Budget subcommittee chair to recommend delay in basing college, university funding on performance

The Chair of the House subcommittee that deals with education funding says he will recommend the legislature put off a performance-based funding mechanism for state-supported colleges and universities.

University of Missouri System President Mun Choi testifies to the House Appropriations Subcommittee on Education on January 31, 2018. (photo; Tim Bommel, Missouri House Communications)

Cedarcreek Republican Lyle Rowland’s subcommittee heard from those institutions’ presidents over the course of two days and said many of them wanted the same things:  a delay in implementation of that plan, and a restoration of their core funding.

The state budget proposed last month by Governor Eric Greitens (R) would cut higher education funding by 10-percent, or roughly $100-million, from its Fiscal Year 2018 level.  Also in early January, the Coordinating Board for Higher Education approved linking 10-percent of funding for publicly-backed colleges and universities to performance factors such as students’ job placement, degree completion, and budgetary practices.  The model would look back at institutions’ performance over the past three years.

The combination means it is possible, though unlikely, that any given institution could see a decrease of as much as 20-percent in year-to-year state support.

Rowland said he agrees with the institution presidents who told him implementing performance-based funding now puts them at a disadvantage.

“[Institutions] didn’t know what their standards were going to be.  They didn’t know how to change their operation of their colleges and universities to help meet those goals,” said Rowland.  “With them not knowing what standards were, what those areas of concern are going to be, they have no way of implementing it, so it was going to hurt them financially.  We don’t want to hurt them financially.”

He wants to postpone that plan for three years so that institutions will know what areas to work on before their support is tied to them.

“We want to give them the opportunity to build up before we start with the funding model and then let’s put x-amount of new dollars into performance funding then and if you’re not meeting it you’re not going to get all of that funding.  We’re going to redistribute that to the other schools and universities.”

Rowland’s panel on Wednesday heard from University of Missouri System President Mun Choi, who touted to lawmakers the system’s accomplishments but coupled that with words of caution.

He said 90-percent of Mizzou’s students found a job within six months or moved on to graduate school; research is yielding advancements in the agriculture and medical fields; and Missouri S&T last summer beat out other universities from around the world in a competition to design a Mars rover.

“Those kinds of stories are peppered throughout all of our campuses but our ability to continue these programs is in jeopardy because of the cuts that we’ve experienced,” said Choi.

Lincoln University Interim President Michael Middleton echoed Choi’s call for a restoration of core funding and a delay in the performance model.

Representative Lyle Rowland (photo; Tim Bommel, Missouri House Communications)

“We are about as lean as we can be.  We’re already seeing that giving multiple responsibilities to individuals affects our productivity, which I believe is reflected in the number of students we’re able to recruit and retain,” said Middleton.  “With this [proposed] additional wave of cuts we are in a perfect storm with no clear break in the clouds.”

As for the proposed cut to core funding, Rowland said the governor’s proposal is not likely to stand, but given the state’s overall economic picture some reduction is probable.

“I’m sure there will be some cuts.  What we’re trying to do is try to make it as little as possible,” said Rowland.  “We’re hoping to be able to locate some things [elsewhere in the state budget] that we might be able to transfer into higher ed.”

The ranking Democrat on the House Budget Committee, Kip Kendrick (Columbia), has been one of several lawmakers expressing concern about the timing of performance-based funding.  He thinks most legislators will agree it should be pushed back.

“Higher education institutions across the board were on the same message about this, whether they were going to receive an additional hit from the performance funding model or not,” said Kendrick.  “Everybody was very tepid in having that implemented in a year where there is a potential for up to 10-percent of additional cuts to higher education.  We can’t penalize institutions on top of the additional cuts that they’re receiving this year.  It’s way too punitive and not the right year to implement it.”

Rowland will submit his recommendation to the full budget committee.  That committee will develop its own state budget proposal to be considered by the full House.  Eventually the House and Senate will have to agree on a state spending plan to be sent to the governor.

House budget reject Greitens’ administration plan to expedite tax refund payments

House budget leaders are rejecting Governor Eric Greitens’ (R) plan to use a line of credit to help pay for getting tax refunds out to Missourians.

House Budget Committee Chairman Scott Fitzpatrick (left) and the committee’s ranking Democrat, Representative Kip Kendrick (photos; Tim Bommel, Missouri House Communications)

Under the administration’s plan the state would seek a line of credit of up to $250-million.  That would be used to help the state get refunds out faster and would be paid off by the time the fiscal year ends at the end of June.  The loan would have come from MoHEFA, the Missouri health and Educational Facilities Authority, which typically helps finance buildings projects for colleges and universities.

House Budget Committee Chairman Scott Fitzpatrick (R-Shell Knob) considered the idea since it was first presented to him, but has since cooled on it.

“I personally didn’t love it at first, the first time I heard it, and the more I thought about it the more it wasn’t something I thought we should do, so the House is not going to do it,” said Fitzpatrick.

Both Fitzpatrick and the top Democrat on the budget committee, Representative Kip Kendrick (D-Columbia), also question the constitutionality of that plan.

“One of my biggest concerns about the whole thing is we have a process in place already to make sure we can pay refunds.  The idea that we can pull from MoHEFA, and the explanation that taking this $250-million line of credit is the same thing as providing funding for Mizzou Arena – that’s a false equivalency.  It’s not.  The “F” in MoHEFA stands for facilities,” said Kendrick.

“The nature by which they wanted to do it was to use a quasi-governmental agency to borrow off budget and then use state appropriations to pay off through that quasi-governmental entity those loans,” Fitzpatrick said.  “It was creative but it isn’t something that I feel real comfortable with on the constitutionality issue.”

Senate leaders have also reportedly rejected the loan idea.

Asked whether the legislature needs to reevaluate how refunds are disbursed in order get them out faster, and with the state paying less interest on delayed refunds, Fitzpatrick said let’s wait and see.

“Like two years ago we had a 15-percent year-over-year increase in refund expenditures.  It went up like $200-million in one year and … we didn’t anticipate that.  When you have something like that – that kind of growth in refunds – it can create some cash flow problems, especially right at the end of the fiscal year,” said Fitzpatrick.  “If we have a good year of growth and we can get our General Revenue Fund cash balance in a better situation, and we don’t have an explosion in refunds … I think we ought to be able to get ourselves in a better situation where we’re paying refunds in a timely fashion.”

The House Budget Committee this week began going over Greitens’ budget proposal.  Over the coming months the House and Senate will craft a legislative spending plan that will be sent to Greitens before the end of the session in May.

House budget leaders discuss Greitens’ plan to cut college, university funding

After legislators began going through Governor Eric Greitens’ (R) budget proposal many began expressing concern over his proposal to cut money from Missouri’s colleges and universities.

Representatives Kip Kendrick and Scott Fitzpatrick (photo; Tim Bommel, Missouri House Communications)

The Governor proposed a 7.7-percent reduction to higher education.  Coupled with money frozen in the state budget that took effect July 1, 2017, that would be a 10-percent cut overall.

House Budget Committee Chairman Scott Fitzpatrick (R-Shell Knob) said that would amount to a reduction of about $68-million.  Higher education funding is also shifting to being based on performance, which could mean additional decreases for some institutions.

“I haven’t heard any rumblings from any institutions about, ‘If this happens, we’re closing,’ but I don’t think it’s outside the realm of possibility,” said Fitzpatrick.  “I don’t anticipate that all of those reductions will stand in the budget.  I think that we’ll probably try to recover some of that, but I think that the institutions – some more than others – are going to have a difficult time with it.”

Fitzpatrick and the budget committee are just beginning the process that over the next couple of months will see countless changes made to the governor’s budget proposal to morph it into the legislature’s own state spending plan.  He is sure efforts will be made along the way to restore at least some higher education funding.

“It’ll depend on what things we find in the budget that we think we can reduce or any other revenue source that we’re not currently considering that could become available through the process, which usually happens in some way shape or form,” said Fitzpatrick.

Legislators in both parties and in both chambers are expressing intent to propose more funding to colleges and universities than the governor proposed, so it seems likely the 10-percent reduction will not stand.  Still the leading Democrat on the House Budget Committee, Representative Kip Kendrick (Columbia), said he’s alarmed at the governor’s proposal.

“This is a time when we’re at full employment.  That’s what scares me the most is the economy’s doing well, yet we’re seeing such tremendous cuts to public higher education across the State of Missouri.  I’m very concerned about what it’s going to mean for our state,” said Kendrick.  “I think that this is a very concerning trend that we’ve been seeing … what happens in the next [economic] downturn?  What’s that going to mean for higher education at that time?”

As for other provisions in the governor’s plan, neither Fitzpatrick nor Kendrick are supportive of a plan to take out a line of credit to pay for the state to get tax refunds out to Missourians faster.  Both also want to retain or improve on the governor’s proposal to increase pay by $650 to state employees making less than $50,000 a year, but say only time will tell what form any state employee pay hike could take.

Missouri House asked to consider multiple ethics reforms

House lawmakers continue to lay out a slate of proposed ethics reforms they believe would help restore the public’s trust in Missouri’s elected officials.

Representative Kip Kendrick (photo; Tim Bommel, Missouri House Communications)
Representative Kip Kendrick (photo; Tim Bommel, Missouri House Communications)

Columbia Democrat Kip Kendrick presented to the House Committee on General Laws, House Bill 217, an omnibus bill encompassing a series of measures offered by other members of his caucus.  He said each proposed reform is based on promises made by candidates during the recent campaign cycle – promises that he says were endorsed by voters based on which candidates made those promises and won.

“There is the appearance, obviously, of corruption. There’s a lack of trust – I believe that we all see it – a lack of trust that the people have in how the processes unfold here at the State Capitol, at the federal level as well,” said Kendrick.  “The bill before you, make a strong argument that it’s an aggressive and comprehensive anti-corruption, reform bill.”

Two key provisions would build on work already done by the House toward ethics reform that House Democrats say they want to take farther than earlier proposals.  One aims to ban gifts and monetary donations from lobbyists to elected officials.

Kirkwood Democrat Deb Lavender is carrying the Democrats’ version of a proposed gift ban, House Bill 212.  She told lawmakers her bill would be tougher than House Bill 60, passed two weeks ago by the House.

Kirkwood Democrat Deb Lavender is carrying the Democrats’ version of a proposed gift ban, House Bill 212.  She told lawmakers under House Bill 60, passed two weeks ago by the House, organizations could exploit a provision that lets them provide meals for legislators at events as long as all members of the General Assembly and all state lawmakers are invited.

      “I have been invited to a Bar Association Dinner in Kansas City.  I’ve now been invited to one in Jefferson City and I’ve been invited to one in St. Louis.  A year ago I was invited to the one in St. Louis,” said Lavender.  “So as the entire General Assembly has now been invited to all three events, and perhaps more, here is how the Missouri Bar Association is already working around a bill that has passed on our floor; how they can still take you out and buy a meal and report it to the General Assembly so there’s no individual accountability.”

The other provision proposes extending the prohibition on elected or appointed officials or legislators becoming lobbyists from six months to five years after their term has ended, and would apply that to certain legislative staff.  It is also found in House Bill 213, sponsored by Representative Joe Adams (D-University City).

“This is what [Governor Eric Greitens] suggested in his campaign as he was running for the office, head of the state, so basically using his words,” said Adams.

Other provisions in HB 217 propose prohibiting any candidates’ committees from transferring their funds to their candidate’s family members; requiring former candidates to dissolve their candidate committees; and letting the Missouri Ethics Commission prosecute criminal cases and initiate civil cases if the state Attorney General declines to pursue either regarding an alleged ethics violation.  Those provisions are found in House Bill 214 (Tracy McCreery), House Bill 215 (Mark Ellebracht), House Bill 216 (Crystal Quade), respectively.

Representative Shamed Dogan (photo; Tim Bommel, Missouri House Communications)
Representative Shamed Dogan (photo; Tim Bommel, Missouri House Communications)

Republicans have their own proposals to further reform Missouri ethics laws.  Ballwin Representative Shamed Dogan wants to ban gifts from lobbyists to local government officials.

Dogan said such officials are held to a much lower standard than legislators.

“I was an alderman in my city before being elected to this position, and we had a trash contract that was before our city.  I subsequently found out, after we’d passed this trash contract on a no-bid basis, that our City Administrator had been lobbied by that trash company by taking him to game seven of the World Series in 2011,” said Dogan of his proposal, House Bill 229.

Republican Tom Hurst (Meta) presented House Bill 150, which would exempt individuals not paid to lobby from having to register or report as a lobbyist.

Hurst said he wants members of the public to know that they can talk to elected officials about issues that concern them without having to file as a lobbyist, and without fear of being prosecuted for failing to file.

“The gray area tends to make people that I talk to wary about what they think happens in this Capitol and what they can do, legally, without getting in any trouble,” said Hurst.

Republican Jean Evans said the bill could raise more issues.

“So what’s to keep someone who’s not registered as a lobbyist, who’s not paid, from, say, giving lavish gifts to a legislator that’s not being reported in order to affect some sort of change in legislation or in order to, say, perhaps influence a decision on procurement whether it’s at the state or local level?” asked Evans.

The committee has not voted on any of those bills.

House Speaker Todd Richardson (R-Poplar Bluff) and other legislative leaders have said ethics reforms would continue to be a priority in the 2017 session.