JEFFERSON CITY – If activity during the legislative interim is any indication, Missouri state lawmakers will have tough work ahead in the 2014 Legislative Session, with employer issues rising to the forefront of debate.
During a contentious veto session in September 2013, lawmakers and the Gov. Jay Nixon clashed over pro-jobs bills. In the end, Missouri employers were only a handful of votes shy of the two-thirds majority needed to overturn Gov. Nixon’s veto of broad-based tax relief. Employers were just two votes away from overturning Gov. Nixon’s veto of legislation to keep unemployment insurance benefits from employees fired for stealing or doing drugs on the job. Both issues meant millions of dollars to help existing Missouri employers keep jobs in our state, while providing a strong tool to recruit new employers to Missouri.
In stark contrast, Gov. Nixon called lawmakers back to Jefferson City in November 2013 to work on a $1.7 billion incentive package to lure the Boeing 777X production line to St. Louis. This whirlwind special session resulted in an extremely competitive offer for the aeronautic giant. Unfortunately, that work likely will go unrewarded if Boeing keeps the jobs in Washington following a union vote to accept its conditions.
These interim exercises highlight the ongoing challenge facing Missouri’s economic development efforts: there is no long term plan for economic growth.
The special session showed that Missouri’s governor, lawmakers, and local leaders could move quickly and work through differences to craft an attractive incentive package for one large company and its suppliers,” said Daniel P. Mehan, Missouri Chamber president and CEO. “Now, what are we going to do for the thousands other employers that provide jobs in our state? Where is our long-term plan for job growth?”
As the state’s largest employer advocacy group, the Missouri Chamber of Commerce and Industry is asking lawmakers in 2014 to continue their work on broad-based, pro-jobs policy to make Missouri more competitive in the long-term.
The Missouri Chamber has released an aggressive list of legislative priorities, recently approved by the organization’s board of directors. Securing broad-based tax relief is high on the list of priorities. Employment law, education, labor and Medicaid reforms also are among the Missouri Chamber’s top priorities.
“Our agenda is designed to make a broad-based impact on Missouri employers and ultimately create more job opportunities across all industries – not just high-profile employers, but all employers,” Mehan said. “We fully support targeted tax incentives and programs when necessary, however the most effective policy for growing the most jobs is to provide the best possible business environment for all business.”
A full list of the Missouri Chamber’s 2014 Legislative Agenda can be found at: http://www.mochamber.com/mx/hm.asp?id=LegislativeAgenda
BROAD-BASED TAX RELIEF
Reduction of the Corporate Income Tax –
Reducing Missouri’s corporate income tax could be one of the best moves Missouri can take to position itself for long-term job growth in the next decade. In 2014, the Missouri Chamber again will lead the fight to pass legislation to reduce the corporate income tax, legislation that was vetoed by Gov. Nixon in 2013.
“Reducing the tax burden on Missouri’s job creators and workers has been part of our agenda for more than a decade. But while legislative efforts have been blocked in Missouri we’ve watched our neighboring states pass us by and take our jobs with them in the process,” Mehan said.
The Missouri Chamber will work to find common ground with Gov. Nixon and education groups, the most vocal opponents of the vetoed House Bill 253.
“We need to help the education community understand that when our state grows jobs, it also grows funding for education. The education community can’t continue to fight over a shrinking pot of money if it truly wants progress. They need to work with us to support strategies that will help us grow as a state,” Mehan said.
Unemployment Insurance Reform –
Reducing the tax liability of Missouri’s unemployment system is another measure that would provide broad-based relief to all Missouri employers. Missouri currently owes $308 million to the federal government for borrowed unemployment insurance funds that were incurred through the economic downturn and subsequent federal extensions of unemployment eligibility. In January 2014, the penalty surcharge that employers in indebted states are required to pay increased from $42 per employee to $63 per employee. Missouri is among the states that continue to pay penalties for ongoing federal debt.
“Missouri employers bear the weight of this problem, because employers fully fund the system through federal and state UI taxes. Employers have every right to demand a more cost-effective approach to paying down the debt and greater measures of accountability to root out fraud,” Mehan said.
The Missouri Chamber will advocate for a multi-pronged approach to bring solvency back to Missouri’s unemployment insurance trust fund. Options under consideration include bonding the outstanding debt to limit interest and penalties. At the same time, the Missouri Chamber will work to implement stricter standards for workers who can access the system. This move will provide long-term stability for the fund in the future so that the system can serve the workers it was designed to protect – people unemployed by no fault of their own.
Several states have taken common-sense steps toward stemming the tide of unemployment insurance debt. Missouri employers have not been as lucky. In the 2013 Legislative Session, the Missouri Chamber strongly advocated passage of House Bill 611, legislation that met several required federal mandates coupled with system reforms. The Missouri Chamber also supported Senate Bill 28, legislation that sought to limit unemployment insurance fraud. Both bills were vetoed by Gov. Nixon.
EMPLOYMENT LAW REFORM –
Employment law reform is another piece of unfinished business to provide broad-based relief, in the form of reduced litigation. Although a comprehensive reform package was passed by the General Assembly in 2011 and 2012, Gov. Nixon vetoed both bills. In 2013, the issue was given debate time, even on the last day of the 2013 Legislative Session, but was not given an opportunity for a vote.
“Missouri courts have eroded the law to the point that Missouri holds the distinction of some of the lowest standards for discrimination lawsuits in the nation,” Mehan said.
Simply put, the legislation would have made Missouri’s employment law mirror that of the federal Civil Rights Act, like the majority of states in the nation. This legislation would have brought Missouri law back in line with other states, reduced frivolous lawsuits, and insured more timely and fair resolution for legitimate discrimination cases.
EDUCATION REFORM –
Perhaps no other issue impacts Missouri’s workforce and Missouri employers’ ability to compete as much as education policy.
“If we fail in education, no other economic development measures really matter,” Mehan said. “Our workforce is on the front line of our economy and our education system determines the strength of that front line.”
The Missouri Chamber board of directors approved a broad agenda of education reforms, including setting higher standards for Missouri students.
“The Missouri Chamber believes that the state should have an agreed upon set of rigorous standards for the fundamental coursework that students encounter at each grade level, while preserving local control of curriculum and instructional choices by educators to achieve such standards. Missouri students benefit by having high standards to aspire to and the state education system as a whole benefits by having an aligned set of standards that can allow for student transfer from district to district and across state boundaries,” Mehan said.
The Missouri Chamber will also advocate for measures that will better support strong teachers and administrators. These measures include implementing merit pay and performance-based evaluation systems. The Missouri Chamber also will push to eliminate state-imposed tenure systems.
LABOR POLICY –
A state’s labor policy is one of the top factors site selectors look to when deciding where to move or expand businesses. The more favorable a state looks to site selectors, the more jobs that state will have to offer its workers. Labor issues are poised to be a part of considerable debate during the 2014 Legislative Session, and the Missouri Chamber board of directors has voted to provide advocacy support.
Right to Work –
Each of Missouri’s neighboring states, with the exception of Illinois and Kentucky has implemented Right to Work laws. The law was enacted in Indiana in 2012 and that state is reporting a 37 percent increase in the number of plant and plant expansions for that state, according to the Indiana Chamber of Commerce. Most recently, Michigan passed a right to work law.
“Employees should be given the opportunity to choose whether or not they want to be part of a union. Right to Work gives them that right,” Mehan said. “It’s just that simple.”
However, Mehan admits that securing passage is far from simple. Labor has poured millions of dollars into states to fight Right to Work laws. The employer community will have to be ready for a costly campaign if that path is seriously pursued.
Paycheck Protection –
Another labor priority of the Missouri Chamber is called Paycheck Protection. Paycheck Protection prohibits labor organizations from using employee dues for political contribution without permission. That’s a basic right every Missouri worker deserves, says Mehan.
“Paycheck protection ensures that union bosses do not spend employees’ dues without their consent on political activity they do not support. Paycheck protection requires a written consent from the employee to the employer for the use of his or her union dues on political contributions,” said Mehan.
MEDICAID EXPANSION AND REFORM –
Missouri lawmakers’ decision on Medicaid expansion will also have a broad-reaching impact on every Missouri employer.
“The impact of the Affordable Care Act (ACA) on employers is far more reaching than most can imagine. Not only does it dramatically increase how much employers have to pay for health insurance coverage for their employees. It also is driving costs up on our state’s health care providers, some of the largest employers in Missouri,” Mehan said.
All health care providers will see radical cost shifts as a result of ACA and those cost shifts will be borne by Missouri employers in the form of higher insurance costs and taxes. Some small health care providers, such as rural hospitals, will not be able to shift enough of the burden and may be forced to limit services or even close their doors.
“These are the cold, hard facts about ObamaCare and these are the reasons the Missouri Chamber is advocating that Missouri expand its Medicaid program in order to recoup as many federal dollars as we can as a state to ease the blow,” Mehan explains. “This is the only action the Legislature can make to make ObamaCare better.”
The Affordable Care Act was designed to provide fewer dollars to hospitals for uncompensated care as a trade-off for states to expand the Medicaid program and other insurance options through health insurance exchanges to make up that difference. However, when the Supreme Court ruled that the federal government could not cut off funding for existing Medicaid for states declining to take part in the expansion, the rules of the game changed.
“Now hospitals are looking at significant cuts, without receiving the additional Medicaid funding if state lawmakers choose not to expand it,” Mehan said.
The Missouri Chamber supports coupling Medicaid expansion with full-scale reforms to limit fraud that exists in the system.
In 2010 the Government Accountability Office (GAO) released a report claiming to have identified $48 billion in “improper payments,” nearly 10 percent of the $500 billion Medicaid system. Others, including U.S. Attorney General Eric Holder, reported that there is an estimated $60 to $90 billion in fraud in Medicare and a similar amount for Medicaid.
“We would be foolish if we expanded the system without implementing system reforms to limit fraud,” Mehan said.
The Missouri Chamber of Commerce and Industry (www.mochamber.com) was founded in 1923 and is the largest business association in Missouri, representing almost 3,000 employers providing more than 425,000 jobs for Missourians.