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NewsBook:  Missouri Government News for the Week of January 16, 2012

The House Government Oversight Committee heard testimony from three key witnesses on Thursday about the failure of Chinese company Mamtek's venture in Moberly.

The first witness was Jeff Wise, Mamtek's former patent lawyer since 2006. He testified via teleconference from Los Angeles and explained his knowledge of Mamtek and its factory in China. Wise told the committee he visited the factory multiple times between 2006 and 2009, but he said he didn't know when the factory was actually in production during that time.

Committee Chairman Jay Barnes, R-Cole County, said there were areas where this could have been prevented.

"The trick is finding out a policy solution that doesn't throw out good projects in the effort of preventing bad projects," Barnes said.

After the hearing, Barnes also said he thought the committee now has a general idea of all the facts and that they might not need to question Mamtek's CEO, Bruce Cole.

"Our goal as a legislative committee is to figure out what we can do to prevent this from happening in the future. I'm not sure what exactly Bruce Cole adds to that question," Barnes said.

The Missouri House of Representatives approved legislation to add an amendment to the state Constitution to cap future state spending on Thursday.

Rep. Eric Burlison, R-Springfield, sponsored the constitutional amendment, which was the first bill passed by the House for the 2012 legislative session.

If voters approve the measure later this year, there would be a cap on annual spending increases at 1.5 percent of the collected revenue from the previous year. This would be in addition to adjustments made by changes in inflation and the population, which one analyst estimates could be as much as 7 percent.

At the House Budget Committee hearing last week former House Budget Committee Chair Rep. Allen Icet, R-St. Louis County, traveled back to the Capital to support the bill, to explain why the bill would help with the booms and busts that have become common in the state budget.

"When the state of Missouri has good years from a revenue standpoint that there is a limitation put in place so that the General Assembly simply cannot spend every dime knowing full well if nothing else that is simply not sustainable," Icet said.

Rep. Jeanette Oxford, D-St. Louis City, added "Let's not constantly amend the Constitution to try to solve future problems, but instead elect good people to make good decisions about the future, when the future gets here."

The bill passed 105 - 54 and the issue now moves to the Senate and as of the bill's passage through the House, no Senator had been identified as the Senate handler.

If the Senate passes the bill, Missouri voters would see the issue on the 2012 ballot.

The Senate Ways and Means Committee considered legislation Thursday to scale back Missouri's tax credits, after the issue derailed September's Special Session.

Four bills were presented to the committee that would pear down tax credits in Missouri. Supporters of tax credit reduction said their measures would save the state money and free up revenue for other programs. In 2013, the state is expected to redeem $685 million in tax credits.

During last year's special session, changes to the state's tax credits failed to pass as the House and Senate could not agree on the program's sunsets, or expiration dates for programs unless the legislature reauthorizes them. Sen. Will Kraus, R-Jackson County, sponsored one of the bills heard Thursday.

Kraus's bill would eliminate certain tax credits and apply the savings from the programs to lower the corporate income tax rate. Kraus said he hoped their would be enough additional revenue to get rid of the corporate income tax all together.

"This would make Missouri a much more business friendly place for businesses to come. It eliminates the picking of winners and losers by different tax credits," Kraus said.

The measure would lower the low income housing and historic preservation tax credits to 25 percent of their current value by 2016. The low income housing credit costs the state $60 million a year, while the historic preservation costs $140 million.

Members of the Senate Governmental Accountability Committee questioned representatives of the Department of Economic Development Wednesday in a continued investigation of the failed Mamtek Moberly project.

Chairman Jim Lembke, R-St. Louis County, said it is necessary to look at the Mamtek project and create a mechanism to stop the same situation from reoccurring.

"The bottom line, for me, is, how do we keep this from happening to another community," Lembke said.

Sallie Hemenway, Business and Community Services Director, said the department carried out due diligence throughout the process of vetting the China-based company, and continued to work with Moberly, even after the community moved forward and accepted Mamtek's proposal.

Lembke said he will move quickly with the committee's investigation and plans to hold additional hearings and discussions with the DED.

"I'm not satisfied the DED has enough protections for citizens and there seems to be a lot of circular arguments and pointing of fingers," Lembke said. "I want them to be frank and honest with us, if they made a mistake."

The day after Gov. Nixon proposed major budget cuts to balance the state's budget, lawmakers overwhelmingly passed a resolution to reign in state government spending.

The resolution will head to the voters if the Senate passes it.

"This bill is really about, in good years, when we have a budget surplus, let's put that money aside," said Republican Representative Eric Burlison, who sponsored the resolution.

In fiscal years when the state's revenue is more than 1.5% of the state's expenses, the resolution would require any excess money to be put toward debt reduction and into reserve funds.

The formula used to calculate the money given to public schools is incredibly complicated; balancing enrollment, local tax revenue and benchmark wealth to determine each district's funding. The House Education Committee delayed a vote to give members time to further study and understand the formula and the challenges it is facing.

The problem being addressed is that the current statute doesn't include how to deal with a lack of significant funding increases.

Senate Education Committee Chairman David Pearce, R-Warrensberg, and House Education Committee Chairman Mike Thomson, R-Maryville, are sponsoring separate bills to determine how funds would be distributed when the government does not have enough money to meet the formula's appropriation increase requirements.

Legislators are under a time crunch to pass a provision to this formula because of concerns that drastic changes in funding could occur in the beginning of the next fiscal year.

The House committee will meet again in two weeks for executive session. The Senate committee has not set a date to vote.

Due to a funding cut to the Missouri Department of Transportation, lawmakers are discussing on how to fund the repair of I-70, an interstate that is long overdue for major repairs. One proposal to produce the necessary funds is to add a tollway along I-70 between Kansas City and St. Louis.

Ron Leone was speaking on behalf of gas stations, convenience stores and truck stops in Missouri including those located along I-70. Leone said that he acknowledges the need for a better road system, but he believes that a tollway is both a bad idea and bad public policy.

"First and foremost, it must, must go to a vote of the people," Leone said. "You can not use PPPs (public-private partnerships) as a loophole to avoid a vote of the people."

Leone explained that a public-private partnership would allow private companies to earn a profit on public assets, something he believes to be bad public policy.

In a State of the Judiciary Address to lawmakers Wednesday, Chief Justice Richard Teitelman voiced support for legislative efforts to reduce or eliminate prison sentences for some first-time, non-violent offenders.

"I support your efforts to help make sentencing practices more cost-effective, helping Missouri to become...both tough and smart on crime," Teitelman said in his speech to a joint session of the General Assembly.

For the last few years, chief justices have urged lawmakers to revise Missouri's sentencing laws.

On Tuesday, those efforts won the endorsement of Republican House Speaker Steve Tilley.

"Many time you put non-violent offenders in jail, they become violent by the time they leave," Tilley said.

"I think community service, I think ankle bracelet type monitoring is a much better use of taxpayer dollars."

The legislative panel reviewing criminal sentences is expected to deliver its recommendations later this month.

The Senate General Laws Committee heard public testimony on two similar bills that would make it illegal for employees to be forced to join unions.

One of the bills is sponsored by Senate President Pro Tem Rob Mayer, R-Dexter, who said he doesn't feel like it's a waste of legislation.

"I believe this is the single most important piece of legislation that we, the General Assembly, could pass to put Missouri on a solid path to economic recovery.

The other bill is sponsored by Sen. Chuck Purgason, R-Caulfield.

The largest difference between the two bills is that Mayer's bill would require voter approval while Purgason's would require the Governor's final approval.

Public supporters say employees shouldn't be forced to pay money to a union that supports ideals they don't support.

Opponents of the plan say there is no evidence that proves the state would see any economic growth through this plan.

Public universities would bare the brunt of Missouri's budget shortfall under Democratic Gov. Jay Nixon's 2013 budget proposal presented Tuesday during his State of the State address.

Nixon's budget would cut all funding for four year institutions by 15.1 percent from last year's budget. It would be the largest percentage cut to Missouri's public universities in the past two decades. Senate Appropriations Chair Sen. Kurt Schaefer, R-Columbia, called the cuts "unacceptable."

"Can public universities survive with that kind of cut?" Schaefer asked.

A top Democrat on the House Budget Committee Rep. Sara Lampe, D-Springfield, said she was concerned about the universities. Lampe said she did not know how the colleges would be able to survive such a cut without raising tuition.

In an hour long speech Nixon made only one brief reference to the higher education cuts.

"I am calling on our colleges and universities to continue to look for more ways to cut overhead administrative costs and run smarter, more efficient operations. And while leaner more efficient operations are essential, higher education must continue to adapt to the modern economy," Nixon said.

MoDOT director Kevin Keith told the Joint Transportation Committee that the 60-year old I-70 would become a "gravel parking lot" if nothing is done to address the road's aging infrastructure.

Under MoDOT's plan a group of private companies would put forward the initial funding for the project and would be paid back by way of tolls paid by I-70 users.

"The option to do nothing with 70 is not there," Keith said.

The proposed toll could reach ten to 15 cents per mile for cars traveling along the highway and double that amount for trucks. The toll would cost about $30 for a car traveling across the state. It would affect all I-70 users except use in urban St. Louis and Kansas City, where MoDOT is not currently planning repairs. The project would be completed in six to eight years under MoDOT's estimate.

Keith said the plan to repair I-70 would create thousands of jobs across the state, estimating that if $2 billion were invested in the highway that 6,000 jobs would be created per year.

Some lawmakers, however, said the toll road could end up costing the state jobs particularly in the trucking industry. Rep. Tim Meadows, D-Imperial, said the increased user cost on I-70 would force companies to consolidate their shipments and take away trucking jobs.

"Those are the guys that are going to be taking it on the chin," said Meadows, a former truck driver.

Missouri's Supreme Court has rejected validating the redistricting maps for this year's congressional and state Senate elections.

With the congressional maps, the state high court ordered a lower court to hold further hearings on a challenge that the map violate a requirement for compactness. In an unanimous decision, the court gave the lower court until February 3 to make a decision -- in order to give the legislature time to come up with a new congressional district layout, if necessary.

The plan, approved by a Republican-controlled legislature over the Democratic governor's veto, effectively eliminates the district of Democratic Rep. Russ Carnahan in St. Louis in order to meet the requirement for the state to eliminate one of its districts.

With the state Senate map, the court completely rejected the pending plan.

Without a dissenting vote, the Supreme Court threw out the state Senate map that had been drawn by a panel of appeals court judges.

The panel actually issued two maps. The first, the court found, violated the constitution's restriction on splitting counties between state Senate districts.

The appeals court panel had filed a second map to address that problem. But the Supreme Court ruled the panel had now power to rescind its original map.

The court's decision throws the issue back to a several-month process that could extend beyond the August primary.

Last Week

A bill restricting employee lawsuits vetoed by the governor last year has been put at the top of the Senate's agenda for the 2012 legislative.

The measure is one of the first three bills reported out of committee for full Senate debate.

The proposal, strongly backed by business organizations, would impose restrictions on discrimination lawsuits by fired workers. It would require an employee to prove that discrimination was the reason for termination. The measure also would impose limits on discrimination lawsuit awards.

"Missouri has made itself an island among Midwestern states for jackpot discrimination payouts," said Missouri Chamber of Commerce President Dan Mehan.

In his veto letter of a similar bill in 2011, Gov. Jay Nixon charged the measure was "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."

The new congressional districts came under fire Thursday as the Missouri Supreme Court considered a challenge to the new district lines.

The state's high court heard oral arguments questioning the legality of the districts drawn last year by the Missouri General Assembly. The newly drawn map essentially eliminated the district currently held by US Democratic Rep. Russ Carnahan after Missouri's population grew at a slower rate compared to the rest of the nation.

The Missouri Constitution requires that congressional districts must be "composed of contiguous territory as compact and as nearly equal in population as may be." Attorney Gerry Greiman represented those challenging the new map and told the Supreme Court the new districts are not "compact" and were drawn for the benefit of the Republican party.

"The deliberate skewing of the electoral playing field for partisan advantage is precisely what the plaintiffs allege here," Greiman said.

But Solicitor General James Layton for the Attorney General, however, argued that politics does play a role in shaping congressional districts.

"It has always been about more than population and compactness," Layton said.

Political priorities were not the only argument the Supreme Court heard. Layton defended the new districts and said there was no standard to define the "compact" districts required by the Constitution. Attorney Edward Greim represented the General Assembly in court and said the standards for districts the plaintiffs wanted were impossible.


Missouri's public universities would be required to accept transfer credit from sister institutions under a plan presented Wednesday in the Senate Education Committee.

As part of an effort to boost college graduation rates, Education Committee Chairman Sen. David Pearce, R-Warrensburg, presented the measure, which would create a "transfer library" of 25 courses that would count toward a student's degree at all public colleges in Missouri.

Pearce said this and other provisions in the bill are aimed at keeping students in college to earn their degree instead of dropping out after a few years.

"We have students show up as freshman and leave by the time they are a sophomore," Pearce said.

The bill could also help boost Missouri's percentage of people with college degrees, which is currently hovering just below the nations average. Commissioner for Higher Education Dr. David Russell pointed out that only 25 percent of our current third graders will get a college degree.

"It is an unfortunate waste of human capital," Russell said.

Future state spending would be capped under a measure passed by the House Budget Committee Wednesday.

Rep. Eric Burlison, R-Springfield, sponsored the constitutional amendment, which if approved by Missouri voters would freezing spending levels on Missouri's budget for general revenue funds. Burlison's amendment caps future spending to 2008 budget levels when state revenue was $8 billion with future increases allowed based only on inflation and population growth.

Former House Budget Chair Rep. Allen Icet, R-St. Louis County, returned to Jefferson City to support the bill arguing it will help prevent the uncertainty in the state budget.

"When the state of Missouri has good years from a revenue standpoint that there is a limitation put in place so that the General Assembly simply cannot spend every dime knowing full well if nothing else that is simply not sustainable," Icet said.  

Under the amendment, Any additional revenue collected beyond the $8 billion mark would first be diverted to pay off public debt owed by the state and then into emergency cash reserve funds. Burlison said his bill would provide stability to the state during uncertain economic times.

"It tries to make it a more stable environment and making sure that we reduce the boom and bust years that we experience," Burlison said.

Democrats and some Republicans expressed concerns about the measure, arguing it makes spending on education and healthcare more difficult.

"Vote against this for the sake of our kids, education and the elderly," Rep. Jamillah Nasheed, D-St. Louis City, said.

A Senate committee heard testimony Tuesday on a bill, which would prevent Gov. Nixon's administration from creating a health exchange without the approval of Missouri voters.

The health exchange would establish a website where consumers would be able to compare insurance company's rates before purchasing a plan. The bill sponsored by Sen. Rob Schaaf, R-St. Joseph, prevents the state executive branch from establishing such an exchange as mandated by the Patient Protection and Affordable Care Act, more commonly known as "Obamacare."

"This bill is needed because the governor has already tried to create a health insurance exchange by executive order ... this shouldn't be allowed to happen. This is the purview of the Legislature, not the governor," Schaaf said.

Schaaf's bill stems from a conflict last September where the Missouri Health Insurance Pool (MHIP) got a $21 million from a federal grant to lay the groundwork for the exchange. Lawmakers were irate when they were not consulted on the move.

Alan LeDodge, a retired United Methodist Pastor, testified against the bill, saying Missouri needed the federal grant money, "so that our state agencies can upgrade their computer systems, make them more effective, make them more usable, make the job of our employees in the state work more effectively and more effectively respond to the needs of our people."

  State lawmakers heard testimony on broken school funding  01/10/2012

Lawmakers heard testimony on how the mechanism to fund school districts is broken.

Legislators heard testimony Tuesday on how the current approach to funding local districts harms certain schools in the event that education is not fully funded. The schools most affected under the current system are known as "hold-harmless" which essentially means their funding cannot be cut.

School districts have not been fully funded since 2009, a trend expected to continue for the next fiscal year. Since 2009, all school districts have lost funds even though about 150 of them are "hold-harmless" and are funded differently than the rest.  

Rep. Mike Thomson, R-Maryville, and Sen. David Pearce, R-Warrensburg, have filed bills in the House and Senate, respectively, to fix the problem and address budget shortfalls in the future.

"There is nothing now to say how a $300 million shortage is going to be distributed among the schools," said Thomson, a former school administrator and Chairman of the Joint Education Committee.