Progress in 2015—Lawmakers endorse policies supporting the goals of Missouri 2030

However, much more work is left to be done

JEFFERSON CITY:  Missouri lawmakers made good progress on several important job-creation issues during the 2015 Legislative Session—supporting the goals of Missouri 2030: An Agenda to Lead.

Missouri 2030: An Agenda to Lead is a 15-year strategic plan for economic growth in Missouri. It was released this year by the Missouri Chamber of Commerce and Industry. The plan outlines the state’s challenges and opportunities in an effort to spur growth. Informed by new Gallup data, national economic experts and more than 1,000 Missouri CEOs, Missouri 2030 established four drivers that are key to the state’s future:

  •  Competing for Jobs
  • Preparing the Workforce
  • Connecting through Infrastructure
  • Uniting the Business Community

Using the Missouri 2030 drivers as a roadmap, the Missouri Chamber advocated for the passage of several significant bills to help grow our state’s economy.

“Missouri lawmakers had many accomplishments in 2015 that will create a more competitive state for business investment and job growth. Restored caps on malpractice lawsuits, new incentives for data center growth and legislative passage of Right-to-Work and unemployment benefits reform could mean thousands of new jobs and opportunities for Missourians,” said Daniel P. Mehan, Missouri Chamber president and CEO. “However, in some areas, we still have a long way to go. The biggest missed opportunity was the lack of progress toward finding a funding solution for our transportation system. With the failure to act in 2015, this problem only becomes more urgent.”

Competing for Jobs

In today’s global economy, it takes a competitive business climate to attract investment. In the Missouri 2030 Gallup survey, our state’s current business leaders were quick to name several areas where Missouri needs improvement: Litigation climate, tax environment and government regulations.

The General Assembly made significant progress in these areas in 2015. Already signed into law are bills that will restore caps on medical malpractice lawsuits, create new incentives to attract data centers and give businesses more tax filing options.

Senate Bill 239, sponsored by Sen. Dan Brown, a Republican from Rolla, places a $400,000 cap on noneconomic damage awards in medical malpractice cases. For catastrophic and wrongful death cases, the cap would be $700,000. Malpractice payouts had been uncapped ever since a 2012 ruling by the Missouri Supreme Court. This new law will help lower insurance premiums for health care providers, ensuring Missouri can attract and retain talented clinicians.

Senate Bill 149, sponsored by Sen. Mike Parson, a Republican from Bolivar, allows data centers to receive state and local sales and use tax exemptions for their machinery, equipment and computers. Various data center utility expenses will also now be exempt from sales and use taxes.

Senate Bill 19, sponsored by Sen. Will Kraus, a Republican from Lee’s Summit, ensures all companies can utilize new tax filing options passed in 2013.

“The Missouri Department of Revenue had interpreted the 2013 law to limit the new options to only certain businesses,” Mehan said. “However, the General Assembly and governor agreed that all companies should be able to use this benefit whether they manufacture items, offer services or sell intangible products.”

Other important bills were passed by the General Assembly and are awaiting action by the governor. House Bill 116, sponsored by Rep. Eric Burlison, a Republican from Springfield, would make Missouri the 26th state to attain Right-to-Work status. It would ensure employees in union workplaces are not required to join the union or pay dues. House Bill 722, sponsored by Rep. Dan Shaul, a Republican from Imperial, would stem the expansion of city-driven employment laws. Senate Bill 336, sponsored by Sen. Kraus, would protect restaurants from being held liable when their employees misrepresent tipped income on tax filings. The tip provision is also included in House Bill 517, sponsored by Rep. Galen Higdon, a Republican from St. Joseph.

The legislature also passed a bill to address Missouri’s often-insolvent Unemployment Compensation Trust Fund. House Bill 150, sponsored by Rep. Scott Fitzpatrick, a Republican from Shell Knob, ties Missouri’s jobless benefits to the state’s unemployment rate, providing more weeks of unemployment payments during a recession and fewer weeks of benefits when jobs are plentiful. The bill also requires increased payments from employers to help the state’s Unemployment Compensation Trust Fund reach a balance that is capable of paying for benefits without going into debt. Gov. Jay Nixon vetoed House Bill 150 and it awaits an override attempt during a special session later in the year.

“When we consider the need to compete for growth, it’s clear Missouri took several steps forward this year. The Missouri Chamber and supportive lawmakers had been working for years to restore caps on medical malpractice lawsuits and pass data center incentives. It shows strong progress to have these bills finally become law. We were also encouraged by the legislature’s commitment to passing a Right-to-Work bill and reforming unemployment benefits. With the governor opposing Right-to-Work and unemployment benefits reform, we are asking the legislature to continue to push for these important laws,” said Mehan. “Passing bills to help Missouri compete is one of the areas where our legislative leaders are reliably successful. On behalf of the business community, I’d like to thank them for their continued focus on this effort.”

Next year, the Missouri Chamber will continue to seek reform to the state’s lawsuit-generating discrimination standards, an effort that did not pass the legislature this year. In addition, the state still must address an April 2014 Supreme Court ruling that exposes employers to litigation dealing with discrimination in workers’ compensation claims.

Preparing the Workforce

Missouri employers are deeply concerned about the future of our state’s workforce. One of the most telling statistics revealed by the Missouri 2030 Gallup survey was that only 15 percent of Missouri business owners agree that our state’s high schools are preparing students for the workforce.

When it comes to the most talented workers, only a third of Missouri business leaders say they are able to attract top talent to Missouri. Likewise, only 30 percent say Missouri is retaining our most talented workers.

“The states that have strong workforces are the states that will win the competition for jobs,” Mehan said. “We must continually work to prepare our workforce and talent.”

Missouri lawmakers began to address this issue by making meaningful investments in education. The state’s K-12 system will receive an $84 million boost. Early childhood education saw a $5 million increase. The state’s performance-based funds for higher education are increasing by $12 million.

Beyond the budget progress, House Bill 42, sponsored by Rep. David Wood, a Republican from Versailles, seeks to give students in failing schools the ability to transfer to better schools. Education leaders in the business community are especially encouraged by the virtual school provisions in the bill, which would allow more Missouri students to access high-quality online coursework. The bill awaits action from the governor.

“The sentiments expressed by the General Assembly this session make it clear that our elected leaders care about the future of our state’s workforce. I’d like to thank them for their work and for the positive initiatives passed this session,” Mehan said. “However, the limited progress we saw on education this year—much like in past sessions—illustrates why we are encouraging the business community to lead on this issue.”

During the interim, the Missouri Chamber will be aggressively pursuing new ways to close the skills gap employers are reporting.

“Through our Missouri 2030 effort, we are working to bring new ideas to Missouri that empower employers to engage with students and workers in their communities to help establish a stronger workforce–without waiting for a government-created solution,” Mehan said. “We have a lot to share on this in the coming months.”

Connecting Through Infrastructure

Only 37 percent of business leaders are satisfied with the state’s basic infrastructure, according to the Missouri 2030 Gallup survey. That number is likely to decline as the General Assembly made no progress toward resolving the state’s transportation funding woes.

An independent study released in late April showed that Missouri’s current road conditions are costing the state $4.5 billion annually. Earlier in the legislative session, the Missouri Department of Transportation unveiled its 2017 maintenance plan to illustrate how the lack of new funding will make the situation even worse. The plan shows a majority of Missouri’s roads facing deteriorating conditions and some bridges eventually closing.

Lawmakers responded by proposing a small, stop-gap fuel tax increase. However, that idea failed to pass either chamber.

“Despite the progress made in other areas this session, the failure to address transportation funding is a major concern. If we continue down this path, we are going to see our state’s most important geographical asset—our central location combined with solid infrastructure connections—crumble in neglect,” said Mehan. “We simply cannot allow this to happen. The business community is deeply concerned about the lack of road funding solutions coming from the General Assembly. Through Missouri 2030, we are exploring how business stakeholders can provide new leadership on this issue.”

Uniting the Business Community

Parallel to the Missouri Chamber’s efforts in the state capitol, the Missouri Chamber also worked across the state to inform people about Missouri 2030 and the need to transform our state’s economic future. Hundreds of new stakeholders are becoming engaged in this effort.

This push included work by the Missouri Chamber Federation to establish a strong network of local and regional chambers of commerce. The federation is encouraging business leaders to become more involved with state policy discussions, providing a stronger voice for business across the state.

Already, 56 chambers have joined the Missouri Chamber Federation, bringing tens of thousands of new employers to the table during important policy discussions.

“The Missouri Chamber Federation has the potential to become a transformational force in our state,” Mehan said. “We are working to unite this diverse group of communities behind critical policies—such as transportation funding—which can benefit the state as a whole. A united business community will provide a powerful new voice for job-creation efforts in Missouri.”

The Missouri Chamber of Commerce and Industry is the largest business association in Missouri. Together, with the Missouri Chamber Federation, the Missouri Chamber represents more than 40,000 employers.

 

Kansas City’s push to raise minimum wage to $15 an hour could cost region 3,200 jobs and increase government expenses by more than $100 million

The Missouri Chamber of Commerce and Industry believes the wage mandate under consideration by the Kansas City city council could cost the city more than 3,200 jobs and significantly raise state and local government costs for wages and operating expenses. Attached is a study and letter to mayor Sly James by the Missouri Restaurant Association, which warns of the impact of the proposed wage increase.

The campaign in Kansas City to raise the minimum wage to $15 an hour is part of a national trend to enact fragmented employment laws in states by working through local city ordinances. This movement is dangerous because it creates a patchwork of employment law that is difficult for employers to navigate.  It also raises costs of conducting business and in locations such as Kansas City, where employers can easily move across state borders in order to cut their labor costs in half. This could have a long-term detrimental economic and social impact on the city and a significant impact on state revenues.

For this reason, the Missouri Chamber of Commerce and Industry has successfully advocated the passage of legislation to create uniform workplace standards in Missouri.  House Bill 722 would restrict cities from passing ordinances that increase the minimum wage, mandate a certain amount to sick leave or ban plastic or reusable shopping bags. The legislation received strong support by the Missouri House and Senate and now awaits the signature by Gov. Jay Nixon.  So far, 12 states have enacted related laws.  Unfortunately, should Gov. Nixon sign HB 722 into law, it will not go into effect until august 28. This could be too late to block current action in Kansas City.

Here are a few ways you can help:

  • attend an upcoming Kansas City city council meeting to voice your concern on May 21 on the 10th floor of the Kansas City city hall. The meeting starts at noon.
  • submit your concerns to Kansas City Mayor Sly James. The phone number is: 816-513-3500.  The address is:  the office of the mayor, city hall 29th floor, 414 East 12th street, Kansas City, MO 64106.
  • contact governor jay Nixon and urge his signature of House Bill 722. The phone number is: (573) 751-3222.  The address is:  the Office of Governor Jay Nixon, PO box 720, Jefferson City, MO 65102.

For more information, contact Brian Bunten, Missouri Chamber general counsel, at bbunten@mochamber.com, or by phone at 573-634-3511.

The Missouri General Assembly votes to make Missouri a Right-to-Work state

JEFFERSON CITY — Missouri is one step away from becoming the nation’s 26th Right-to-Work state. With a final vote by the Missouri House today, the Missouri General Assembly has passed legislation saying workers cannot be forced to join labor unions, or pay union dues, to keep a job. The governor’s signature is the only action that remains in order for House Bill 116 to become law.

“This means more jobs and opportunities for our state, plain and simple,” said Dan Mehan, President and CEO of the Missouri Chamber of Commerce and Industry.  “Too often, Missouri has been overlooked by businesses looking to expand because we were not a Right-to-Work state. Too often, Missouri workers have worried about their jobs being moved to Right-to-Work states.  We applaud the courage of the General Assembly to take on this difficult issue.  Times have changed and Missouri must be willing to change with the times, or be left behind.”

Lt. Gov. Peter Kinder presided over the nine hours of debate in the Missouri Senate on May 12. Sen. Dan Brown employed a rare procedural maneuver called “moving to the previous question” to bring the discussion to an end so that a vote could be taken. The final vote   to pass the bill in the Senate was 21-13.

Today, after several hours of debate, the House voted 92-66 to send the bill on to Gov. Nixon.

The majority of Missouri employers support making our state Right-to-Work according to a recent survey of more than 1,000 CEOs and top management conducted by Gallup. Support for this policy was even higher in some industry sectors, such as transportation, utilities and communications, where 67 percent supported making Missouri a Right-to-Work state. The survey was part of the Missouri Chamber’s effort to develop a 15-year strategic economic plan for our state called Missouri 2030: An Agenda to Lead.

Gallup also interviewed site selectors about Missouri’s labor status.

“Site selectors encouraged Missouri to become Right-to-Work,” Mehan said. “One site selector commented that Missouri’s prospect flow in manufacturing is only 60 percent of what it would be if it was Right-to-Work.”

 Rep. Eric Burlison, a Republican from Springfield, sponsored the Right to Work legislation. The bill was handled by Sen. Dan Brown in the Missouri Senate.

The Missouri Chamber of Commerce and Industry (www.mochamber.com) is the largest business association in Missouri. Together, with the Missouri Chamber Federation, the Missouri Chamber represents more than 40,000 employers.

Missouri House veto override vote of House Bill 150 – How they voted

AYES – 109

Alferman(R); Allen(R); Anderson(R); Andrews(R); Austin(R); Bahr(R); Barnes(R); Basye(R); Beard(R); Bernskoetter(R); Berry(R); Bondon(R); Brattin(R); Brown-57(R); Brown-94(R); Burlison(R); Chipman(R); Cierpiot(R); Conway-104(R); Cookson(R); Cornejo(R); Crawford(R); Cross(R); Curtman(R); Davis(R); Diehl(R); Dogan(R); Dohrman(R); Dugger(R); Eggleston(R); Engler(R); Entlicher(R); Fitzpatrick(R); Fitzwater-144(R); Fitzwater-49(R); Flanigan(R); Fraker(R); Franklin(R); Frederick(R); Gosen(R); Haahr(R); Haefner(R); Hansen(R); Hicks(R); Higdon(R); Hill(R); Hinson(R); Hoskins(R); Hough(R); Houghton(R); Hubrecht(R); Hurst(R); Johnson(R); Jones(R); Justus(R); Keeney(R); Kelley(R); King(R); Koenig(R); Kolkmeyer(R); Korman(R); Lair(R); Lant(R); Lauer(R); Leara(R); Lichtenegger(R); Love(R); Lynch(R); Mathews(R); McCaherty(R); McDaniel(R); McGaugh(R); Messenger(R); Miller(R); Moon(R); Morris(R); Muntzel(R); Neely(R); Parkinson(R); Pfautsch(R); Phillips(R); Pietzman(R); Pike(R); Redmon(R); Rehder(R); Reiboldt(R); Remole(R); Rhoads(R); Richardson(R); Roden(R); Roeber(R); Rone(R); Ross(R); Rowden(R); Rowland(R); Shaul(R); Shull(R); Shumake(R); Sommer(R); Spencer(R); Swan(R); Taylor(R); Vescovo(R); Walker(R); White(R); Wiemann(R); Wilson(R); Wood(R); Zerr(R)

 

NAYS – 53

Adams(D); Anders(D); Arthur(D); Black(R); Burns(D); Butler(D); Carpenter(D); Colona(D); Conway-10(D); Corlew(R); Curtis(D); Dunn(D); Ellington(D); English(I); Gannon(R); Gardner(D); Green(D); Harris(D); Hubbard(D); Hummel(D); Kendrick(D); Kidd(R); Kirkton(D); Kratky(D); LaFaver(D); Lavender(D); Marshall(R); May(D); McCann Beatty(D); McCreery(D); McDonald(D); McManus(D); McNeil(D); Meredith(D); Mims(D); Mitten(D); Montecillo(D); Morgan(D); Newman(D); Nichols(D); Norr(D); Otto(D); Pace(D); Peters(D); Pierson(D); Pogue(R); Rizzo(D); Runions(D); Ruth(R); Smith(D); Solon(R); Walton Gray(D); Webber(D)

Senate committee passes bill to ease administrative burden on businesses

The Senate Ways and Means committee voted out a bill last week that would ease the burden on businesses having to write multiple checks to political subdivisions by allowing them to remit one payment to the Department of Revenue instead.

Currently businesses that operate in multiple cities and counties may have to multiple checks to several entities, requiring manpower and time. If HB 389, sponsored by Rep. Denny Hoskins (R), becomes law, beginning Jan. 1, 2018, the Department of Revenue will adopt rules implementing a system that allows a business to remit one payment per month to DOR for any tax, fee, charge, or assessment if the total amount is more than $50,000 per year and it is owed to at least 25 assessing entities.

Several entities including lobbyist Claudia Sands of Centurylink testified on behalf of the bill.

“We write 400 checks per month right now, and this bill could get that down to one,” Sands testified.

“The Missouri Chamber and its policy council has made this legislation a priority and has fought for the passage of the bill to ease the burden on small business owners,” Tracy King, vice president of governmental affairs for the Missouri Chamber, said. “This bill will make it easier for businesses to comply with regulations and cut costs that unduly burden businesses.”

The bill would phase in the plan by only accepting the first 25 qualifying businesses that apply the first year, 100 qualifying businesses that apply the second year, and all qualifying businesses that apply beginning the third year. The department must distribute the payments no later than 15 days after receipt of the payment and can collect an administrative expense fee from the business of up to 1% of the amount remitted.

For more information please contact Ms. King at tking@mochamber.com or by phone at 573-634-3511.

Senate Bill 19 is signed — New law opens tax filing options to more businesses

For corporations that operate in multiple states, tax season can be a challenging time as they decide how to report income across various state tax filings.

A law signed by the governor on May 6 would help these companies, giving them more options as they file tax returns.

“Every taxpayer in the state of Missouri knows how difficult it can be to file an annual tax return. However, for corporations that do business across state lines, the filing complexity only multiplies,” said Daniel P. Mehan, Missouri Chamber president and CEO. “This law makes Missouri a more business-friendly state by providing more companies better choices when they report their income to the government each year.”

Senate Bill 19 was sponsored by Sen. Will Kraus, a Republican from Lee’s Summit. The law originated in 2012 from the business policy stakeholders on the Missouri Chamber’s tax council. The council generated a proposal that would give corporations an alternate formula to consider when filing their tax returns. The idea received widespread support from Missouri lawmakers and became law in 2013.

But since then, the Missouri Department of Revenue has greatly limited the kinds of corporations that can access the new option contained in the 2013 law. This year’s Senate Bill 19 ensures all companies can utilize this new statute—whether they manufacture items, offer services or sell intangible products. The bill received bipartisan support in the General Assembly.

“This bill makes it clear that the Missouri General Assembly intended for all companies to be able to access the tax filing options passed in 2013,” Mehan said. “We thank the General Assembly for bringing clarity to this issue during the 2015 session.”

Missouri’s medical malpractice caps are restored

Following three years of unlimited payouts, medical malpractice lawsuit caps have been restored in Missouri. With the governor’s signature on a compromise bill, Missouri has taken a positive step toward protecting our state’s medical provider community.

In 2012, the Missouri Supreme Court released a decision that abolished Missouri’s previous medical lawsuit caps. An uncapped malpractice litigation environment leads to higher medical malpractice insurance costs for all physicians, making Missouri a less appealing place to practice medicine.

Senate Bill 239 fixes this problem. The bill was sponsored by Sen. Dan Brown, a Republican from Rolla, and places a $400,000 cap on noneconomic damage awards in medical malpractice cases. For catastrophic and wrongful death cases, the cap would be $700,000. The proposal received bipartisan support.

For any enterprise, cost of doing business is a major factor in deciding where to locate. Missouri’s uncapped malpractice litigation system has led to rising insurance costs for our physicians, harming Missouri’s ability to offer a competitive environment to attract medical clinicians,” said Daniel P. Mehan, Missouri Chamber president and CEO. “Ever since the injudicious Supreme Court ruling in 2012, Missouri’s uncapped malpractice system has been a critical issue. I’d like to thank our elected leaders for finding a compromise and finally resolving this problem.”

Under the law, the new caps will increase by 1.7 percent each year. The bill was handled in the House by Rep. Eric Burlison, a Republican from Springfield.