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Mo. governor proposes loans to state from universities' reserves

The loans could help the schools avoid deep budget cuts after next July 1.

December 16, 2011|by Emily Wood, KY3 News | ewood@ky3.com

SPRINGFIELD, Mo. -- Show-Me State leaders are looking for ways to close a looming budget gap in the 2012-13 fiscal year.  Gov. Jay Nixon wants the state's five largest public universities to tap into their reserves to provide the state with loans totaling more than $100 million.  That total would include more than $13 million from Missouri State University.

Linda Luebbering, the governor's budget director, says revenue growth will not make up for the loss of $750 million of one-time funding sources in the current budget, including federal stimulus money. 

"Frankly, we're open to any ideas that would help us get over the hump in dealing with the cut," said MSU Interim President Clif Smart.

Under Nixon's plan, the state government would tap into the reserves of the five state schools to help fill the budget hole.  That would mean borrowing a total of $106 million, including $13.7 million from Missouri State University and $62.3 million from the University of Missouri.

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Several state lawmakers are concerned about the proposal.  One calls it ridiculous.  Some parents of MSU students also question the idea.

"I think they should spend within their own limitations.  They need to budget better," said Richard Smither, the fther of an MSU graduate.

Smart says allowing the state to tap into those reserves may be the only way to avoid deep cuts in Missouri's expenditures for higher education in the next fiscal year.

"There's a risk it doesn't come back," said Smart.  "But if they cut us by $10 million this year, and every year going forward, we know that money's not coming back -- it's gone."

As of Friday, Smart said MSU had not received a formal proposal regarding the idea from the governor's office.
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The Associated Press contributed to this report.

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