Missouri Gov. Jay Nixon announced Tuesday that he has amended his proposed 2013 budget to add $40 million in funding for the state’s public colleges and universities.
The money would come from Missouri’s share of an expected legal settlement by states’ attorneys general with the nation’s five largest mortgage banks stemming from a federal probe of “robo-signing” — the banks’ widespread practice of rubber-stamping some of the paperwork involved in foreclosures.
Missouri is expected to receive $140 million from the settlement, according to Attorney General Chris Koster, who announced his preliminary support of the agreement Tuesday. Of that amount, $100 million would be used to help Missouri homeowners.
In his initial budget proposal, Nixon cut $106 million from higher education, a roughly 12.5 percent reduction from the previous year’s budget. Of that, $89 million came from four-year institutions and $16.9 million from community and technical colleges.
Nixon, a Democrat, said he plans to meet with the presidents and chancellors of Missouri’s two- and four-year institutions in his office on Thursday to brief them on these developments and the amendment to his recommended budget.
Republicans lawmakers were highly critical of the governor’s proposed cuts, with Senate Appropriations Chairman Kurt Schaefer, a Columbia Republican, calling them “unacceptable.”
University officials warned of tuition increases, course reductions and employee furloughs if the cuts became a reality, pointing out that the cuts would reduce state aid for higher education to its lowest level since 1997.
Consumer advocates and several state attorneys general, including those in Delaware, California and New York, have criticized the terms of the mortgage settlement, arguing that they are too lenient to banks.
But Koster, a Democrat, said negotiations continue to move in a positive direction and he hopes a settlement will be finalized soon.
“My intention is to settle this portion of the state’s case against the banks, returning more than a hundred million dollars directly to mortgage holders in our state and adding tens of millions of dollars to the state’s general revenue fund in these difficult economic times,” Koster said in a statement.