Missouri governor pitches bonds for bridges
The Missouri Highways and Transportation Commission would issue $350 million of state-supported bonds for bridge work under a proposal from Gov. Mike Parson.
“My administration is focused on making significant investments in workforce development and infrastructure, reforming and restructuring government responsibilities, and saving for the future,” Parson said in his State of the State speech, during which he announced the borrowing and his fiscal 2020 budget plan.
The new borrowing would involve both the Office of Administration and the Missouri Highways and Transportation Commission, said state debt manager Stacy Neal. The bonds would be secured by a general revenue fund transfer and the resources of the state road fund.
The state and commission are rare borrowers. The commission has exhausted most of its capacity based on its current revenue streams and is focusing primarily on maintenance work amid a lack of revenue.
The commission and Parsons had been hoping for an infusion of new revenue from a gasoline tax hike on the November ballot. Voters, however, rejected Proposition D, which had asked if the state should raise the gas tax to fund long-stalled road and bridge projects.
An $825 million annual shortfall in funds exists and officials warn it’s now a safety issue.
The 10-cent-per-gallon hike would have been phased in over four years, generating $123 million annually for cities and counties and $288 million for the state. The gas tax has stood at 17 cents per gallon for more than two decades.
The commission has not sold bonds since 2014. Its senior lien road fund bonds carry triple-A ratings and its federal reimbursement road bonds carry ratings in the double-A category. The state carries triple-A ratings.
Missouri has 10,385 bridges, the sixth most in the nation, and more than 900 are in poor condition while 1,194 are weight restricted with 450 falling into both categories, according to the Missouri Department of Transportation.
“The plan will ask the legislature to consider a concurrent resolution that directs MoDOT and the Office of Administration to enter a financing agreement to fund 250 bridge projects — bridges that are already programmed for repair or replacement in the current Statewide Transportation Improvement Program,” MoDOT said.
The proposal is set up to supplement existing transportation revenue with general revenue to pay off the debt. The resolution also calls for the bond proceeds to be deposited into the state road fund which restricts the use of funds solely for state road and bridge projects.
Parson released an all-funds $29.8 billion budget for fiscal 2020 which begins July 1. It includes a $10.1 billion general revenue fund.
It would provide $5 million to expand high-speed broadband internet access and raises by $50 million funding for a transportation cost share program to assist cities and counties with addressing their “most serious infrastructure needs.”
The budget would eliminate 450 positions although no layoffs are expected. It projects an ending balance of $120 million. Kindergarten through 12th grade education would receive a $60 million funding boost while higher education would be held steady. State employees would get a 3% raise at a cost of $30 million.
Net general revenue collections rose by 5% last year and are projected to rise 1.7% this year based on the expectation of “modest revenue growth” over the next 18 months. The next budget is based on a projected 2% revenue growth rate, according to budget documents.
“Continued employment increases, strong wage growth, and spending growth will help boost general revenue collections in fiscal year 2020,” budget documents say.
The Republican governor's budget proposals will be weighed by a GOP-dominated legislature.
The budget is the first proposed by Parson although he signed fiscal 2019 budget bills. He assumed the governor’s office last spring following former Gov. Eric Greitens’ resignation due to allegations of personal misconduct and campaign violations that were being investigated by legislators and criminal prosecutors. Parson was the lieutenant governor and is serving the remainder of Greitens’ term. The next election is in 2020.