MO Gov: Spare Education with Securitization

The Missouri governor says he doesn't want to make more budget cuts in education this fiscal year, but that doesn't mean Missouri schools are in the clear yet.

With a one billion dollar budget shortfall to cover by the end of the fiscal year in June, Governor Bob Holden has his work cut out for him.  The governor made a stop at Southeast Missouri State University on Tuesday afternoon to talk about the possibility of making more budget cuts there within the next few months.
Right now, Governor Holden says that’s something he won’t have to do, “if” state lawmakers will commit to a plan called “tobacco securitization.”  As he explained to the Cape Girardeau crowd on Tuesday, securitization would enable the governor to sell bonds using Missouri’s tobacco settlement money as backing. That, the governor estimates, would bring in about 350-million dollars to help salvage this year's budget.
But if lawmakers do not pass the tobacco securitization plan, Holden is warning education leaders that they're next on the hit list.  The governor says the state would be forced to cut an additional 90 to 175 million dollars from higher education budgets, and up to 260 million dollars from Missouri’s elementary and secondary schools.  That’s bad news for SEMO President Ken Dobbins.
“What that means is a ten to twenty percent additional withholding to our university, so that equates to about four to eight million dollars. We don't have four to eight million dollars for this,” says Dobbins.  “School started on Tuesday, so we can't increase fees. So if that (additional budget cut) happens, we'll probably have to go out and borrow funds.”
Dobbins points out that Southeast Missouri State University has already been forced to cut five million dollars out of this year's fifty million dollar budget. He says if the university has to cut any more funds, students will definitely feel the pinch.  “What would happen is that we would stop all purchases, and upgrades of equipment,” he explains.  “And we've already cut over two million dollars of academic equipment.”
That’s why Governor Holden says he's encouraging school leaders to put the pinch on lawmakers instead,  by pressuring them to authorize tobacco securitization  “I come to you today to ask all of you to contact your representatives and your senators,” he told Tuesday’s crowd.  “Urge them to follow through on the action they laid out last year, so we can have the money to address the 2003 budget…it’s time to quit playing politics.  Let’s start thinking about the people and the needs of this state.”
The governor also delivered the same message to a group of local elementary and secondary school superintendents later Tuesday afternoon.
The deadline for Missouri lawmakers to authorize tobacco securitization is in February.  Many Missouri education leaders say they'll be holding their breath until then.