Legislative efforts underway to curb revenue sources for Missouri schools
Members of the state senate are planning to curb revenue sources for UMKC and other Missouri colleges and universities.
Sunday marked the would-be effective date for Senate bill 200, proscribing a state educational institution from issuing revenue bonds or incurring debt for the payment of revenue bonds from any source.
Though the bill was previously tabled and is not yet law, it proves the effort is underway to decrease potential sources of leverage for colleges and universities.
Revenue for UMKC – and the entire UM system – predominately derives from three sources: operations, auxiliary enterprises, and grants and contracts.
Consisting mostly of tuition fees and state appropriations, operations account for more than 70 percent of UMKC’s revenue.
In recent years, income streams for colleges and universities have been progressively sluggish; the introduction of SB 200 and fears of a double-dip recession suggest the trend will likely continue.
The state’s 2011 fiscal year budget request for four-year colleges and universities decreased 4 percent from the previous year, and Democratic Governor Jay Nixon’s recommendation was twice as much.
Nationally, the federal administration is expected to freeze relief to public universities, after a vote earlier this month that raised the federal debt ceiling and subsequent Congressional support for a balanced budget amendment to the U.S. Constitution.
Bonds are traditionally a way to subsidize lost income sources for investment and debt repayment.
SB 200 explicitly states: “The Authority may only approve the issuance of revenue bonds … when the following conditions are met: the authority has evaluated the ability of the institution to increase tuition and fees and finds no impediment for the payment of bonds or repayment of the loan,” or “the institution has already put in place a tuition or fee increase.”
The bill would legally bind debt financing to tuition fees.
Earlier this year, the Board of Curators approved a 5 percent tuition increase at UMKC, beginning in the summer semester ‘11.
The increase highlights constraints and shortfalls within the finance department.
“This tuition proposal is well beyond the increase in the cost of living allowed by statute,” Governor Nixon acknowledged. “Universities should look first at achieving every efficiency in their operations before taking this type of action that affects families’ ability to pay for higher education.”
Currently, tuition fees remain one lasting option for administrators to repair budget gaps and fund special projects.
A few projects, part of UMKC’s Master Plan at masterplan.umkc.edu, label “debt’’ as a source of funding, including a new Miller Nichols Library parking structure, Interactive Learning Center Addition, and Conservatory of Music and Dance.
The Board of Curators also met recently at the Hyatt in downtown Kansas City to discuss the approval of debt financing for a Student Success Center in the University Center.
Many loans already come from state organizations, such as the Missouri Development Finance Board, Missouri Health and Educational Facilities Authority, Missouri Housing Development Commission and the Environmental Improvement and Energy Resources Authority, which SB 200 seeks to forbid.
Senator Jason Crowell (R), sponsor of the bill, was not available for comment, as the Senate is adjourned for recess.