This article first appeared in the St. Louis Beacon, Jan. 9, 2013 - This year’s session of the Missouri General Assembly began with a ceremonial flourish, with members of the Missouri House and Senate being sworn into office.
But in between the kind words and rows of flowers, leaders in both legislative chambers promised an ambitious agenda that includes the pursuit of tax cuts, a deep look at how the state’s higher education system is funded and an examination of how to revamp the state’s transportation infrastructure.
The first day of the General Assembly’s roughly five-month session featured the swearing in of the state’s 163 state representatives and 17 of the Senate’s 34 members. It also featured the official election of House Speaker Tim Jones, R-Eureka, and Senate President Pro Tem Tom Dempsey, R-St. Charles, to their leadership positions.
Both Jones and Dempsey made speeches providing some insight into their respective agendas. Whether by coincidence or design, the two GOP lawmakers used acronyms to sum up their plans.
Jones is angling to enact the “Triple E” agenda, which focuses on economic development, energy policy and education. Aspects of the economic development agenda include placing caps on medical malpractice claims, altering employment law standards and changing the state’s workers compensation system.
In his prepared remarks, Jones said "maintaining and creating incentive tools that work” would be critical. That refers to a long-running conflict between the two chambers over revamping the state’s tax credit system.
“Missouri has a significant number of tax credit programs – 61 in all – and it is no secret not all of these programs are accomplishing a useful goal,” Jones said. “It will be a House priority to make changes this session that encourage oversight over these programs, eliminate the credits that do not work [and] cap programs at a reasonable level to provide budget certainty.”
Jones said the legislature “must continue to explore and pursue opportunities with the Department of Energy to develop the small modular reactor industry in our state.” He also said the legislative body “must work to improve and reform our education system in general.”
“A key component of accomplishing this goal is to ensure schools are able to evaluate teacher performance, hold poor teachers accountable for their actions while rewarding the overwhelming majority of good and excellent teachers,” Jones said. “Our antiquated, overly bureaucratic education is system is the overwhelming majority of good and excellent teachers.”
Dempsey once again touched on his “BIG” agenda: “Build our infrastructure,” “Invest in education” and “Grow our economy.” In his prepared speech, he echoed Jones’ desire to curb the state’s tax credit programs.
“We award hundreds of millions of dollars in tax credits to select groups, annually,” Dempsey said. “While other areas of the budget have been pared over the past several years, these numerous programs have remained largely untouched. So, while we need new tools, we need to reduce our allocations of tax credits as well. Let’s demand that government be smaller and that we be smarter in these efforts.”
Dempsey also said “it’s time to develop a comprehensive, long-term plan that provides for Missouri’s transportation needs and enlist the public’s support for a new transportation funding package.”
“Our geographic location uniquely positions Missouri to be a hub for the movement of goods and service,” Dempsey said. “We need to build and maintain our infrastructure to capitalize on this potential.”
Dempsey also called for “new capital investment for research, classrooms, and vocational technology using existing state revenue.” But he added “we must first identify the savings that will provide a dedicated revenue stream for this effort and also prioritize projects through careful analysis.”
“When it comes to economic growth, there is no silver bullet,” Dempsey said. “The changes I have outlined thus far are part of a greater effort. As the Gateway of the West, Missouri enjoyed a global status as a trade and cultural center in the 20th century. We have seen a decline since then. If we are to reverse this trend, we must build and maintain our vital infrastructure.”
Tax cut on the horizon?
Another focus of Dempsey’s speech and a prior press conference was enacting a tax cut. Some Republicans have been floating proposals in response to extensive tax cuts in Kansas – which they say could give Kansas City-based business incentives to bolt over the state line.
In his remarks to reporters on Wednesday morning, Dempsey reiterated his desire to pair tax cuts with other actions – such as charging sales tax for online purchases and modifying state tax credits. Such corresponding moves are important, Dempsey said, to avoid some of the Kansas tax cut’s pitfalls.
“... we’re not looking at the Kansas model,” Dempsey said. “But we are competing with states that have no income tax. Income taxes are a variable. … Businesses look at the business climate. They look at the regulatory policies. They look at tax policy. They look at economic development incentives.”
“We should recognize that people who want to start a business or want to grow that business are looking at income taxes as part of that equation and that we need to respond to that,” he added.
For his part, Jones said the House would be receptive to tax cuts as well.
“I think Dempsey and many of his colleagues' plans dovetail very nicely with the House,” said Jones, pointing to legislation from Sen. John Lamping that would make numerous tax-related changes. “I think we need to start with the premise that the only way to raise revenue is not through tax increases.”
While Senate Minority Leader Jolie Justus, D-Kansas City, said she too supporting charging sales tax on Internet purchases, she added that the 10-member Democratic caucus may have different opinions on how to proceed.
“Whether or not we need to respond to Kansas is another issue altogether,” Justus said. “On my side of the state right now, the general consensus is that Kansas has been incredibly reckless – not only in the incentives that they offered, but also in their tax cuts. And the cost to attract new business to the state is going to end up being incredibly damaging, that’s the consensus of the business folks I speak to on the Kansas City side.”
“A lot of the things we’re talking about are a lot of things that don’t even have anything to do with tax policy or economic development incentives,” she added. “Sure that’s a piece of it, but we also need to talk about things like workforce development … looking at vocational technical careers and that sort of thing.”
Skepticism of Medicaid expansion
Both Dempsey and Jones reiterated skepticism of a proposal to expand the state’s Medicaid program, a facet of the Affordable Care Act that’s strongly supported by Gov. Jay Nixon and numerous health-care organizations.
Under the ACA, the federal government would fund 100 percent of the expansion from 2014 to 2016. After that, Missouri would gradually pick up a share of the cost until it funds 10 percent of the expansion by 2020. The U.S. Supreme Court decision earlier this year made expansion optional, meaning that states could opt out.
Supporters argue that the move would provide an economic jolt and provide access to health care to thousands of Missourians. But Dempsey once again expressed doubts whether the federal government could follow through in paying for the expansion.
“They have long-term budget difficulties that need to be addressed,” said Dempsey, referring to the federal government. “And they’re telling us under all of these circumstances that are taking place on a federal level that they can support 100 percent of the Medicaid expansion and we will only be obligated for 10 percent after that. The rhetoric does not meet the reality.”
Asked if the expansion would even be debated on the Senate floor, Dempsey said “if those concerns that I have can be addressed, we do have a five month legislative process.
“If the federal government demonstrates that they can make some very difficult budget decisions and responsible decisions that may give our members greater confidence, we make take another look at it,” Dempsey said.
While Jones said he had asked three Republican lawmakers to look at the issue, he said “we are likely not very interested in expanding eligibility.
“We would be interested to see if we could obtain additional funding for those who truly need it, the ones that Republicans have supported – the elderly, children and the disabled,” Jones said. “Those are the populations we will continue to work with.”
Justus though said rejection of the Medicaid expansion would be a missed opportunity for the state, noting that “it’s going to move forward with or without Missouri.”
“I believe that the federal government has made this the law of the land. The courts have upheld it. And the recent election has put us on track where the Affordable Care Act is the law of the land,” Justus said. “And the Senate Democrats’ position is the expansion of Medicaid is not only necessary, but it’s also going to be good for the state. It’s going to be a job creator that is unprecedented. And so, it’s something that we’re looking forward to continuing to have the conversation with our Republican colleagues.”
House Minority Leader Jake Hummel, D-St. Louis, concurred with Justus, adding that not expanding Medicaid would be akin to sending the state’s money elsewhere.
“Other states are going to get this money if we don’t get it,” Hummel said. “These are our tax dollars that we are already sending out. I understand the argument that Congress is not paying the bills. I believe the Congressional Budget Office when they passed the Affordable Care Act said in the long run this was going to save the government money.”
