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NewsBook:  Missouri Government News for the Week of March 24, 2014

Sen. Will Kraus, R-Jackson County, shelved his effort for Senate passage of a compromise income tax cut bill that would meet demands by Gov. Jay Nixon to avoid a veto.

On Wednesday, March 26, Kraus withdrew his compromise proposal and offered a reduced tax-cut bill that does not include provisions sought by the governor.

That plan won quick first-round approval in the Senate.

After extensive discussions with the governor's office, Kraus had presented to the Senate a plan that would have delayed income tax cuts until the state could meet the legal requirements for minimum amount lawmakers are supposed to be appropriating for local public schools.

Because of flat tax collections, state appropriations now are more than $500 million below that minimum legal requirement.

Kraus' plan also included the governor's demand for cuts in tax breaks for real estate developers.

But the compromise approach met immediate opposition when it was presented to the Senate in early March.

Republicans argued Jay Nixon would veto the bill anyway and that the Senate should pass what it thinks is the best tax policy.

With solid Democratic opposition along with resistance from his own party, it was not clear if Kraus had the votes to get his compromise plan passed or if it even could come to a vote.

The plan approved Wednesday by the Senate drops the provisions making income tax cuts contingent upon large education funding increases and real estate developer tax break reductions.

The Senate plan also is only about one-half the size in tax cuts as Kraus's original bill.

Legislative staff estimate the new bill would cost the state more than $600 million per year in lost taxes when fully implemented. The original bill had a price tag of nearly $1 billion.

Like the original bill, the plan given first-round approval by the Senate would phase in income tax reductions with a one-tenth of one percentage point drop in the income tax rate each year there had been significant tax collection increase above prior years.

When fully implemented, the measure would drop the tax rate for the highest level from six percent to 5.5 percent.

The bill also contains a partial exemption of business income from the personal income tax.

The bill faces one final, roll-call vote in the Senate before going to the House.

About a thousand labor union workers rallied at the Capitol to pressure legislators not to pass what supporters call right-to-work legislation.

Several state government officials spoke about the importance of not making Missouri a right-to-work state, including Governor Jay Nixon.

"This latest attempt to make Missouri a right-to-work state is unnecessary and misguided," said Nixon.

Right-to-work legislation would remove the requirement for workers to pay union fees, or belong to a union in order to keep their employment.

"Right-to-work is wrong and it would move our state backwards," Nixon said.

While right-to-work legislation has been sponsored by Republican legislators, but not all Republicans agree.

Another speaker at the rally, Rep. Anne Zerr, R-St. Charles County, said she is also against passing right-to-work legislation.

"As chair of the Economic Development Committee and as a Republican and pro-business you might think that I would be anti-labor. But you know what? Working with labor is good business," said Zerr.

There are several right-to-work bills that have been filed for this legislative session.

Supporters of right-to-work say it would give workers more freedom of choice in their employment expenses and that it would make Missouri more competitive with right-to-work states.

Jeffrey Ferguson became the fifth person in the past five months to be executed in Missouri.

Ferguson was put to death shortly after midnight Wednesday morning, March 26. He had been convicted of the murder, rape and kidnapping of a teenage girl in St. Louis in 1989.

Five hours before the execution, Gov. Jay Nixon issued a statement that he had Ferguson's clemency petition.

"Kelli Hall was only 17 when she was abducted from her workplace, raped and brutally murdered. Her life, so full of promise, was brutally taken from her and her family," Nixon was quoted as saying in a written statement.

The pace of Missouri's executions has accelerated after the state switched the drug used for executions. Demands by the European manufacturer of the previous drug used in a three-drug method had demanded the state stop using its chemical for executions.

Some legislators and attorneys for condemned inmates have criticized the refusal of the Corrections Department to disclose the name of the company or person producing the execution drug.

They argue that by keeping the producer secrete, there is no assurance that the drug does not contain chemicals that could cause pain and suffering.

The original source of pentobarbital stopped providing it to the state after sources revealed the company's name.

By a straight party-line vote, Missouri's House rejected Tuesday, March 25, a budget proposal to expand Medicaid coverage for more lower-income adult Missourians.

The vote came just one day after a group of GOP senators vowed they would block any effort in the Senate to raise eligibility of Medicaid to adults earning up to 138 percent of the federal poverty level.

The House vote came on an amendment to the Social Services Department's budget to had authorization for the agency to spend $1.6 billion in federal funds that are available to finance the expansion.

The amendment was defeated 50-98.

Supporters argue expanding Medicaid would provide coverage for about 300,000 Missourians with the federal government picking up most of the cost.

However, Republican critics have warned there is no guarantee that Congress might in the future require a higher contribution by states that had expanded Medicaid coverage.

The Medicaid program is part of a $26 billion budget for the budget year beginning July 1 that was given first-round approval by the House Tuesday.

The budget includes Gov. Jay Nixon's proposal for a $278 increase in the School Foundation Program that provides state funds to local public schools, but with a catch.

Republican legislative budget leaders have argued the governor's education funding increase is based on an unrealistically high prediction of tax collection growth.

So, the House-passed plan would make $156 million of the education funding increase contingent upon the state actually experiencing higher revenue collections than legislative budget leaders have predicted.

One change in the House Budget Committee plan made by the House would prohibit the Education Department from spending any federal or private grant funds to implement or support Common Core Standards.

Critics have charged the effort to establish national standards for primary and secondary education interferes with local control over public schools.

The chair of the Education Appropriations Committee - Rep. Mike Lair, R-Chillicothe -- charged that the House amendment was simply an effort to send a political message because, "there are no grant funds associated with Common Core coming to the state."

State Auditor Tom Schweich reported Tuesday, March 25, that tax credits for development of historic buildings had cost the state $1.1 billion in the past decade.

Currently, the tax credit program is capped at $140 million per year. But even if that were cut nearly in half, Missouri still would be the top state in the country in tax breaks for renovating historic buildings.

Schweich's audit suggested capping tax credits awarded for expensive projects that likely would have been pursued without tax credits.

The audit cited one applicant who got tax credits for renovation of a single apartment residence that included a private elevator, a roof-top garden and a movie theater.

"If the purpose of a tax credit is to give somebody incentive to do something they wouldn't otherwise do, we question that motive when you're talking about high-end residential property," Schweich said. "Most of the people who are renovating these probably would do it anyway."

But one of the legislature's leading defender of tax credits for historic preservation said the program should not be changed.

"The tax credit, especially in the area I represent, is working wonders," said Sen. Jamilah Nasheed, D-St. Louis. "We have situations where vacant abandoned buildings occur block to block. Now we have nice, affordable homes where people can live in and I think at the end of the day it changes the face of communities throughout not just the city of St. Louis, but throughout the state."

Schweich, however, stressed he was not calling for elimination of the tax credits for historic preservation.

"Without this program there would be hundreds of buildings either vacant or demolished that are now functional," he said.

But the state auditor said the program needed to have more oversight by the state.

Gov. Jay Nixon repeatedly has urged legislators to cut back on tax credits for real estate development during the past few years. His proposals, however, have died in the legislature where Nixon's ideas have met stiff opposition in the House.

The filing deadline for the August primary closed at 5pm Tuesday, March 25, without a single Democrat filing to challenge the re-election of GOP State Auditor Tom Schweich.

It is not entirely a free pass. Candidates for both the Libertarian Party and the Constitution Party filed for the office.

Schweich is seeking his second term as state auditor.

The other major development in the last day for candidate filing was not a complete surprise.

House Speaker Tim Jones did not, as he had announced earlier, file for the eastern Missouri Senate Senate seat being vacated by Sen. Brian Nieves, R-Franklin County.

Nieves had withdrawn his candidacy filing earlier amid speculation that Jones would step in.

But in the meantime, Rep. Dave Schatz, R-Franklin County, filed for the seat and promptly contributed $250,000 to his own campaign followed 11 days later by another $100,000 contribution to his own campaign.

Jones, R-St. Louis County, has proclaimed his interest in running for a statewide office in 2016 -- either attorney general or secretary of state. But because of legislative term limits, he cannot run for his current House seat.

With the filing deadline now passed, Jones will be out of state office for the nearly two-year period leading into the 2016 elections.

A group of five GOP senators proclaimed Monday, March 24, that they will block any efforts to expand eligibility for Medicaid coverage for lower-income adults in the remaining weeks of the 2014 legislative session.

"This is done. It's not happening. Go find something else to do," said Sen. John Lamping, R-St. Louis County.

The announcement rejecting Gov. Jay Nixon's proposal was not a complete surprise. In early February, the Senate had defeated the Medicaid-expansion plan on a straight party-line vote with not one Republican supporting the measure.

The Feb. 5 vote was on an amendment to a bill that would restructure the Medicaid system. The amendment would have implemented the governor's call to expand eligibility for Medicaid health care coverage to adults earning up to 138 percent of the federal poverty level.

Last year, efforts to expand Medicaid coverage were shelved after Senate GOP leaders said the issue would not pass their chamber.

Opponents to the expansion have argued there is no guarantee the federal government would stick to its promise to require only a small match in funding from the states in future years.

In the House, that chamber's Governmental Oversight Committee chair -- Rep. Jay Barnes, R-Jefferson City -- has been pursuing a plan that would combine Medicaid expansion along with other Medicaid structural changes pushed by Republicans including co-pays, privatization of some services and penalties for unnecessary use of medical services such as emergency rooms.

On Tuesday, March 25, the House rejected a Democratic amendment to the budget to provide funds for the Medicaid expansion without any of the structural changes pushed by some Republican lawmakers.

Last Week

Gov. Jay Nixon signed a measure into law Wednesday, March 19, that will limit the price of oral chemotherapy for Missourians.

Rep. John Diehl, Jr., R-St. Louis County, said this measure would make more effective treatment available to more people.

"Anything we can do to try to help make their treatment easier, more effective, is a good thing," said Diehl.

The new law caps the price of chemotherapy pills to $75 as starting in January 2015.

Oral chemotherapy is more convenient to patients and doctors because it can be taken at home without supervision.

Over the last few years, this kind of legislation has failed due to fear over insurance premium increases.

Fifteen Republican lawmakers voted to uphold Gov. Jay Nixon's veto of a controversial tax cut bill last September.

Conservative special interest groups attacked the lawmakers for their vote, calling them the "Flimsy 15."

With less than a week left for candidates to file, one lawmaker now has a primary challenge.

Mike Lind filed to run against Rep. Lyle Rowland, R-Cedarcreek, in the August primary.

Rowland said he was not surprised by Lind's challenge.

"I expected him to file again this year and when he didn't on the first day, I thought 'well maybe he won't file,' but I kind of expected that he would," Rowland said.

Lind has filed to run against Rowland in 2010 and 2012.

In 2010, Rowland narrowly defeated Lind by a 42-40 margin, but Rowland coasted to victory in 2012 by a 69-31 margin.

Twelve of the 15 Republicans who voted against overriding Nixon's veto are running for reelection.

Rowland says he does not know if conservative groups will pour money into Lind's campaign.

"The other groups may see that he has filed and they may contact him and they may push money his way to try to get rid of me," Rowland said. "If they push a bunch of money into his campaign, I always thought that'll help the economy in my district."

An advisor for the Missouri Club for Growth said his group will not discuss their plans for the primary season until after filing closes.

Candidates can file to run for office up until 5 p.m. on Tuesday, March 25.

A non-partisan research think tank released a study showing Missouri has the 14th highest state and local sales tax in the nation.

The Tax Foundation's study ranked states across the country based on state and local sales tax rates.

Conservative interest group, Americans for Prosperity, released a statement attacking state leaders for attempting to hike up local taxes each year.

"The problem Missouri has is that local government's think it is necessary to put tax hikes on the ballot every April, ratcheting up the burden on hardworking Missourians," the statement read. "And, discouraging families from relocating to our great state."

Neighboring states like Kansas and Illinois rank worse than Missouri, and Arkansas ranks the second worst in the nation.

Despite an uproar from conservative special interest groups in September 2013, none of the lawmakers who upheld Gov. Jay Nixon's veto of a controversial tax cut bill will face a challenger in their primary elections. 

Fifteen Republican lawmakers voted to uphold Nixon's veto of the tax cut bill last September, and of those 15, 13 are eligible to run for reelection.

Rep. Mike Thomson, R-Maryville, will not run again due to term limits and Rep. Kent Hampton, R-Malden, has decided not to run for reelection.

Republican lawmakers who did vote to override Nixon's veto, however, are facing challengers in their races.

Meanwhile, five Democratic lawmakers, Reps. McNeil, Peters, Gardner, Hubbard, and Carpenter are facing primary challengers of their own.

Candidates who want to file for office in Missouri must do so by 5 p.m. on Tuesday, March 25.

Two measures in the Missouri House would require schools to allow home-schooled students a chance to participate in school athletics.

Eva Jones,  a home-school sports advocate, said she hopes the bill passes sooner rather than later because she wants her daughter to be able to participate in her town's athletic program.

Rep. Elijah Haahr, R-Springfield, said he wants to give home-schooled students an opportunity to try out for public school athletics in the districts where they live.

Jason West, Communications Director for Missouri State High School Activities Association (MSHSAA), said their main concern is maintaining a level playing field for everyone participating in school athletics.

He said many MSHSSA schools said representing the school is a privilege, not a right. West said the biggest concern member schools have is making sure home-schooled students have the same standards as students in the member schools.

Haahr and Jones agree home-schooled students in the northern part of Missouri do not have many opportunities to participate in sports.

Jones said the measures would be beneficial to home-schooled students.

"Home-schooled students would have access to their local schools athletic and competitive activities without giving up their home schooling," Jones said.

The measure was heard by the  House Education committee and needs to be voted out before heading to the House floor for further debate.