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.