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NewsBook:  Missouri Government News for the Week of October 3, 2011

The Missouri Department of Transportation has cut nearly 700 jobs and plans to eliminate 500 more by March 2013.

MoDOT jobs are not guaranteed, according to the Missouri Highways and Transportation Commission chair Grace Nichols.

"If somebody comes along that has more skills than you have, than they get your job. It's not that they're picking on certain areas. It's state wide. Every job is available to other workers throughout the state...No one is safe," Nichols said.

Only MoDOT maintenance workers are not at risk of losing their jobs, according to Nichols.

"They're the ones that do all the hard work for MoDOT and so we didn't want to cut any of those positions because [the public] needs those people. We need the other [employees] too, but it's not quite the crisis situation as the maintenance workers are," Nichols said.

Some MoDOT employees have switched positions or have left the department since June after a five-year plan was implemented due to budget cuts, according to Nichols. 

The Southeast Missourian published an article saying there has been no progress on the Dickerson case after 8 months.

According to Stoddard County Prosecuting Attourney Russ Oliver - it’s because Nixon’s Department of Economic Development is not giving him the details he needs to develop the case.

The Dickerson case from last December involved $2 million economic development dollars for Cape Girardeau.

Governor Jay Nixon then announced the $2 million dollars through the Watch Me Smile Vision and Dental cooperative.

A week later, the Department of Economic Development revoked the funding after learning that Dickerson had lied about his criminal record on the state aid application.

The Republican Party also released a statement saying that Jay Nixon is being reckless with tax payer dollars.

This statement references a few failed economic development deals - including Mamtek and Weaver Dickerson’s Cape Girardeau Medical Clinic.

According the statement, Missouri Republicans are not happy with Nixon and claim he should be doing his homework before promising Missouri’s taxpayer dollars to questionable projects.

After the Missouri Senate launched an investigation into Mamtek's default, the Senate Governmental Accountability Committee was told Wi-Fi Sensors, Inc., a developer and manufacturer of high-technology wireless sensors in Kirksville, also missed its first payment on their state loan.

The chair of the Senate committee, Kim Lembke, R-St. Louis County, said Mamtek's default brought its attention to Wi-Fi Sensors' financial trouble.

"There has been a renewed focus on it in the light of what is going on in Moberly with this Mamtek," said Lembke. "We are having a closer look and applying more scrutiny to the different tax credit programs that we have in our tool box here in Missouri."

The company had a promise of 40 jobs and over $4 million in private investments, but now the door of the company has been shut with no jobs being created.

The committee launched the investigation Thursday by requesting necessary documents from the Department of Economic Development. Lembke said he didn't know how long the investigation will take and it depends on what the Department of Economic Development comes up with.

Sen. Joseph Keaveny, D-St. Louis City, said he was concerned about the chilling effects of the investigations.

"If there are long drawn-out hearings with a lot of fingers pointing, the fact could be to deter this type of businesses from locating in the state of Missouri," Keaveny said.

The House passed their version of the China Hub bill this afternoon. Since many changes were made, the Senate now has to decide what they are going to do with the bill.

The two options the Senate has includes bringing the entire Senate back to Jefferson City or conferencing the bill with the House.

Senate Majority Floor Leader Tom Dempsey says the Senate is waiting to figure out their next step.

"We're waiting to see what the House does and if they are to pass a bill, what it looks like, prior to us deciding how to proceed," said Dempsey.

St. Louis senator Jim Lembke reacted to the House bill by saying that it has no chance of passing in the Senate.

"If a bill comes out of the House and it doesn't include sunsets on low incomes and historics, I don't give that bill much hope in the Senate," said Lembke.

Senator Rob Mayer says the Republican Caucus will meet Tuesday to figure out what to do next.

"We'll determine how we want to move forward and get a chance to speak to House leadership about going to conference and what items we might be able to compromise on," said Mayer.

Mayer added that he was disappointed at some of the pieces of the Senate's bill that failed to pass in the house.

"At a first glace on the House version that they passed today, it seems that the many of the reasonable tax credit reform provisions that the Senate had in our bill to protect tax payers failed to survive in the House, I was disappointed to see that," said Mayer.

With Missouri General Assembly's special session already on life support, the central China cargo hub legislation was dealt another blow as the state House of Representative's took up the issue in a committee meeting, and one lawmaker declared the bill dead.

Rather than accepting debate or amendments on the divisive bill, the chair of the House Economic Development Committee shut down all talk and called for an immediate vote on the bill.

Chairwoman Anne Zerr, R-St. Charles, specifically blocked an amendment that would add sunsets, or time limits, on several tax credits in the bill, such as the historical preservation and elderly low-income housing credits. The Missouri Senate has already made it clear to the House that it does not intend to pass legislation without the sunsets on tax credits.

Zerr obstructed Rep. Jamiliah Nasheed, D-St. Louis City, from offering her amendment to add the sunsets. In a phone interview from her car, which she bolted to after the meeting adjourned, Nasheed said, "I had an amendment to offer, and that amendment was not allowed in committee. I felt like if we're going to run this government like China, then there's no need for me to be there."

Nasheed said the bill is effectively dead.

The Economic Development Committee passed the bill 21-4. Zerr said the House plans to debate the bill on the chamber floor when it meets Thursday at 9 a.m. The House Democratic leader said his party would caucus to discuss getting the bill reassigned to committee in which members would be allowed to participate.

The Missouri Senate is the fourth entity to begin investigating the failed attempt at creating jobs in Moberly, the Chinese sucralose manufacturer, Mamtek.

The company recently defaulted on it's first payment to the city of Moberly, Moberly dedicated $39 million in industrial development bonds to the project, which recently abandoned construction of their facility and laid off employees.

Standard and Poor recently downgrading the city's credit rating, the committee intends to discuss what will happen if Moberly cannot make up for the missing money. Residents of Moberly have already been affected by the change with heightened costs for loans and municipal bonds, said Sen. Kurt Schaefer, R-Columbia.

The Government Accountability Committee intends to investigate Department of Economic Development procedures to determine if there are enough safeguards in place to protect taxpayer dollars, Lembke said. The committee also wants to know how much the DED recommendation influenced the local government's decision to invest.

"It is important for us to look through the process that's in place currently in the Department of Economic Development, in their due diligence to make sure that all the T's are crossed and all the I's are dotted in the protection of all the communities in the state," Lembke said. "And that is the purpose of this committee."


Educational publisher Scholastic will close its Moberly packaging center, leaving 135 workers unemployed.

Scholastic Vice President Kyle Good said the decision to close the center is the result of the company's decision to discontinue operation of its "Back to Basics" toy business.

The center will be closed early next year, and the company will consolidate the work in its Jefferson City facility. Good said the company will add 90 permanent and seasonal jobs at the Jefferson City location and give its Moberly workers priority to apply for them.

Good also said they have a wonderful relationship with the Moberly community and they are disappointed to have to leave.

With the loss of 600 promised jobs at the Mamtek artificial sweetener factory, the town of Moberly has lost more 700 jobs within three weeks. The town's unemployment rate is at more than 10 percent now.

A legislative group pushed forward Tuesday with work to make improvements in Missouri's corrections system, starting with lowering the system's costs, improving public safety and altering policy options.

Lawmakers in Missouri Working Group on Sentencing and Corrections cited material that showed Missouri's prison population grew rapidly from 1990 to 2000. During the past five years, prison populations have slowed to a growth of 1 percent annually although spending is up 30 percent from 2000.

"I think we can improve our systems by quite a bit," said co-chairman Rep. Chris Kelly, D-Columbia.

Kelly also said he thinks other states are doing a much better job with corrections. Currently, Missouri's maximum probation sentence is five years, which is longer than most states. There is no direct correlation between long probations, high incarcerations and lower crime in the streets.

The committee members said they hope to create a bill by November and present it in legislature in January.

Two state legislators say they think adding a multibillion dollar nuclear power plant in Callaway County is exactly what the China Hub bill needs to pass.

Representative Chris Kelly says he will propose the amendment.

The provision would let AmerenUE charge customers for the financing costs of building a second nuclear power plant.

It is currently illegal in Missouri to charge customers for the plant's financing costs before construction is complete.

Kelly says this plant would create twenty times more jobs than the China Hub at Lambert International Airport.

According to Ameren Missouri Communications Executive, Mike Cleary, the construction could cost anywhere between six and eight billion dollars, depending on what technology is used during construction.

Kelly says he hopes to put the issue on the ballot this April so that voters rights are not ignored.

A spokesman for the governor’s office, Scott Holste, would not comment on the issue.

Twenty-six Southwest Missouri businesses in 16 counties don't know if their public drinking water meets state safety standards Tuesday.

Four restaurants and a child care center are among a list of violators who repeatedly failed to submit mandatory drinking water tests.

The Missouri Department of Natural Resources requires all public water systems to test for bacteria each month to prevent waterborne diseases such as E. coli.

DNR Communications Director Renee Bungart says the department can only assess fines at this time.

Although the China hub bill is facing barriers at the statehouse and Mamtek's default in Moberly is making it worse, Gov. Jay Nixon is still going to China late October.

Nixon spokesman Scott Holste confirmed the governor's October trip to China on a trade mission. The delegation will be meeting with Chinese officials and businesspeople to promote Missouri products.

Holste said the overall goal of the trip is to boost Missouri exports. He said although the United States receives a lot of imports from China, Missouri exports grew significantly in 2010.

As the fifth week of the special session reaches its midpoint, the long-debated Aerotropolis turned China hub bill has become the Missouri Export Act.

Republican Representative John Diehl said the only surviving piece of the China hub provision is $60 million in tax credits for companies that facilitate exports.

Diehl says the bill "will provide taxpayers with significant savings both immediately and in the near future."

On the first day of the special session on Sept. 6, the China hub bill began as the centerpiece of the economic development initiatives the Missouri legislature would consider to build a bridge between the U.S. and the fastest growing economy in the world, China. To make this happen, the original legislation included tax credits on exports and local properties and added incentives for warehouses.

Also, Aerotropolis proposed the tax credits to total $360 million over 15 years.

One of the primary initiatives of the China hub bill was to create more jobs for Missourians to compete in a nation where most states are ahead. According to the Bureau of Labor Statistics, Missouri ranked third-worst in job losses in 2010 with more than 55,000 Missourians unemployed since 2009. The state also has a higher unemployment rate than all but three bordering states, Illinois, Tennessee and Kentucky.

Missouri's budget director reported that state revenue collections are falling far below the original estimates upon which the state's current budget is based.

According to figures released Tuesday by Missouri Budget Director Linda Luebbering, state revenue collections grew by just 1.9 percent for the first three months of the current budget year.

That is far below the four percent increase upon which the current budget is based.  That higher estimate was agreed upon by the administration and legislative budget leaders before adoption of the current budget by the legislature.

Sales tax and income tax collections represent the largest components of state revenue collections.

The revenue collection figures are a factor in a pending lawsuit by Missouri's state auditor against the governor for his action in withholding appropriations to various state agencies including education and higher education.

Missouri's constitution authorizes the governor to withhold funds if state revenue collections fall below the estimate upon which the budget is based.

But Republican Tom Schwiech charges Democrat Jay Nixon announced the budget cuts before the budget year had begun and, thus before there were any figures on how much the state would collect in revenue.

The lawsuit is pending in a Cole County circuit court.

Missouri's treasurer is having a glorified garage sale on Tuesday in Columbia.

Unclaimed items such as coins, stamps and jewelry will be auctioned off by the state treasurer's office at the annual unclaimed property auction. Notable items this year include a baseball and photograph signed by Ozzie Smith, former Cardinal player inducted to the Baseball Hall of Fame in 2002.

Auctions since Zweifel took office have returned $90 million to owners of unclaimed property.

The state constitution requires insurance companies, public agencies and businesses to turn over property to the treasurer if there has been no contact from the client for five years. The $600 million in property maintained by the treasurer includes insurance policy proceeds, unclaimed wages, government refunds, utility deposits, cash, stocks, bonds and the contents of safety deposit boxes sold at auction.

A list of unclaimed property handled by the state treasurer is available at

Zweifel's said he is expecting 200 to 300 people to attend the auction. Last year's auction brought in $105,000, but Zweifel's said he is expecting more due to the rising price of gold.

Items can be previewed Monday night from 6 to 8 p.m. and Tuesday morning from 7 to 9 a.m. The auction will take place 9 a.m. Tuesday at the Hilton Garden Inn in Columbia.

The House and Senate scheduled sessions for later in the week during their technical sessions this morning.

The Senate will convene on Thursday and the House will meet Tuesday for a technical session.

Thursday, October 6 will mark the 30 day point in the legislature's special session. The call gives them 60 days to vote on the issues included in the call.

Last Week

A program that brings foreign investors to America in exchange for their money could be used to finance China Hub says Sen. Kurt Schaefer, R-Columbia. The EB-5 visa program allows foreign investors and their families entry into the U.S. in exchange for investments of up to $500,000 or $1 million that are in place for five years. Investors could receive residency and could eventually apply for citizenship. The company that receives the investment must create 10 jobs.

However, Schaefer voiced his concerns in a Columbia Tribune article.

“...You have to be very careful to not use Missouri taxpayer money to subsidize a Chinese investment, make them more wealthy and get American citizenship without doing much for already-unemployed workers in the St. Louis area,” Schaefer said.

This visa-for-investment program was used to fund the China project Mamtek in Moberly, according to the Columbia Tribune.

The Mamtek project is currently stalled for financial reasons.

News that EB-5 visas would be added to China Hub is a reason why the bill should move slowly, Schaefer said in the article.

“What we are finding, there are so many moving parts to this thing that have not been vetted,” Schaefer said in the article.

Gov. Jay Nixon released a statement Wednesday urging legislators to pass the China Hub bill or end the special session. The session has cost approximately $170,000 according to Nixon.

Schaefer was unavailable for comment today, but Sen. Chuck Purgason and Rep. Anne Zerr both said they were unaware of the visa program.

An aggressive and noxious weed, called knapweed is spreading rapidly beyond the roadside onto private lawns and pastures.

The weed produces an herbicide within its root system that kills nearby plants.

The Missouri Transportation Department Roadside Manager Chris Shulse says knapweed reduces the available wildlife habitat and it reduces the available forage for cattle.

The department introduced two types of weevils to solve the problems. The females of the weevils can reduce the amount of the seeds the weed produces and the root-boring weevils can actually kill the weed.

Shulse says using weevils is cheaper than using herbicide because the weevils can reproduce on themselves and the department doesn't have to keep buying them every year.

Shulse also says the weevils can spread and reach the areas where it is hard to treat with herbicide. When the weevil populations increase enough to suppress the spread of the weed, it will bring the knapweed under control onto manageable level so the department can use other methods, like herbicide to control the knapweed as well. 

The weevils were first released in Missouri in 2008 and it will take a few years for their populations to increase to make a difference, but Shulse says the bugs are playing an important role in controlling the weed.

Mamtek's default raises doubts toward Chinese business partnership just as debate about a China hub bill is going on.

While some legislators call for consideration, Economic Development Committee member Craig Redmon says an individual case shouldn't affect the plan.

He says while some individuals could take advantages of international trades, the bill assures U.S. to pay out the tax credits after the products are shipped.

Redmon says he is hoping to pass the China hub bill to promote international businesses.

This resolution would cut the power of the Missouri Insurance Exchange Coordinating Committee, a committee created by Nixon.

In this resolution the committee would not be allowed to accept grants from the federal government.

The committee is also being urged to return the $21 million in health care grants to the federal government.

In the release Jim Lembke, R-St. Louis, said voters do not want to government involved in health care.

This resolution is being sent to the Governor's office, the Missouri Department of Insurance, Financial Institution and Professional Registration, and all members of the board of directors of the Missouri Health Insurance Pool.

A St. Louis firefighter told lawmakers he can't get his kids into good public schools in his appeal to the Missouri General Assembly's Joint Committee on School Accreditation on Wednesday.

St. Louis firefighters' families are locked into an unaccredited school district; they are required to live within the city limits of St. Louis as long as they are employed by the fire department. Their options are to enroll their children in the city's unaccredited district or pay tuition for private parochial schools.

Andrew Hesse has been a firefighter in St. Louis for 12-and-a-half years and said he currently pays $20,000 in tuition a year for all three of his children to go to private school.

"What I am asking the committee to do is to please enforce the law as it is written so my kids can have a good school to go to without paying in excess of $10,000 a year to accomplish that," said Hesse. "If that's not doable, at least provide them another solution to access high quality high schools."

Hesse said he's spoken to many potential St. Louis firefighters who won't apply to work in St. Louis because of the problems with the school system.

The law Hesse refers to requires accredited school districts to accept students from unaccredited schools, sending the bill to their old district, according to the Missouri Supreme Court's 2010 decision in Turner v. School District of Clayton. However, the case is now back in the St. Louis County Circuit Court, so districts aren't accepting new students, leaving them in the unaccredited St. Louis and soon-to-be Kansas City districts.

"I'd ask that you think of the plight of these students and parents that are kind of trapped by their zip code into these unaccredited or so-called failing schools," said Joe Knodell from the Missouri Education Reform Council, "and hopefully a solution can be found for that."

The state's charter school association suggested that expanding charter schools could be the solution to the urban education crisis at the first meeting of the Joint Interim Committee on School Accreditation.

After China-based manufacturer Mamtek defaulted on its first payment on $39 million in bonds, Moberly is doing business once more with Mamtek CEO Bruce Cole.

Cole now heads Delaware-based American Surcralose Manufacturing Inc., and on Sept. 23, he signed a deal with Moberly to take over Mamtek's failed economic development project. American Sucralose Manufacturing Inc. was formed on Sept. 19 in Delaware.

Moberly City Manager Andy Morris said he is aware that Cole is involved in the new company but is still confident about the project.

"I think we have hit a speed bump - a major speed bump - and I think that we can set this back on the straight and narrow," Morris said.

As of Tuesday, the Missouri Secretary of State's website of corporate registrations showed no company by the name of American Sucralose Manufacturing, Inc.

Gov. Jay Nixon offered an official endorsement for a health care grant to implement President Barack Obama's federal health care plan in Missouri, which lawmakers argue circumvents the legislative process.

A letter Nixon sent in June endorsed the grant Missouri requested for $21 million to begin implementing a federal health care exchange.

Sen. Jim Lembke, R-St. Louis County, said Nixon is ignoring the legislative process and voters' rights.

"The governor has sought out this money, he wants to see us establishing the exchange, and he's ignoring the will of 71 percent of the voters in Missouri," Lembke said, referring to the primary election in August 2010 when voters propped up a ballot measure to "deny the government authority to penalize citizens for refusing to purchase private health insurance or infringe upon the right to offer or accept direct payment for lawful healthcare services."  

Lembke said he knew Nixon wanted to implement the federal health care plan in the state, but he was unaware of the endorsement for funding to kick of the process.

"We shouldn't circumvent the legislative process through executive order or rule to get there," Lembke said.

The governor's office refused to comment.

Some of Missouri’s public universities are waiving the admission requirement that students must graduate from an accredited high school — but it’s only temporary, Missouri's public higher education director said.

Kansas City School District 33 lost accreditation from the Missouri Board of Elementary and Secondary Education last week. This put Kansas City in the same boat as two unaccredited St. Louis school districts.

Brian Long, director of the Council on Public Higher Education in Missouri, said state universities have decided to waive the requirement in hopes that the high schools will work to improve their status with the board of education. In the meantime, admissions offices will evaluate students on an individual academic basis.

"As long as these high schools continue to work with our state department of elementary and secondary education and regain accredidation, the graduates from those high schools should not be negatively impacted," Long said.

Long said this won’t be a long-term change and if the school districts don’t turn around eventually, it will become a college admissions problem for students.

"When those schools are no longer working with the Department of Elementary and Secondary Education, in that case, students from those schools would face a real dilemma. Happily, we have not arrived at that date," Long said.

However, Missouri State University’s website states, “You will qualify for admission to Missouri State if you are (or will be) a graduate of an accredited high school.” The University of Missouri’s policy is not as strict but still limits graduates. “Graduates of high schools which are not accredited by recognized regional accrediting associations or approved by recognized state agencies are required to have a minimum ACT enhanced composite of 24.”

Governor spokesman Scott Holste said although three school districts in Missouri’s two largest cities have lost accreditation, an increasing number of their graduates are heading into higher education.

The Missouri Senate Governmental Accountability Committee has been approved to investigate the China-based company Mamtek's failed economic development project in Moberly.

The committee will examine the process used to determine which programs the government chooses as investments for the taxpayer's money, said Sen. Jim Lembke, R-St. Louis County, the committee's chairman.

Kurt Schaefer, R-Columbia, was appointed to the committee after he requested to be involved in investigating the possibility that state officials misled local leaders when they presented the deal to city leaders. Schaefer's district includes Moberly.

"Each day more and more information is unfolding when it comes to how this deal started and how it failed," Schaefer said in a press release. "It is extremely important for everyone across our state to learn what happened here so we may prevent other communities from falling victim to similar scenarios."

The company has been under a magnifying glass recently; legislative leaders said Mamtek's failure was one of the reasons the General Assembly has prevented the bill to create a trade hub with China in St. Louis from moving forward during the special session. Last year, Gov. Jay Nixon touted the benefits of the deal between Moberly and Mamtek, which was finalized in 73 days rather than the usual six months. Questions have been raised regarding Nixon's support of the Mamtek project, accusing the governor of announcing the project before doing the necessary research.

"We've got to find out: Why the fast track? What shortcuts did we take?" Lembke said. "And did that have any effect on not being able to find out everything we needed to know about this deal and why it was a bad deal for the citizens of Moberly and the taxpayers of Missouri?"

The national Republican and Democratic parties have said if Missouri does not pass a bill to change the primary date from February to March, the number of seats for Missouri delegates at the National Convention will be cut in half.

Republican Elections Committee Chairman Tony Dugger said if Missouri does not pass the bill, there will be two major consequences.

"One, that we stand the chance of losing half of our delegates to be seated at the national convention," Dugger said. "And if that happens, then two, I don't see very many presidential candidates paying attention to Missouri."

But Senate Majority Leader Tom Dempsey, R-St. Charles, is skeptical that the national parties will really take seats away from Missouri delegates if the bill doesn't pass.

"Four years ago, a threat was made to penalize the state and take away delegates," Dempsey said. "We did not follow through four years ago. Other states didn't as well, and I know there are a number of states that are keeping their primary dates the same as well."

A new, unverified company has promised to repay the City of Moberly for Mamtek's missed bond payment. After Mamtek, a sucralose manufacturing company, defaulted on its first biannual payment, the money was taken from Moberly's Debt Service Reserve Fund, according to a press release from the Industrial Development Authority.

The company, American Sucralose Manufacturing Inc., offered the city a written commitment but according to the Secretary of State's office is not even registered. According to the press release, the city is pursuing alternatives and does not expect Mamtek to resolve their financial deficiencies. The Debt Service Reserve has adequate funds to pay bondholders and the agreement with American Sucralose Manufacturing Inc. is meant to restore the funds and complete the Mamtek project.

A criminal investigation into Mamtek was announced last week by Randolph County Prosecuting Attorney Mike Fusselman, with the assistance of Attorney General Chris Koster.

"What it comes down to is we're looking at the types of representations that were made to people to convince them to part with the money to invest in the project and whether the representations made were accurate or whether they were misleading," said Fusselman.

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