Education, infrastructure among key legislative issues

The Springfield Area Chamber of Commerce and the Missouri Chamber of Commerce and Industry are encouraging lawmakers in Jefferson City to make business development a key priority in 2013.

According to one local state senator, Jefferson City legislators are receptive to the issues business groups have deemed most important since session began Jan. 9.

Sandy Howard, vice president of public affairs for the Springfield chamber, said the local agenda calls for action in three areas: improving the business climate; creating jobs and growing the economy; and strengthening education and the workforce in the area.

Priorities for the state chamber include: Made in Missouri legislation to encourage Missouri manufacturers to produce items sold outside of the state; reforming Missouri’s workers’ compensation system to cover occupational diseases; fixing the state’s ailing Second Injury Fund; reducing Missouri taxpayer liability with unemployment insurance; and aligning Missouri’s Human Rights Act with the federal law to reduce business exposure to lawsuits.

Injury fund and tax credits
Fixing the state’s ailing Second Injury Fund – a disability support system utilized by Missouri workers and employers – is a priority for both the state and Springfield chambers.

On Jan. 11, Missouri State Auditor Tom Schweich released a report stating the fund had unpaid liabilities of $28.1 million. He recommended a remedy of increasing the 3 percent surcharge to 7 percent for one year, and then dropping it to 5 percent in subsequent years to meet its obligations.

Howard said making the fund solvent is an example of the work legislators need to do in order to improve the local business climate. She also pointed to the state’s contentious state tax credit programs as key to job growth in 2013.

In July 2010, Gov. Jay Nixon established the bipartisan Missouri Tax Credit Review Commission to review the effectiveness of state tax credits. The group recommended elimination of 28 mostly smaller programs, but after two legislative sessions ended in stalemates, Nixon reconvened the group in September. Last month, the commission raised its previous cap recommendations on historic preservation tax credits to $90 million from $75 million – against a legislated cap of $140 million – and on the low-income housing credit cap to $135 million from $80 million – against a cap of $195 million.

In fiscal 2012, the 61 tax credits cost the state $629 million, the most of any fiscal year.

“We encourage prompt action to review tax credit programs and make sure state resources are being used effectively. That has been a road block for several years, and we hope steps will be taken this year to eliminate that road block and allow for more proactive economic development legislation,” Howard said.

For example, Howard said the chamber supports implementing and funding the Missouri Science and Innovation Reinvestment Act, which was approved in 2011 but was ruled unconstitutional because the attached Aerotropolis bill failed to pass in special session. In addition, she said establishing an “angel” tax credit could help foster entrepreneurship and innovation. Citing similar efforts in Fort Collins, Colo., she said the angel credits could offer incentives for investments in high-tech startup companies.

Transportation and education
On Jan. 4, state Sen. Bob Dixon, R-Springfield, hosted a preview of the upcoming legislative session at the Springfield chamber offices for roughly 100 business and community leaders. Dixon said he felt legislative leadership was receptive to business issues. Specifically, he said improvements to infrastructure and education were among the Republican majority’s top priorities this year. He said state lawmakers should work to seize upon an opportunity to reissue some old bonds to address funding needs.   

“There is a real opportunity for us in terms of bonding because we are very close to paying off some bonds that were initially issued during the Bond administration,” Dixon said.

Howard said the chamber thinks that could be a wise move.

“We think the prudent use of bonding would be helpful in addressing some of the state’s urgent capital improvement needs – specifically, infrastructure improvements both in transportation and higher education,” Howard said.

She said higher education funding in Missouri is poor compared to other states, and funding needs to turn around to improve the quality of the state’s workforce and its ability to attract out-of-state employers. According to the Missouri Department of Higher Education, Missouri ranked No. 44 nationwide in per capita appropriation for higher education spending of $834 million in fiscal 2012.

“That does not bode well for our future prosperity,” Howard said.

The Blue Ribbon Citizens Committee on Missouri’s Transportation Needs released a report Jan. 8 that suggests Missouri needs an additional $600 million to $1 billion annually to improve the state’s transportation system. The 22-member bipartisan group sought input for three months last year from various stakeholders, but it did not specify where the money should come from. Instead, it suggested multiple funding sources such as toll roads and bonds or fuel tax increases.   

Income tax and Medicaid
Another key priority for the Missouri chamber is reducing the income tax rate to become more competitive with neighboring Kansas, which last year dropped its top tax rate to 4.9 percent from 6.45 percent. In his State of the State address last week, Kansas Gov. Sam Brownback proposed further state income tax reductions to 3.5 percent in the top bracket.

Missouri has 10 individual income tax brackets, with the top tax rate of 6 percent hitting workers who earn more than $9,000 per year, according to TaxFoundation.org. Income tax reformers recommend widening the tax brackets so the highest rate wouldn’t be applied until higher wages are reported.

“This tax relief would provide money employers could use to hire additional workers and expand,” Missouri Chamber President Daniel Mehan said in a news release.

Dixon said the big fight in 2013 would likely concern an optional expansion of the state’s Medicaid program as part of national health care reform. Missouri is slated to receive billions of dollars in federal funds to support expansion of Medicaid, but Dixon said Republicans are wary of the state’s financial burden should it agree to expand Medicaid roles.

“There is not an appetite to expand Medicaid at this point,” Dixon said.

In his Jan. 28 State of the State address, Gov. Jay Nixon is expected to express his support of expanding Medicaid under the American Care Act, and state Rep. Charlie Norr, D-Springfield, said he’s behind the governor’s efforts.

“In 2005, Gov. Blunt took 150,000 people off Medicaid in order to balance the budget. At that time, for every 33 cents we’d spend, we’d get a dollar from the federal government,” Norr said, adding when the state reduced its rolls, other states benefited from the available funds. “We really need to think about these things. Other states will be getting healthy and prosperous because they’ll take care of their people.”

A report by the nonprofit Kaiser Family Foundation estimates the federal government would spend $17.8 billion in Missouri through 2022, while Missourians would be expected to shoulder $1.6 billion during that period.