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Nixon visits Fulton to promote bonding plan

Nixon visits Fulton to promote bonding plan

January 23rd, 2014 in News

Gov. Jay Nixon

After asking Missouri lawmakers Tuesday night to approve a $198 million bond sale to pay for a new Fulton State Hospital, Gov. Jay Nixon will visit Fulton's City Hall this morning to discuss his proposal.

The Fulton hospital began operating in 1851.

During his State of the State address Tuesday, Nixon noted the hospital is "Missouri's only maximum security psychiatric facility - a facility that is crumbling and in desperate need of replacement. It's inadequate to the needs of patients.

"It's dangerous for the staff who care for them. And it's an embarrassment to our state."

Nixon's budget proposes using "appropriations-backed bonds" to raise the money to build the hospital.

But some Columbia-based lawmakers question the constitutionality of that idea.

Senate Appropriations Chairman Kurt Schaefer, R-Columbia, on Wednesday called the bonding plan "extremely troublesome" because it wouldn't go to a vote of the people.

Veteran state Rep. Chris Kelly, D-Columbia - who once headed the House Budget Committee - has been making the same argument since Nixon first proposed the bonding idea late last year.

"I believe that to be unconstitutional. I don't think we can go into debt," he told reporters Tuesday night.

With some exceptions that don't apply to a nearly $200 million project, the state Constitution says: "The general assembly shall have no power to contract or authorize the contracting of any liability of the state, or to issue bonds therefor, except ... the general assembly as on constitutional amendments, or the people by the initiative, may also submit a measure (to a statewide vote) containing the amount, purpose and terms of the liability."

But state Budget Director Linda Luebbering told reporters Tuesday the Fulton hospital plan didn't need a statewide vote, "because they are appropriations-backed debt. They do not have the full faith and credit of Missouri taxpayers.

"So, repaying those bonds is contingent on our having an appropriation to pay them."

Luebbering said Missouri government has used that approach "many, many times before," and the Legislature always has paid the annual debt even though it isn't required to.

"It won't impact our credit rating," she said. "We are a very low-debt state. Very low.

"This will be a tiny increase - and all the rating agencies have no problem at all with appropriations-backed debt. We still get very good interest rates."

The current state budget already includes $13 million to plan the new hospital - but lawmakers still must agree on a way to pay for it.

Nixon will visit the Fulton City Hall at 10 a.m. today.

Information from The Associated Press was used in this story.