county foreign insurance payments and corporate franchise fees, you would still be $2 billion short of Missouri's total bonded indebtedness and its annual building and facility leasing costs.

By a narrow margin, Missouri voters Tuesday approved another $250 million bonded debt -- plus interest -- to build new prisons and meet building and remodeling costs at state colleges and universities. Since bonds haven't yet been issued on the state's newest indebtedness, officially called the Fourth State Building Bond Issue, there is no way of accurately determine how much general revenue will be required to pay the interest costs on $250 million. But the total will far exceed the amount of sales and use taxes the Department of Revenue rakes in each year.

There is no guessing when it comes to the state's current bonded indebtedness: $2,042,753,301, a figure that includes both principal and interest. Added to this, however, will be the additional millions for new prison and college buildings, the interest on these bonds, plus the state's annual cost of leasing office and facility buildings, an expenditure that in the fiscal year that began July 1 will reach $30,318,274 for a 12-month period.

An educated guess by one state fiscal officer is that Missouri's official bond indebtedness, including annual leasing costs, will soon equal or exceed $2.5 billion.

Interestingly, Missouri had a relatively small bonded indebtedness 25 years ago, when revenue bond issues were just beginning to come into vogue and were still virtually unknown. Until the 1970s, the state relied almost entirely on its capital improvements budget to fund new construction and make major repairs to state buildings. The demand for more services, which are funded from the state's operating budget, gradually reduced the amount of tax money available for capital investments.

By no less an authority than the Missouri Constitution, state officials must pay the cost of public indebtedness, which includes signed lease contracts, before appropriating funds for any other activity, service or program, including public schools, welfare assistance and public health. Debt-service costs are deducted first from annual revenue estimates before a single dollar is allocated to any of the state's 16 departments and divisions.

Making up the $2-plus-billion bonded indebtedness total are a wide variety of projects ranging from water-pollution-control bonds to park-site purchases to payments to St. Louis and Kansas City for convention and sports facility projects. This latter bond issue is sometimes known as the St. Louis stadium project, but it also includes millions of dollars to Kansas City for its yet unfinished convention site improvements.

The largest bond issue, actually a series of them, is the pollution control program, which has a current indebtedness of $481,956,613. The second largest, excluding the as-yet-unappropriated $250,000,000 bond issue, plus interest, is the convention-sports facility project. The so-called stadium project has a current indebtedness of $275,000,000, including interest.

Another major debt, this one incurred 12 years ago, is the Third State Building Bond Issue designed to provide new buildings for state universities, colleges, state agencies, correctional facilities, hospitals for the mentally ill and habilitation centers for the developmentally disabled. The legislature even approved funds from this bond issue to build members a new parking garage and refurbish various state offices. Missourians still owe more than $45 million on the original $600 million issue.

All of this bonded indebtedness is secured by the real property of all Missourians, which means that everything Missouri's 5.2 million citizens own is the collateral offered by the state to underwrite the sale of the various bond issues. The state government in Jefferson City owns very little real estate and a relatively small amount of personal property, the total of which probably wouldn't be adequate to underwrite even the smallest bond issue of Missouri. Incidentally, the state leases a sizable quantity of its usable assets, such as computer mainframes and telecommunications systems, from private industry and doesn't hold title to this property.

Efforts have been made by officials in the Budget and Planning Office within the Office of Administration to reduce interest costs in the past two years. Earlier-enacted bond issues, such as 1982's $600 million bonds for state building construction, sold at rates much higher than have been offered in recent years, so the state successfully renegotiated these rates, saving several million dollars in taxpayer funds.

Refinancing of other earlier-issued bonds has resulted in additional savings for the state. One fiscal expert said he was unable to estimate accurately the savings, but the amount "would run into several million dollars."

MAJOR BOND ISSUES IN MISSOURI

To get a better understanding of what Missourians have been buying over the years, here is a description of some of the major bond issues:

-- Water Pollution Control Bonds: The state, upon approval of the General Assembly, issues general obligation bonds to provide funds to protect the environment through the control of water pollution. The principal and interest on these bonds are paid from moneys transferred from the General Revenue Fund to the project fund. The state began issuing these bonds in 1972; the total amount authorized by constitutional amendment is $625,000,000.

-- Board of Public Buildings: The state, with the concurrence of the General Assembly, issues revenue bonds for building projects and commits state agencies to lease space in these buildings. The total amount authorized for this fund is $229,000,000.

-- Department of Natural Resources: The DNR, again with legislative approval, issues revenue bonds, the proceeds of which are used for the acquisition or development of park facilities.

-- College Savings Bonds: The Health and Educational Facilities Authority issued $39,999,599 of these bonds, beginning Jan. 18, 1989. Revenue from the sale of these bonds is used to assist non-profit institutions of higher education as well as non-profit hospitals in construction and financing of capital projects.

-- Convention and Sports Facility Project Bond: The initial bond issue, totalling $132,910,000, provides financing for public facilities, primarily in St. Louis and Kansas City related to tourism and urban development. Projects include the St. Louis domed stadium, a part of that city's locally funded convention center, and development and improvements of Kansas City's downtown convention area.

-- Economic Development, Export and Infrastructure Bonds: At least a portion of this issue was used to purchase three office buildings, costing a total of $14,360,000, for state departments and agencies. Bonds under this authority were also issued to purchase a state laboratory facility.

-- Department of Corrections Bonds: Totaling $55,225,000, these bonds were used to construct the Southeast Missouri Correctional Facility at Potosi.

-- Highway and Transportation Bonds: This issue, in the amount of $6,560,000, represents the state's investment in the agency's Logo Sign Project, with the debt to be reduced by annual payments by participating business firms.

-- Acute Care Psychiatric Hospital Bonds: An issue totaling $22,250,000 provides funding for construction of an acute care psychiatric hospital in St. Louis. These bonds were issued last March.