Governor signs MOHELA bill

ST. LOUIS -- Gov. Matt Blunt signed legislation into law Wednesday financing college buildings with student loan agency money as he began a three-day tour to communities that will reap the rewards.

The legislation will take $350 million over six years from the Missouri Higher Education Loan Authority to finance dozens of building projects for public colleges and universities. It also will create a new college scholarship program for students in financial need and place limits on university tuition increases.

The bill's passage generally marked a victory for Blunt, who worked for more than a year on what supporters called one of the most comprehensive higher education reforms in Missouri history. The final result, however, will not finance life sciences research buildings, as originally envisioned by Blunt.

Critics claimed the legislation sets a bad precedent, encouraging politicians to raid student loan agency funds for favored projects at the potential expense of low-cost student loans in the future.

The Republican-led House sent the GOP governor his higher education package earlier this month on a largely party-line 91-64 vote. The Senate passed the bill 23-11 last month.

At a packed news conference at the University of Missouri-St. Louis, school officials and legislators praised Blunt for the law.

"I'm very pleased to have the opportunity to sign it, for what it will mean for our colleges and universities, but, more importantly, what it will mean for our students," Blunt said.

He said it will provide $335 million for state-of-the-art learning centers. The other $15 million in MOHELA money will go to the Missouri Technology Corp., which encourages the growth of research-based businesses.

UMSL's student government association's president, Bryan Goers, 21, said student and faculty organizations had passed resolutions seeking full funding for renovations to a science complex on campus under the law, when they learned all the money wasn't in an earlier version.

"A lot of times when these resolutions are passed, they fall on deaf ears," he said following the news conference. "This time, we got to say it, and somebody listened."

The university will receive $28.5 million, the full funding requested, to improve Benton and Stadler Halls, school officials said.

A Democratic legislator from the St. Louis suburb of Florissant, Rep. Clint Zweifel, had pledged to pursue a citizen petition referring the legislation to a statewide vote. That would have required signatures from 5 percent of the voters in six of Missouri's nine congressional districts.

But Zweifel said Wednesday he will not pursue the petition drive.

He noted a lot of money would have to be raised quickly to finance it, but said he based his decision on his need to devote more time to his other legislative priorities.

Zweifel said his opposition to the plan remains. He said term limits have set up a situation where legislators feel pressure "to bring something home" in four to six years, and he feared legislators would raid the student loan agency again down the road.

"The fact that this is going to be a political cookie jar for future legislators is pretty scary to me," he said.

The student loan authority already has sold hundreds of millions of dollars worth of loans made to non-Missourians to begin stockpiling money needed to make the state payments. Loan authority officials believe the payments can be made without affecting the lower interest rates and loan forgiveness programs it now offers to Missouri students.

In exchange for its money, MOHELA will get a 15-year pledge of tax-exempt bonding authority, which it could use to finance the acquisition of new student loans.

Blunt first proposed in January 2006 to sell the student loan agency as a way to fund a university construction plan that focused on life sciences research and high-tech industries. He then embraced an alternative put forth by MOHELA to sell some of its loans while leaving the agency intact.

But that plan failed to passed the Legislature last year. So Blunt revised it again and tried to bypass lawmakers. That failed, too, when board members for the loan authority expressed reluctance to enact the plan themselves after Democratic Attorney General Jay Nixon warned they could be sued for violating their fiduciary duties.

Nixon's warning carried weight because he had sued them once already. The student loan agency settled that case in December, acknowledging it had violated Missouri's open meetings law while working on Blunt's plan.

Taking his plan back before the Legislature this year, Blunt reshaped it again -- most notably shedding its medical research buildings in favor of agricultural projects in response to concerns that the research buildings potentially could have been used for embryonic stem-cell research.

Nixon denounced the higher education legislation Tuesday as a raid on the state's student loan authority that will make it more difficult for Missourians to afford college.

At the St. Louis news conference Wednesday, the bill's lead sponsor, Sen. Gary Nodler, R-Joplin, fired back. He said the loans sold by MOHELA were not loans to Missouri students, and that interest rates had not increased due to the sales.

"If the fight to preserve Missouri higher education were a war, Jay Nixon would be guilty of treason," Nodler said.

Blunt, when questioned about Nixon's criticisms, said they "displayed a lack of understanding about this initiative."

Nixon spokesman Scott Holste responded by telephone, saying, "Nothing in this bill signed today by Gov. Blunt is going to help Missouri families afford college."