CHICAGO - Legislation that authorizes up to $600 million in revenue-backed borrowing for public university and state buildings in Missouri is headed to the House after Senate passage.
The plan approved in a 25-to-6 vote increased the existing cap on State Board of Public Buildings issuance by $400 million to $1.175 billion.
"Bonds that may be issued due to the increase in the cap may only be used for renovation or repair of existing buildings or facilities, except that bonds may be issued for the construction of a new mental health facility in Callaway County," Senate Bill 723 says.
The new 300-bed maximum and intermediate security psychiatric facility would replace the aging Fulton State Hospital.
The legislation also raises the cap on the board's issuance for projects at the state's public universities by $200 million to $375 million. "Bonds that may be issued due to the increase in the cap may only be used for renovation or repair of existing buildings or facilities," the legislation reads.
The Republican majority approved the plan despite concerns raised by some members over the debt burden. The Legislature has discussed legislation that would allow new borrowing for buildings, universities, and transportation over the last year but failed to act on various bills that would authorize it.
Representatives from both parties who support new borrowing have said the time is ripe given the state's healthy finances, low interest rates, and triple-A credit ratings.
Nixon proposed in his fiscal 2015 budget announcement in January $200 million in appropriation-backed bonds to fund construction of the replacement psychiatric facility. The plan called for issuing 25-year bonds.
"Interest rates are low. Our credit rating is high. And the need is undeniable. Friends, let's roll up our sleeves, work together, and for the safety of all our communities, get it done this year," Nixon told lawmakers.
A measure recently passed a Missouri House committee allowing appropriation backed borrowing that would be repaid in five years. The sponsors say it is more palatable to Nixon's proposal because it would save $120 million in interest.
The Senate also in recent days passed a $620 million income tax cut with only Republican support, sending it to the House which has considered its own legislation authorizing an income tax cut. Gov. Jay Nixon called the measure "reckless" in a statement. Lawmakers last year approved an income tax cut, but Nixon, a Democrat, vetoed it warning of the impact on the state's budget and credit rating. Lawmakers did not attempt an override.