Lawmakers and business leaders say the session has been productive
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Lawmakers and business leaders say the session has been productive

Date: May 13, 2011
By: Audrey Moon
State Capitol Bureau
Links: SB 188 SB 8 HB 91 HB 162 SB 19 HB 61 HB 163 SB 1

JEFFERSON CITY - Missouri lawmakers and business interests say they stuck to a pro-business agenda as promised when the legislative session began in January.

"We are looking at this legislative session very positively for business," Missouri Chamber of Commerce spokeswoman Karen Buschmann said. "The businesses are going to get us out of this recession, and [lawmakers] made sure to give business the tools."

The General Assembly's legislative leaders echoed the same priorities for their agenda — jobs and business. 

"Our primary focus legislatively is putting people back to work," House Speaker Steve Tilley, R-Perryville, said at the beginning of the session.

Even with the largest Republican majority in the state's history, legislative and business leaders said they hoped a bipartisan effort would prevail.

House Democratic Leader Mike Talboy, D-Jackson County, said that he expected a productive, working relationship with the GOP. At the end of the session, he said it had been.

"I think it has been very cordial, with the exception of a minuscule number of flare-ups that happen when people are passionate about things," Talboy said. "I think things have been pretty good. People have been cordial inside the chamber, people are listening, respectful of each other during the debates, and we've had some good back-and-forth on things."  

Herb Johnson, secretary and treasurer of the Missouri AFL-CIO, said the political climate leading up to session had a lot of partisan spite. However, he said the General Assembly ended up having a productive session.

"Given the kind of political overtones that seemed to be the philosophy of the body politics last fall, I think there has been a lot less fervor in going forth with that legislative agenda," Johnson said. "It has been more business as usual, and that is a good thing."

"Fix the Six" — Then and Now

On the eve of the legislative session, a coalition of the state's top business operatives came together to announce six initiatives they would be backing with the hopes of mending Missouri's broken economy. Proposals were unveiled on Jan. 4, with proponents focusing on issues they said would not cost the state money.  

They got some, but not all, of the items on their list, with one vetoed by the governor after passage.

The Missouri Chamber of Commerce spearheaded the "Fix the Six" campaign, and Buschmann said their progress exceeded expectations.

"Overall, it was one of our most successful sessions," Buschmann said. 

Johnson said the AFL-CIO didn't necessarily agree with all of the initiatives introduced but that they led to healthy, legitimate conversations.

"I think that is good for anybody in the state, no matter what side of the political spectrum," Johnson said. "Emotions and haste doesn't do a lot of good for the state."

Restricting employee lawsuits: SB 188

The Missouri Chamber of Commerce, along with other business operatives, said the Missouri Human Rights Act is anti-business compared to federal law and laws of neighboring states. In a release about the the six initiatives, the chamber said Missouri sets a lower threshold for employer liability under the MHRA. The legislation would have made it harder for employees to prove discrimination in the workplace and would cap damages awarded in such cases.

The issue plowed through the House with a 107-56 vote and the Senate 26-8, but once it was on his desk, Gov. Jay Nixon vetoed the bill.

In his veto letter, Nixon said the bill “represents a significant retreat from the basic principles of fairness embodied in the Missouri Human Rights Act and erects unacceptable impediments to those victimized by discrimination and seeking to avail themselves of the act’s legal protection."

Buschmann said the veto was one of the greatest let-downs for the chamber.

"We felt there was a lot of distortion that surrounded that debate and misrepresentation, and we were disappointed that the governor followed suit and vetoed that," Buschmann said.  

Workers' Compensation reform: SB 8

One of the proposed bills would have made definitional changes to a law passed in 2005 that changed the Workers' Compensation landscape but resulted in, from the lawmakers' perspective, unintended consequences after a 2007 court decision.

The Workers' Compensation makeover would make it unlawful for employees who were hurt on the job to sue fellow employees. Under the law, only an employer is protected from providing additional benefits after workers' compensation benefits are granted, the court ruled. The warning from business is that, if not revised, an increased financial liability is posed not just for workers but also for managers and business owners for injuries that, in the past, had been covered by a state program for injured workers.

Adding to the Workers' Compensation reform, the business coalition also proposed the inclusion of occupational diseases claims in the Workers' Compensation system, preventing a worker from suing an employer for extra damage awards for an occupational disease in some cases.

The measure was one of the issues that died on the legislature's last day. 

Freeze corporate franchise taxes: SB 19

Enacted in 1914 as a temporary implement, Missouri's franchise tax coincided with a corporate business tax. Missouri was one of a few states that imposed both a corporate income tax and a franchise tax, which opponents said was a form of double taxation. 

After legislators paved the bill's way through the House and the Senate, Nixon signed a bill on April 26 to cap the franchise tax charged to some of Missouri's larger companies and phase it out over time.

Buschmann said that after 75 years of the franchise tax hanging around, Missouri businesses will now save more than $80 million.

"It was long overdue," Buschmann said.

Remove minimum wage escalator: HB 61

When Missouri voters decided to increase the state's minimum wage in 2007, they included an escalator clause that ties the wage to certain economic indicators. The current law allows an automatic inflation adjustment based on any increase in the cost of living measured by the Consumer Price Index. Business groups backed legislation to remove that escalator clause in an attempt to keep Missouri's minimum wage from exceeding federal requirements. 

The bill passed through the House 92-60 and has since been placed on the informal calendar in the Senate.

Senate Majority Leader Tom Dempsey, R-St. Charles County, said the minimum wage issue was not a priority for Republicans but that the escalator clause does create problems for small businesses during a difficult economic climate. The legislature ended its session without the issue every coming up for a Senate vote.

Johnson, however, said removing the escalator would hurt the two-thirds of Missouri families who are working at minimum wage.

"If you don't index it, then it will be frozen in time," Johnson said. "... We don't agree with that, and we never have agreed with that."

Lawsuit liability restrictions

One of the the "Fix the Six" proposals would have provided some protections for business in liability lawsuits. 

Under current law, a business can be held fully liable when only 51 percent or more at fault. The bill, termed joint and severable liability, would apportion the award among the parties found at fault determined by the degree of fault. Johnson said he doesn't think changes need to be made to current law.

"We don't agree with their positions on tort because we don't believe these lawsuits are frivolous," Johnson said.

Talboy said he had never expected the measures to go anywhere this session, and the issue didn't make much headway in the statehouse.

Unemployment insurance: HB 163 

The conversation about unemployment insurance changed after some benefits were exhausted for unemployed Missourians. Extended benefits were made available for an additional 20 weeks after the governor signed legislation on April 13 to grant extended benefits to an estimated 10,000 people.

The issue was stalled in the Senate as four Republicans held a filibuster until a compromise over federal stimulus funding could be reached with Nixon.

Sen. Jim Lembke, R-St. Louis County, said he was not trying to punish Missourians but wanted to send a message to the federal government about its excessive spending habits.  

At that point, Missouri was the only state to voluntarily opt out of federally funded, extended benefits. After an agreement was reached, however, $105 million in federal stimulus money was allocated to Missouri's unemployment fund. The legislation also reduced the state program from 26 weeks to 20 weeks.

Buschmann said it was a victory for business.

"We see this as a great win for Missouri employers and employees who depend on our insurance system," Buschmann said.

Collective bargaining: SB 1 

Missing from the business coalition's reform list of six was a controversial issue that swept the Midwest in the early spring — forcing workers to support unions. The Senate bill would have prohibited businesses from requiring employees to join a union or pay service fees to the union on the basis of employment. The movement has been coined by supporters as "right to work."

With Tennessee as the exception, all of Missouri's bordering states with "right to work" measures have higher employment rates. Tennessee, however, added jobs in 2010 whereas Missouri lost jobs, according to information from the Census Bureau cited by the bill's sponsor, Sen. Luann Ridgeway, R-Smithville.

"Every one of those 'right to work' states picked up population and has a lower unemployment rate than the non-'right to work' states," Ridgeway said on Feb. 16. "We have got to turn this situation around for the approximately 10 percent of Missourians who want to work but can't find jobs."

On March 14, the bill was heard on the Senate floor with a gallery full of union worker protesters who coughed or cackled in objection throughout the bill's debate, earning the loud reprimand of the president pro tem's gavel. 

The Senate, however, did not vote on the bill that day, and it was only placed on the informal calendar for perfection. Since then, the issue has remained relatively stagnant in the statehouse. 

Johnson said it was the reasonable lawmakers on both side of the aisle who stopped the fight against collective bargaining.

"There was not a great interest in it among members of the majority party, and for that we are very glad because it is of no value or benefit to the state," Johnson said. "Everybody knows it is nothing but a political game and usually ends up in reducing employment rather than adding it. I think a lot of folks in the General Assembly recognized that and concluded that it really wasn't anything the state would benefit from." 

Business leaders acknowledged the coalition was divided on this issue, so it was not included in their "Fix the Six" agenda.

China hub: HB 116

One of the biggest issues in the closing days involved business but also was not in the original "Fix the Six." It's the "China hub" proposal that would award up to $360 million in various business tax breaks for development of an air cargo transportation hub at Lambert-St. Louis International Airport for shipping products to and from China.

The Senate tied the measure to a package of cuts in other tax credits that would total about $1.5 billion during a 15-year period. Tax credits cost the state more than $500 million per year in lost tax revenue.

The Senate-passed plan would require legislative reauthorization of the various tax credit programs every few years. It also would cut nearly in half the cap on the state's largest tax credit program, used by developers for historic building preservation.

The House, however, refused to accept the tax-credit provisions, stalling action on the bill.

Legislative tax leaders spent the closing hours of the legislature's last days trying to work out an agreement, but the measure remain stalled.

Some legislators suggested the governor should call a special session on the issue -- an idea that was not ruled out by Gov. Jay Nixon, who had pushed for the tax-credit reductions.