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NewsBook:  Missouri Government News for the Week of January 17, 2011

St. Louis City Representative Jamilah Nasheed has been fighting an ongoing battle with St. Louis City drop outs since she was elected in 2007.

Nasheed started two connected programs called 'In it to Win' and Fresh Start Academy.

'In it to Win' focuses on recovering drop outs and Fresh Start Academy helps those drop outs get their high school diploma.

Fresh Start Academy has graduated 150 students so far and is working on graduating 100 more this year.

House lawmakers voted Wednesday in favor of legislation that cuts taxes for small businesses. This was the first bill of the year debated on the House floor, and passed 142-17.

Bill sponsor Rep. Denny Hoskins, R-Warrensburg, said the bill would help smaller businesses struggling to compete with large corporations while creating job opportunities at the same time. The legislation would entitle small business owners to claim a $10,000 tax deduction for every new full-time job created. The jobs would have to meet or exceed the county's average wage to qualify.

Opponents like Rep. Jill Schupp, D-St. Louis, spoke out against another provision in the legislation, one she compared to secession. The stipulation would require state lawmakers to OK federal mandates before they were implemented in Missouri.

The bill needs another vote before moving on to the Senate.

Lt. Gov. Peter Kinder leveled a series of charges against Gov. Jay Nixon in the formal GOP response to Nixon's State of the State address Wednesday night.

While the governor described an economy in recovery, Kinder said, "Our state’s unemployment rate is higher than the national average, too many Missourians can’t find work and the state is facing yet another round of severe budget cuts and reductions in basic services."

Kinder accused the governor of failing to take a leadership role in bringing jobs to the Missouri — and of spending his time instead on traveling around the state.

"Enough of the silence. Enough of the unnecessary trips on the state plane. Enough of the showboating and grandstanding. It’s time to roll up your sleeves and get to work," Kinder said.

In his formal State of the State address, Nixon proclaimed Missouri's economy had begun to turn around.

"There are already signs that our hard work and fiscal discipline are paying off. The number of Missourians filing new unemployment claims is down 17 percent, year over year. Personal income grew last year, and is expected to keep on growing this year. November and December revenues were up, indicating that people are cautiously beginning to spend," Nixon said to a joint session of the legislature.

Missouri's governor has proposed budget cuts exceeding nine percent for public higher education for the fiscal year that will begin in July.

Primary and secondary education would see a four percent cut under the governor's spending plan he presented to lawmakers Wednesday night. Administration officials had been warning for some time that deep cuts would have to be made in the state's budget because of reduced federal funds.

The state's Medicaid program, which provides health care coverage for the lower income, would enjoy one of the biggest increases under the governor's plan — $490 million more, or slightly less than a 7.5 percent increase.

In his State of the State address to legislators, Gov. Jay Nixon made no direct reference to the specific education cuts.  He did talk about the general cuts he has had to make in Missouri's budget during his two years as governor and the ability to avoid tax increases.

"All across state government, a leaner workforce is doing more with less. These decisions are never easy, but they are necessary. And because we've been frugal, we have money to invest in the things that matter most to Missourians: jobs, education, health care, and law enforcement," he said.

The legislature's top Republican withheld direct criticism of the governor's budget, saying he needed more time to study Nixon's proposals, but House Speaker Steve Tilley, R-Perryville, noted that the new federal health law restricts the state from making cuts in Medicaid. Medicaid coverage is a major component of the federal law's objective to assure health care coverage. State Budget Director Linda Luebbering said that under that law, Missouri would lose all federal Medicaid funds — more than $3 billion — if it reduced Medicaid eligibility.

One of the major economic development issues Missouri business groups are promoting stems from a complicated lawsuit that business interests say poses a financial risk to both workers and managers.

The case involves a state appeals court decision which held that the co-worker of an employee injured on the job can be held liable for an injury that arises from negligence.  The warning from business is that the case could lead to increased financial liability 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.

Sen. Bill Stouffer said this was not the intention of the legislature in 2005, when the worker's compensation system was amended.

"Everybody wants to take care of those who are injured, that's not the question," Stouffer said. "You have to be able to get compensation to that system, though, and not be scouting the system and gold-digging if you will."

Business representatives argue the law opens the door to lawsuits against business employees for damages currently not covered by Workers' Compensation.

On the day the U.S. House of Representatives is scheduled vote to repeal the federal health care law, the Missouri Senate passed a resolution urging Democratic Attorney General Chris Koster to join a lawsuit against the federal government's health care law.

"Missouri was the first state in the entire nation to give its citizens the right to vote on it (health care), and we received from our voters and overwhelming 71 percent majority that sent a megaphone message to Washington, D.C. that we want to make our own health care decisions, we do not want them coming from Washington, D.C.," said the resolution's sponsor, Sen. Jane Cunningham, R-St. Louis County. "While other (attorneys general) in the nation have voluntarily joined this lawsuit as plaintiffs on behalf of their citizens in their states ... our AG has not stepped in to defend these citizens."

The non-binding resolution calls for Koster to join an existing lawsuits with attorneys general from other states, team up with Republican Lt. Gov. Peter Kinder who filed a lawsuit in July or to file his own separate lawsuit. The existing lawsuits challenge the constitutionality of the health care law, passed last March, which requires all Americans to purchase health care or face penalties for non-compliance.

Just last week, the state House of Representatives passed a similar non-binding resolution, calling for action from the lieutenant governor and Democratic Gov. Jay Nixon. The Senate passed the resolution with a voice vote.

Koster has declined comment on the legislative actions.

Sen. Jolie Justus, D-Jackson County, was the only one to speak against the bill. Justus said it was a waste of time to pass a non-binding resolution to send a message to an independent branch of government and time would be better spent discussing economic reform and jobs. Regardless of Missouri's participation, the result of the lawsuit will still affect the state in the same way, she said.

"Whether Missouri gets involved in it or not, the result of the litigation will be binding on the state of Missouri," Justus said. "So for instance, if they decide that the federal mandate is unconstitutional, then Missouri's law that we passed in August of last year will stand. If they decide in that lawsuit that the federal mandate is constitutional then Missouri's law will be thrown."

The St. Louis police control bill HB 71 passed 7 - 2 and will now go to the House floor.

If passed in the House, the bill would transfer control of the police department from the state to the city of St. Louis. That city hasn't had control of its own police force for more than 150 years.

Supporters, including Redditt Hudson, the program associate for the ACLU of Eastern Missouri, said the legislation will give the control back to the people. The St. Louis Police Officers' Association opposes local control, saying the state is managing the force properly without local politicians intervening.

By a one vote margin, the Senate Rules Committee has rejected a resolution to veto a proposed pay raise for judges.

The $5 million in pay raises was recommended by the Citizens Commission on Compensation for State Elected Officials. Unless rejected by a two-thirds vote of the House and Senate within the next couple of weeks, the raises automatically take effect.

The commission's pay raise package would not take effect until the budget year that will begin July 1, 2012.

The Senate GOP leader said even if the pay raise package takes effect, the legislature still can control judicial salaries by the appropriations process that controls state agency spending including salaries.

Last week, the Rules Committee heard warnings from the Missouri Bar that low judicial salaries were causing experienced judges to leave the bench.

The top-ranking House Democrat, Rep. Mike Talboy of Jackson County, said he and other Democrats have concerns that Gov. Jay Nixon's travel spending isn't as transparent as it should be.

Talboy and House Speaker Steve Tilley, R-Perryville, say the governor's practice of passing travel costs onto state agencies needs to stop.

Tilley said former State Auditor — and current Missouri Democratic Party leader Susan Montee — also said the practice was "not appropriate."

"If you want to fly around the state, do it out of your own budget," Tilley said.

Nixon has urged state agencies to cut their own travel budgets, all the while passing the cost from flying on state airplanes onto those departments.

Nixon closed a deal for a Ford plant in the Kansas-City area with some of his travel expenses, but Tilley said the governor has also spent money previously on a sporting event. Talboy said Nixon has been doing a great job doing business in the state, however, he wants to keep track of where the money is going.

Nixon has continued to defend himself. Tuesday, he walked out of a news conference as reporters asked him for a response to House leaders' criticisms.

Tilley said he has only met with Gov. Nixon once this legislative session and it was what he described as a "cordial meeting."

Ford Motor Co. said Tuesday it would invest $400 million in its Kansas City-area plant and retain 3,750 jobs there, ending a long period of uncertainty over the company's future in Missouri.

Ford, which is moving production of the Escape sport-utility from Kansas City to Louisville, Ky., will install a new body shop and new tooling at its Claycomo facility. The company did not say what new vehicle it would build there.

Gov. Jay Nixon called the legislature into special session this summer, and lawmakers passed tax breaks aimed at keeping the plant open. Ford, based in Dearborn, Mich., could eventually get $100 million in taxpayer money.

"That hard work paid off. For thousands of employees at Ford’s Claycomo plant, and thousands more at suppliers across Missouri, this news is a big win," Nixon said. No other manufacturer besides Ford has applied for the tax breaks.

Ford Manufacturing Director Stephen Lewis said it was lawmakers' work last summer that led to Tuesday's announcement. He said the relationship between Missouri and Ford is strong.

"Tax incentives played a very important role in Ford's decision and the company's commitment to this level of investment and job retention," Lewis said at a news conference in the governor's office.

Ford spokeswoman Marcey Evans said the Claycomo plant would continue producing Escapes until the first quarter of 2012. The automaker would then retool the plant before starting production on the new vehicle. It will also continue making the F-150 pickup at the facility.

Sen. Jason Crowell, R-Cape Girardeau, voted against the tax breaks last summer. He said Ford's announcement hasn't changed his mind.

"It's one thing to stand in front of a bunch of reporters and say that you're gonna do something, and it's another thing to actually do it," Crowell said. "I stand by and will always stand by that I think the redistribution and abuses associated with tax credits need to end."