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A new budget proposal from Kansas legislators could force the University of Kansas to raise private funds to pay off construction bonds issued out-of-state

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TOPEKA, Kansas — The University of Kansas could be forced to raise private funds to help pay off $327 million in bonds for construction projects under a measure a state Senate committee added Monday to budget legislation.

The Senate Ways and Means Committee's approval of the measure represented the second time in less than a week that Republican lawmakers have shown their displeasure with the university's unusual arrangement for financing major campus projects with outside, not state, bonds. The House Appropriations Committee approved a measure last week that would restrict the university's spending.

The university formed a nonprofit corporation, which then had the bonds issued last month through Wisconsin's Public Finance Authority, avoiding the need for Kansas legislators to approve the debt. The bonds will finance new science buildings, student housing and other facilities known collectively as the central district project.

The new measure would prohibit the university from using state funds or dollars from tuition or student fees to pay off the bonds for two years, starting July 1. The nonprofit corporation would make the bond payments, but the university plans to lease the new buildings from the nonprofit.

"It's unfortunate that the University of Kansas went ahead," said Sen. Tom Arpke, a Salina Republican who proposed the restriction. "We didn't have oversight or review."

The committee's voice-vote approval added the proposal to a bill that would eliminate a projected deficit of nearly $200 million in the state's $16.1 billion budget for the fiscal year beginning July 1. The panel then approved the entire bill on a 9-2 vote, sending it to the Senate for debate, possibly before the end of this week.

The House expects to debate a budget-balancing plan this week, which includes a provision that would require the university to get the Legislature's permission to spend tuition dollars or special fees collected in excess of budget projections.

Both the House committee and the Senate panel planned to have hearings Tuesday on the university's central district project.

PHOTO: Kansas state Sen. Tom Arpke, R-Salina, answers questions from reporters about his proposal restricting how the University of Kansas can pay off $327 million in bonds issued out of state for construction projects, Monday, Feb. 8, 2016, at the Statehouse in Topeka, Kan. Arpke is upset that the university had the bonds issued without legislative approval. (AP Photo/John Hanna)
Kansas state Sen. Tom Arpke, R-Salina, answers questions from reporters about his proposal restricting how the University of Kansas can pay off $327 million in bonds issued out of state for construction projects, Monday, Feb. 8, 2016, at the Statehouse in Topeka, Kan. Arpke is upset that the university had the bonds issued without legislative approval. (AP Photo/John Hanna)

The university has said it was being innovative with the financing and complied with Kansas law. Last week, the school's vice chancellor for public affairs, Tim Caboni, issued a statement decrying the House committee's action and saying it would signal that Kansas is not receptive "to business and development."

Caboni's response by email to the Senate committee's proposal was more muted: "We know that legislators have questions about the central district project and we look forward to answering them."

But Sen. Laura Kelly, of Topeka, the panel's ranking Democrat, called the measure "a continuing attack on our flagship university."

"It doesn't do our state any good in terms of our reputation and our ability to recruit and retain high-quality folks," Kelly said.

The Senate committee's budget-balancing plan includes many of Republican Gov. Sam Brownback's proposals to help close the budget gap by juggling funds and capturing unanticipated savings. But the committee also found an additional $32 million in savings in a program that provides death and disability benefits to the families of state workers.

The Senate panel also added an additional $2.4 million to the current budget of Osawatomie State Hospital to help boost its staffing. The federal government decertified the hospital in December after a critical survey found that the hospital failed to protect suicidal patients, adequately supervise care or perform required safety checks. The survey included a report that an employee was raped in October.


Online:

Kansas Legislature: http://www.kslegislature.org


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