Bonding legislation

Missouri's universities and colleges may soon find it more difficult to borrow funds. State Sen. Jason Crowell, R-Cape Girardeau, has introduced legislation that would tighten restrictions on state educational institutions, a move that is not popular with some in higher education.

The legislation, Senate Bill 200, would prevent state educational institutions from issuing bonds or incurring debt unless approval is granted by the Missouri Higher Education Loan Authority. The bill would also prevent the Missouri Development Finance Board, Missouri Health and Educational Facilities Authority, Missouri Housing Development Commission and the Environmental Improvement and Energy Resources Authority from issuing loans to state educational institutions.

Criteria to be met for MOHELA to approve the issuance of bonds or other debt for the payment of revenue bonds centers around four components: 1) The institution's credit rating; 2) The institution's ability to raise tuition and fees for the payment of bonds or repayment of a loan; 3) The institution's implementation of the tuition or fee increase, or other revenue stream, to cover the debt; and 4) The institution's ability to cover the debt without planning on state funding not previously granted.

The authority may approve the issuance should an independent credit rating service determine the institution has ample funds from existing tuition, fees and other revenue to cover the debt.

This legislation comes as Southeast Missouri State University moves forward on a $59 million bond issuance to cover campus renovations.

Southeast president Ken Dobbins says that the latest bond issuance would comply with the conditions in Crowell's legislation. Nevertheless, some within the university believe this bill could hamper future capital projects.

While's Crowell's concern over bonding is understandable, it does bring up a fundamental question: Should there be local control in education? The legislation put forward by Crowell, though admirable in principle, could lead to less local control and more headaches for higher education institutions.