JEFFERSON CITY | Trumpeting historically low interest rates and possible federal assistance, Missouri Gov. Jay Nixon on Wednesday urged lawmakers to consider a new bond to fund infrastructure projects in the state.
Nixon did not suggest what projects might be funded with the bond or how much it would cost in a letter sent to each of the state's senators and representatives. But he did describe the state's needs as great, and emphasized the opportunity afforded by the recession and the federal response to it.
"Today’s troubled economy presents the best time for Missouri to be making such investments — and the worst time to turn our back on the future," he wrote.
Nixon, a Democrat, called on lawmakers from both parties to work with him in the coming months to set priorities for infrastructure projects and to find a way to finance them without a tax increase.
A bond — in which the state would borrow money and pay it back over time — could be secured on unusually favorable terms, Nixon wrote. Interest rates are low because of the recession and Missouri, with its favorable credit rating, is well-positioned to lock in a low rate.
On top of that, the federal Build American Bond program could cut investment costs by an additional 35 percent.
If lawmakers did pass a new bond, voters would have to approve it as well.
Nixon's letter emphasized that the state would have to move quickly to obtain the favorable financing, although a spokesman later said the governor would not press for action until a consensus had emerged from lawmakers.
The legislature adjourned last month and won't reconvene until January.
Spokesman Jack Cardetti also declined to say what specific projects the governor had in mind. "Clearly we have capital needs out there to move the state forward," he said.
Reached for comment Wednesday afternoon, Senate Leader Charlie Shields, a St. Joseph Republican, agreed that circumstances were favorable for the state to take on additional debt. But, he cautioned, there are still questions to be answered.
"Can you pay the debt service? If you build new things, can you maintain them?" Shields asked. "It may be a great opportunity, but at this point, the House and the Senate need to explore that and look very closely at what the structure and debt service and project interest rate might be."
As for specific projects, Shields suggested the state might look at upgrading roads and bridges, replacing leased office space with state-owned buildings or improving the state hospital in Fulton.
A proposed $700 million bond for building on college campuses passed the House but died in the Senate earlier this year.