Harris withdraws MOHELA support

By Michael Sewall

Published Feb. 23, 2007

The top House Democrat has withdrawn his support of the governor's plan to sell assets of the Missouri Higher Education Loan Authority.

In a letter to Gov. Matt Blunt, House Minority Leader Jeff Harris, D-Columbia, said he shed his support for the bill because Liscarnan Solutions LLC, the advisory firm to the MOHELA plan, said MOHELA might not be able to provide the necessary funding for the initiative.

The sale, commonly known as the Lewis and Clark Discovery Initiative, would implement the plan to use $335 million from MOHELA to fund building projects on Missouri universities.

"In a reversal of its previous opinion, Liscarnan now believes that changes in student loan proposals at the federal level may invalidate Liscarnan's modeling of MOHELA's future business activity and a related cash flow projection of MOHELA," Harris stated in the letter.

Harris said the fact that MOHELA's own advisers believe the plan could jeopardize its ability to continue to provide low-interest loans to students was the reason he could no longer support the initiative.

"As an attorney, I can tell you that when your expert witness changes its opinion, you pay attention," Harris stated in the letter.

According to Harris, the initiative rests on a "precarious" foundation if it depends upon no changes being made to federal law for the next 11 years.

"There is no guarantee that federal law will remain static over the next 11 years," he said. "That's why lawmakers meet every year."

Harris, who supported the initiative in the past, now stresses the importance of having student loans as the main purpose of MOHELA.

"Potentially, if the sale went through, MOHELA might cease to exist," Harris said.

In response to Liscarnan's cautionary statements, MOHELA Chief Financial Officer Scott Giles said everything is just a proposal at this point.

"The legislative process in Congress has numerous steps remaining with a diverse range of outcomes," Giles stated in a news release.

MOHELA Executive Director Ray Bayer informed the MOHELA board that it already has $210 million set aside for funding.

MOHELA would disburse $5.8 million quarterly installments 24 times only if it wouldn't affect its ability to provide low interest rates and loan forgiveness programs.

"I remain confident that MOHELA will be in a position to continue making the quarterly installments," Bayer said.

Harris said Blunt had not gotten back to him since he sent the letter.

Blunt spokeswoman Jessica Robinson said the governor is very enthusiastic about the progress the Lewis and Clark Discovery Initiative continues to make in the Senate.

"We remain optimistic that universities, students and the state will ultimately recognize the benefits of the initiative," Robinson said.

Robinson also addressed Harris' concern about federal law changing and potentially affecting the viability of the sale.

"If we made judgments by what federal law might be, lawmakers in Jefferson City would essentially be paralyzed," she said.

After the omnibus higher education bill, which included the MOHELA plan, passed through the Senate Education Committee without funding for six building projects, Sen. Gary Nodler, R-Joplin, introduced a substitute bill that included the building projects.

Much of the debate regarding the plan has stemmed from stem-cell research, but Harris stated in his letter that he would "not at this time discuss other concerns," which include the controversy surrounding that research.

Nodler declined to comment Thursday evening.

In a news release dated Feb. 15, UM system President Elson Floyd stated the building projects included in the plan would not be used to foster stem-cell research.

Despite ongoing debate on the Senate floor about types of research and funding for buildings, the Liscarnan warnings to MOHELA might have the largest effect on the outcome of the plan.

Although Harris withdrew his support for the plan, he urged Blunt to keep funding for buildings included if the bill passes.

"Under any alternative financing proposal, I urge you to stick with the list of buildings set forth in the original Lewis and Clark Discovery Initiative proposal," Harris stated in the letter.

Building projects at MU would include a Health Sciences Research Center and a business incubator.