MOHELA bill approved despite analyst's concerns; Blunt gets top priority on wishlist

Gov. Matt Blunt's proposal to sell off assets from the state's nonprofit student loan agency, MOHELA, finally received a stamp of approval from the General Assembly 17 months and two legislative sessions after the original announcement.

In 2006, Blunt announced the Lewis and Clark Initiative at the University of Missouri and immediately following the announcement, Blunt's Administration went on the defensive. Critics, including FiredUp Missouri, Democrats and a former MOHELA president, suggested the proposal would increase the billions earned by loan giant Sallie Mae each year and would hurt students. Blunt immediately responded by ensuring Missourians that the plan would not hurt Missouri students.

In defense of the proposal, Blunt had Liscarnan Solutions, Inc. perform what his office called an independent analysis, although there is a possibility the firm linked to Republican donors stands to gain from Blunt's proposal (including over $200,000 for performing this analysis).

In 2007, a leaked internal email from Liscarnan indicated the lead analyst had altered his original support of the plan in light of expected changes in federal student loan interest rates and recommended that the state immediately halt on selling assets. This report led several prominent supporters of the plan to announce their opposition, including House Minority Leader Jeff Harris.

"Based on the fact that MOHELA's own advisers believe this plan could jeopardize MOHELA's ability to continue to provide low-interest loans to students, I can no longer support the sale of MOHELA assets to fund this Initiative," Harris said at the time in a letter to Blunt. "The expert witness on whom you have based your case - an expert, moreover, whose independence has been questioned - now agrees with the other side. As an attorney, I can tell you that when your expert witness changes its opinion, you pay attention."

Not long after Harris voiced his opposition the bill hit another snag - stem cell funding opposed by Missouri Right to Life. Republican legislators, such as Sen. Matt Bartle, opposed the bill that would create stem cell research facilities. In response, state Republicans redrafted the proposal and altered the capital projects to appease Senate Republicans - the life science research programs were completely removed from the bill.

The bill then hit yet another snag: the revised projects reduced funding for the University of Missouri by $60 million and led to a filibuster from Sen. Chuck Graham. The filibuster was cut off by Senate Republicans with a rarely used parliamentary procedure, although increasingly less rare since Republicans gained control of the Senate, to shut off debate. In an ironic twist, the bill in its current form grants virtually no funds to the University of Missouri despite that being the location Blunt made his original announcement.

The Kansas City Star now calls the entire proposal "worthless" in the absence of life science research funding. Despite strong reservations of the revised proposal from Blunt's independent analysis firm and most Democrats, the Lewis and Clark Initiative was approved by the Senate in a form that did not even remotely resemble Blunt's initial proposal.

A new string of concerns were raised earlier this week, just before the House considered the bill, due to a provision that now limits tuition increases in the state's higher education institutions to the rate of inflation. An analysis from the University of Missouri calls the tuition caps "devastating" to the institution's future financial security.

"If the University of Missouri tuition had had a CPI cap during the years since state support was reduced, it would have had an estimated $300 million less in tuition revenue at a time when the cumulative reductions in state support were $255 million," the analysis said.

The report was largely ignored by House Republicans and Blunt as the bill received final approval from the House by a vote of 91-64.

"The conservative, fiscally responsible way to approach this is to reject this proposal to sell student loan assets," Harris said in opposition to the proposal during the House's floor debate. "If we make the decision to sell student loan assets, we will rue that decision because we will breaching our [fiduciary] duty and jeopardizing the ability of Missouri students in generations to come to have access to a higher education in the state of Missouri."

The MOHELA bill now awaits Blunt's signature.

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KC Star: MOHELA plan approved
CDT: MOHELA plan passes final legislative test
AP: House sends MOHELA bill to Blunt
Columbia Missourian: MOHELA sale gets approval from House
St. Joseph News-Press: Missouri House passes MOHELA legislation
KMOX: Missouri House approves MOHELA sale
CDT Politics Blog: This is the End; Robb votes against MOHELA
Post-Dispatch: Blunt gets wish on loan assets sale
MissouriNet: House delivers major victory to Gov. Blunt
CDT Politics Blog: No surprise: Blunt pleased with MOHELA plan's passage
MissouriNet: Governor applauds General Assembly for passing MOHELA bill
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KY3 Political Notebook: MOHELA clears House, but is it over?
MPN: Mizzou calls tuition cap 'devastating'
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