Lawmakers vote to extend safety net for employers and workers: the Shared-Work Program

A program that helped more than 30,000 workers keep their jobs last year has been extended, thanks to action by Missouri lawmakers.  The Missouri Senate gave unanimous approval today to Senate Bill 844, legislation that extends the federal Shared-Work Program.  The Missouri House approved the bill yesterday on a vote of 143-4. The legislation is sponsored by Sen. Bob Dixon, a Republican from Springfield.  SB 844 now heads to Gov. Jay Nixon’s desk for signature.

factory workerNearly 350 Missouri employers were able to avoid layoffs last year using the Shared-Work Program.  Instead of cutting staff, employers can reduce workers’ hours through the program, with wages lost to workers supplemented by partial unemployment benefits.

“This safety net allows companies to weather tough economic times without losing their skilled workforce.  At the same time, the program helps Missouri workers make ends meet,” said Dan Mehan, Missouri Chamber President and CEO. “In addition to supplementing lost wages, employees can also retain employer-provided benefits, such as health care.”

The program is a win-win for employers, workers and the state.  It is a proven method for keeping jobs in Missouri.

“Employer members have told us that the Shared-Work Program has helped many of them stay in business during tough times.  Companies and jobs saved are important to the state’s bottom line,” Mehan said.

When Missouri Chamber members were alerted that the Shared-Work Program was in jeopardy if this legislation was not passed, many reached out to their legislators and urged action. Their action played a key role in pushing the extension over the finish line.

Similar legislation, House Bill 1713, was sponsored by Rep. Jeanne Lauer.  Rep. Lauer provided leadership and support on her bill and SB 844.

 

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Bill reining in unemployment fraud heard in the Missouri House

The House Workforce Development and Workplace Safety Committee brought Missouri one step closer to stamping out fraud in the unemployment system during a public hearing on Senate Bill 510, sponsored by Sen. Will Kraus (R-Lee’s Summit.) For several years, Missouri has worked to repay millions of dollars borrowed from the federal government to cover unemployment insurance claims, when the unemployment insurance fund became insolvent. Blocking fraud would help bring solvency back to the fund.

The Missouri Senate passed Senate Bill 510 in March, sending it to the House committee. The proposed legislation would keep employees who are fired for workplace infractions such as stealing and doing drugs from receiving unemployment insurance benefits. Sen. Will Kraus sponsored a similar bill, Senate Bill 28, which was vetoed by Gov. Jay Nixon during the 2013 Legislative Session.

“We need this bill because people are getting benefits when they have done things like stealing, and that’s not right.” Sen. Kraus testified.

Many states were on the indebted list following the recession, when state unemployment funds were unable to keep up with the increased number of claims. Most have taken steps to reduce or eliminate outstanding debt. Missouri is one of 13 states that remain on the indebted list. Missouri currently owes $270 million to the federal government. In addition to penalties, interest on the debt grows at a rate of approximately $12 million a year.

“The Missouri Chamber has worked with Sen. Kraus for the last three years to reform the unemployment system, and this bill is a great start,” Tracy King, vice president of governmental affairs for the Missouri Chamber, testified. “In reviewing cases, I’ve found many people were given benefits for egregious behavior, and those that were denied could appeal and then were given a positive appeal. Employers are paying into this fund, and we need to put a stop to the abuses that are draining the fund.”

For more information on unemployment insurance reform, contact Tracy King, Missouri Chamber vice president of governmental affairs, at tking@mochamber.com, or by phone at 573-634-3511.

Missouri House votes to give employees a choice to join a union, but additional votes needed for final approval

Legislation to give employees the right to choose whether or not they want to be part of a labor union was given first-round approval on April 9 by the Missouri House of Representatives after heated debate.  The bill, HB 1770, sponsored by Rep. Eric Burlison, specifies that no person can be required to pay dues or fees to a union as a condition of work.  The bill was perfected on a vote of 78-68.

Some called the vote historic.  It was the first time in history that the Missouri House took a vote on right-to-work legislation.  However, in order to move to the Missouri Senate, the bill must receive 82 votes in support, which means four representatives must change their votes in the final vote on HB 1770.  Twelve representatives were absent for the April 9 perfection vote.  (See how they voted.)

Until House leadership is confident 82 yes votes can be secured, the bill likely will not be brought back up.  That is unfortunate for Missouri, which could soon be among the minority of states without right-to-work protections for its workers.

“It’s an issue of economics,” said Daniel P. Mehan, Missouri Chamber president and CEO.  “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.  It’s also an issue of fairness.  Shouldn’t an employee have the right to decide whether a portion of his or her paycheck goes to a union?”

In Missouri, labor groups can negotiate on behalf of all workers — even those who are not in unions. Employees who are not union members don’t have to pay dues, but they must pay fees to cover the cost of representation — essentially tying them to the groups, even if they want no affiliation.

Twenty-four states currently have right-to-work laws.  In 2013, right-to-work legislation was introduced in 21 states, as well as in the District of Columbia and the U.S. Congress.  Of the states surrounding Missouri, all but Illinois and Kentucky are right-to-work states.

Statistics show that states that have implemented right to work laws are seeing an increase in jobs and worker wages.  According to Indiana Economic Development Corporation (IEDC), two years after Indiana passed right to work 64 companies relocated in the Hoosier State.  These companies created 8,000 jobs and $2.5 billion in capital investment.  What’s more, these new jobs paid on average $3.00 more per hour than previous wages.  While the IEDC says the right-to-work law wasn’t the only reason the companies came to Indiana, company executives said they wouldn’t have considered the state without it.

A similar success story hits even closer to home in neighboring state Oklahoma.  The first six months after Oklahoma passed right to work, the state went from 40th in the nation to 1st in job creation, according to the State Chamber of Oklahoma.

“Missouri can’t afford to ignore what is happening in states around us,” Mehan said.  “The most beneficial things we can provide Missouri workers are more job opportunities and that is what this bill would do.  It doesn’t mean we wouldn’t still have unions in Missouri, but the unions will have to work a little harder to earn their fees.”

Unfortunately, 2014 may not be the year this legislation will pass in Missouri.

“This vote makes it clear that we cannot underestimate this issue,” Mehan said.  “The states that have recently passed right-to-work legislation – Michigan, Indiana, Oklahoma – were successful because it was approached strategically and as part of a long-term plan.”

For more information on right to work legislation, contact Jay Atkins, Missouri Chamber general counsel and director of governmental affairs, at jatkins@mochamber.com, or by phone at 573-634-3511.

Senators give approval to tax cut bill, moving it to House Committee

A tax bill with the intention of making Missouri’s tax rates more competitive was third read and passed by the Missouri Senate and moved into the House Ways and Means Committee. The bill passed out of the Senate on a 23-9 vote.

Senate Bill 509, sponsored by Sen. Will Kraus, R-Lee’s Summit, contains a number of tax cutting provisions. Among them, the bill would cut Missouri’s top income tax rate from 6 percent to 5.5 percent over a number of years, beginning in two years. The tax cut would only phase in during years when the state’s general revenue collections grow by at least $150 million.

In addition, the bill creates an individual income tax deduction for business income, which would also be phased in beginning in two years. The new deduction would allow Missouri businesses to deduct up to 25 percent of their business income. This also would be triggered by state revenues increasing by $150 million.

The bill also includes a new $500 deduction for Missourians making less than $20,000.

It is estimated that the tax cut would cost Missouri approximately $450 million.

“This bill offers aggressive tax relief to all Missourians, freeing up greater resources for businesses and individuals to invest in our economy and job creation,” said Tracy King, Missouri Chamber vice president of governmental affairs. “At the same time, these bills protect our state’s important investments in areas such as education. We continue to advocate for an approach that both reduces our tax burden while providing adequate funding to help ensure our students are receiving the education they need for tomorrow’s economy.”

The Missouri Chamber supports efforts to reduce taxation in our state while holding education funding harmless.

For more information about tax issue, please contact Tracy King, Missouri Chamber vice president of governmental affairs, at tking@mochamber.com, or by phone at 573-634-3511.

NEWS RELEASE – Reining in fraud would help make Missouri’s unemployment trust fund solvent

 For several years, Missouri’s unemployment insurance trust fund has been working to repay millions of dollars borrowed from the federal government to cover unemployment insurance claims.  Legislation given final approval by the Missouri Senate on Thursday could help rein in some of the debt.

The Missouri Senate passed Senate Bill 510, legislation that would keep employees who are fired for infractions such as stealing and doing drugs in the workplace from receiving unemployment insurance benefits.  Sen. Will Kraus is the sponsor of SB 510.  He sponsored a similar bill, Senate Bill 28, which was vetoed by Gov. Jay Nixon in the 2013 Legislative Session.

Many states were on the indebted list following the recession, when state unemployment funds were unable to keep up with the increased number of claims.  Most have taken steps to reduce or eliminate outstanding debt.  Missouri is one of 13 states that remain on the indebted list.  Missouri currently owes $270 million to the federal government.  In addition to penalties, interest on the debt grows at a rate of approximately $12 million a year.

“Employers fully fund the system through federal and state unemployment insurance fees.  That’s why employers have a right to demand that the system be protected from obvious fraud,” said Dan Mehan, Missouri Chamber President and CEO.

The Missouri Chamber is working to bring solvency back to Missouri’s unemployment insurance trust fund through several legislative proposals that are under consideration during the 2014 Legislative Session.  These options include bonding the outstanding debt to limit interest and penalties.   Another legislative proposal that is under review would tie the weeks of unemployment insurance eligibility to the unemployment rate.  Senate Bill 510 addresses the problem of fraud that employers say is a serious drain on the system.

“Why should we allow employers shoulder the debt of several hundreds of millions of dollars, now or in the future, when we have the power to implement common sense reforms like Senate Bill 510?” Mehan asked.

Senate challenges proposed tax cut compromise

The Missouri Senate debated a tax cut bill this week but a vote was delayed as more discussion is needed about the proposal.

Senate Bill 509, sponsored by Sen. Will Kraus, R-Lee’s Summit, would lower Missouri’s personal and business income taxes depending on different criteria.

For example, Sen. Kraus’ proposal would cut the state’s 6 percent income tax rate by a quarter percent. But it would only happen if revenues increase by $200 million and if schools are fully funded.

Likewise, businesses would receive a new 25 percent deduction on the first $100,000 of certain business income dependent on whether the General Assembly passes new laws to limit tax credits. The same trigger would bring an extra .15 percentage cut to those who pay the top income tax rate.

Sen. Kraus has promoted the proposal as a compromise. Last year, the General Assembly passed tax cut legislation that was vetoed by Gov.  Nixon.  However, Gov.  Nixon has hinted he would approve the language Rep. Kraus is currently proposing.

“I believe this meets the group goal of broad-based tax reform,” Sen. Kraus said. “I believe the triggers are reachable and well within our means to be able to do over the next couple years and meet our obligations for education.”

During discussion on the bill, some senators expressed concern that the bill places too many conditions on the tax cuts. Other senators remained apprehensive that the tax cut could undermine existing state programs and lead to funding challenges in future years.

The bill did not reach a vote in the Senate.

SB 509 is just one option the General Assembly is considering this year as lawmakers work toward cutting taxes.

The Missouri House has already passed House Bills 1253 and 1297, sponsored by Rep. T.J. Berry, R-Kearney, and  Rep. Andrew Koenig, R-Manchester, respectfully. These House bills would reduce the amount of business income taxed by 50 percent and cut the state’s corporate tax rate from 6.25 percent to 3.125 percent. Also on the table is reducing the individual income tax rate from 6 percent to 5.3 percent. All of the proposed tax cuts would be phased in gradually over several years. The bills also contain wording that would protect important state functions, such as education, from the possibility of reduced funding. The tax cuts would only be triggered in years when there was either stable tax revenue or revenue growth.

The proposal by Reps. Berry and Koenig awaits a committee assignment in the Senate.

As lawmakers consider the many options on the table, the Missouri Chamber will continue supporting broad based tax relief for Missouri businesses and all Missourians.

For more information on tax issues, contact Tracy King, Missouri Chamber vice president of governmental affairs, at tking@mochamber.com, or by phone at 573-634-3511.

House committees approve three noteworthy business bills

Three significant business bills passed out of committee in the Missouri House of Representatives this week.

The Missouri Chamber of Commerce and Industry testified in support of these bills and will continue advocating for their passage as they reach the House floor. Fortunately, two of these bills were passed as “consent,” putting them on the fast track for approval in the House.

In addition to House passage, all three bills must also be approved by the Missouri Senate as well before going to the governor for a final endorsement.

  • Ending the jobs border war with Kansas: HB 1646 and HB1515: This week, the House Special Standing Committee on Small Business passed these bills which seek to end the practice of giving generous relocation incentives to border jumping companies. In House testimony last week, the Hall Family Foundation in Kansas City announced that enticing companies to cross the Missouri/Kansas border, to either side, has cost both states a combined $217 million. The bills are sponsored by Rep. Tim Jones, R-Eureka, and Rep. Kevin McManus, D-Kansas City. They were passed as consent.
  • Funding transportation, HJR 68: With Missouri’s funding for transportation just years away from seeing a huge cut, the Missouri House Committee on Transportation has endorsed a proposal to fund future transportation needs with a 1 percent sales tax. The tax, sponsored by Rep. Dave Hinson, R-St. Clair, would need approval by Missouri voters and would sunset after 10 years without additional voter approval. Without additional funding, by 2017 Missouri will not have enough funding to continue maintaining our existing infrastructure.
  • Picking up the sales tax tab, HB 1296: It is currently illegal in Missouri for sellers to entice buyers with an offer to pick up the sales tax tab. But House Bill 1296, which was passed as a consent bill this week by the House Ways and Means Committee, would change that. The bill allows these transactions to happen as long as the seller provides an invoice or receipt showing how the sales tax would be absorbed into the total purchase price. The bill is sponsored by Rep. Andrew Koenig, R-Manchester.

For more information on unclaimed property, please contact Tracy King, vice president of governmental affairs for the Missouri Chamber of Commerce and Industry, at 573-634-3511 or tking@mochamber.com.