The state budget office sees more signs that Missouri is creeping back into positive economic territory. Budget Director Linda Luebbering says general revenue tax collections have come in eight-tenths of a percent higher than last August’s totals..Income tax collections were about four percent higher in August than in August, 2009 and sales tax collections were up three-tenths of a percent. Not much, but Luebbering says the increasing collections in the first two months of the fiscal year are encouraging, especially in the two categories of taxes that provide about 90% of the state’s general revenue.

The growth would be much bigger if the revenue department had not okayed almost 20 percent more in tax refunds than it approved in August of 2009. But Luebbering says that’s a reflection of how poor the economy was a year ago. She says the refunds do lower state revenue but they might constitute “a little bit of positive news.”

Although the total collections of income and sales taxes are up just a little bit in August, Luebbering says the trends are going the right way and are on target for meeting projections for the full year.

BP talks with Linda Luebbering 5:29 mp3

The Missouri Department of Corrections is making changes to the visitation system in the state, in the name of budget cuts.

The Department of Corrections saw their budget cut by $4.5 million dollars for this fiscal year and made some efficiency adjustments accordingly. Tom Clements, the Director of the Division of Adult Institutions, says the biggest difference will be in visitation hours.

“This change in our visitation schedule allows us to reduce our comp time accumulation and gives us an opportunity to utilize some of those officers in some different posts on Thursdays,” Clements said.

The Department will eliminate visitation on Thursdays, which was the least used of the four visitation days. Saturday and Sunday visitations will stay the same, and extra hours will be added on Friday.

“I can’t give you an exact dollar savings, but the dollar savings primarily is associated with a reduction in overtime costs. That’s pretty compelling because we had an over $1 million reduction in our overtime appropriation for the current fiscal year,” Clements said.

Clements says there was an effort to try to lessen the impact on the visitations themselves.

“When (inmates) get released from prison if they have a strong, prosocial support system waiting for them; that can help them make the transition successfully. It can be a factor in success or failure and therefore a factor in future crime, in future recidivism,” Clements said.

The changes go into effect today. Clements says they’ve been notifying inmates and those visiting them about the changes for a month now.

AUDIO: Ryan Famuliner reports [1 min MP3]

It’s slow progress, but progress nonetheless. Governor Nixon applauds business investments in the towns of Houston and Cuba this week, adding 85 and 37 jobs in those towns, respectively. That adds on to announcements for hundreds of jobs in recent weeks.

“Over the last six weeks or so we’ve seen IBM come to central Missouri with 800 jobs, We’ve seen Mamtek come to Moberly with 400 jobs, we’ve seen Unisys come to St. Louis with 300 jobs, we’ve seen Jet Midwest come to Kansas City with 500 jobs, we’ve seen Expedia come to Springfield with 500 new jobs. Those were all very competitive choices, it wasn’t just, ‘we’re coming to Missouri’ at the beginning of that process. We had to go out and compete in that area,” Nixon said.

The state offered tax incentives in most of those cases. Nixon says he expects more jobs announcements announcement next week, as well. But the unemployment rate in the state is still at 9.2%.

“We have stayed below the national average on unemployment for the last six months. We’ve had a net job gain and continued to, I think, invest correctly. We all would like to see the economy come back much more quickly. But when you compare Missouri to other states, we’ve been able to do all this and keep our stellar triple-A credit rating because we’ve been fiscally prudent with the dollars folks give us,” Nixon said.

Nixon points out that the triple-A bond rating allows the state to get much lower interest loans, for instance a recent bond issue got a rate of 2.28%. He says we’re the only state in the Midwest with that rating from all three credit agencies. He says this helps as the state continues to compete to try to bring in new jobs, or at least keep the ones it has.

“I think they’re solid signs, I really do. Are we there yet, to where we want to be? No. Do we have challenges? Yes. Are we going to need to continue to invest our resources sharply and use our economic development tools crisply? Yes,” Nixon said.

Voters throughout the state might wonder why they’re voting on Proposition A in November when it seemingly is a Kansas City / St. Louis issue. One political attorney says it’s very much a statewide issue. Kansas City and St. Louis residents currently pay a 1-percent earnings tax. Those who live outside the cities but earn a paycheck in them also pay the tax.

Attorney Marc Ellinger says that tax amounts to millions of dollars for those two metro areas.

But he says voters statewide will decide whether metro residents can vote to phase out that tax. And he says it is a tax issue that could affect them, no matter where they live in Missouri since there are other areas that have considered imposing earnings taxes, even in some municipalities with as little as 12,000 residents.

Of 150 largest cities in the nation, Ellinger says only 25 have an earnings tax. And he says growing cities do not have earnings taxes. He cites Philadelphia in being progressive and repealing its current tax.

Opponents of repealing the earnings tax include Washington University and the labor lobby.

Kansas City and St. Louis city leaders have argued against repealing the tax, saying, ”We are the economic engines of Missouri.” Both cities’ officials say the tax is essential to providing city services.

A Springfield Firefighters Association says the approval of the earnings tax initiative, although Springfield does not have one, would bar the implementation of the tax anywhere in Missouri, which could have ripple effects.

In April, the St. Louis Association of Elected Officials released a statement arguing that ending the earnings tax would mean the end of 39.2 percent of the city’s revenues and begin a large increase in taxes.

Proponents say that number is inflated, pointing to the findings of Economist Dr. William Rogers, who is with the University of Missouri-St. Louis.

His report shows the earnings tax accounts for about 15 percent of the total revenues in each city.

Let Voters Decide, a group backing the measure, says “opponents of Prop A like to claim that the earnings tax provides 30 percent or more of the city revenues. They sometimes qualify this by saying 30 percent of more of the “general fund budget.”

“We believe this is misleading to voters,” since there is a big difference between ”a city’s total budget and ‘general fund budget.’”

A member of Missouri’s Congressional delegation would like to see Congress extend the tax cuts enacted by President Bush, but doesn’t see that happening.

Northeast Missouri Congressman Blaine Luetkemeyer says he has been traveling throughout his Congressional district, which actually extends all the way south to Osage Beach with a portion even below I-44. He says many are worried the break on estate taxes will expire.

“I’ve been on the road the last two weeks since we’ve been out of session and every stop I make, that’s one of the first two or three questions I get, with regard to the estate tax,” Luetkemeyer tells the Missourinet. “It’s huge with small business folks. It’s huge with farmers. Are they going to be able to pass on their life savings that is wrapped up in the businesses or the farms that they worked their lives for? Are they going to have to give it all away after they’ve paid taxes on it already and not be able to pass it on to their kids and their grandkids?”

Without action, a host of taxes would increase next year. The marriage penalty would return, the dependent credit would drop from $1,000 to $500 and capital gains taxes would rise.

Luetkemeyer says the only wiggle room the Obama Administration has given itself is to keep some breaks intact for individuals making less than $200,000 and couples making under $250,000.

“I think they’ll let the tax cuts expire and, perhaps, do the ones under 200 and 250,000,” Luetkemeyer says.

Extending the tax cuts for those in that earning bracket would cost $1.4 trillion in federal tax revenue over the next decade. That total would grow to $2 trillion if extended for all. The nonpartisan Congressional Budget Office has stated that extending some of the tax cuts could help boost the economy, though, it cautions that such a stimulus would come with a price: higher budget deficits and deeper debt.

AUDIO: Brent Martin reports [1:15 MP3]

Sen. Bond (R) speaks at the roundtable discussion

Columbia is in the hunt for a major data center, and if the city is to compete, it might rely on the growth of the use of renewable energy in the state.

Those working closely with the project call the company “The Big Apple,” a code name for a Fortune 50 company that’s looking for a place somewhere in the world to locate a $1.6 billion data center. But there’s one catch; the site has to have the capacity to fuel the data center solely on renewable energy. Columbia is on the list of the final 3 sites being considered.

“We’re not going to get there with wind and solar. The wind doesn’t blow consistently and the sun doesn’t shine that consistently in Missouri. We’ve got to use wood biomass or grass biomass,” said Senator Kit Bond at a roundtable discussion on “The Future of the Missouri Biomass Industry,” at the Life Sciences Center named after him at the University of Missouri.

Experts say Missouri can meet the renewable energy goal with biomass conversion. Bond anticipates other large companies using that angle too, to be ahead of the curve when it comes to potential carbon emission penalties in the future.

“Missouri has tremendous forest resources, primarily in south Missouri. Much of it, six-sevenths of the forest we have, is not usable commercial-value saw timber. That material should be removed for a healthy forest, and that can be converted to electricity, which is almost carbon neutral,” Bond said.

Meantime, the EPA is considering putting biomass in the same category as fossil fuels when it comes to its treatment in emissions limits, raising questions over how “clean” biomass energy really is. Bond refutes that, saying the woody biomass releases the same amount of carbon dioxide rotting in the forest as it does burning in an incinerator.

Dr. Gene Garrett, a former professor of Forestry and founder of the Agroforestry Program at MU, opened the roundtable meeting. He puts the potential for the industry in perspective.

“This data center that they were talking about is roughly going to require a million green tons per year. We’re talking about, out here in our native forests, having maybe 100 to 140 million tons that we can actually use,” Dr. Garrett said.

Dr. Garrett says the woody biomass would only make up about half of the potential biomass product in the state.  The rest could come from grassy biomass, especially from grasses with high energy yields in the northern part of the state.

“This is an opportunity to make a valuable industry out of harvesting that scrub timber and converting it to chips or by torrefied wood or maybe even gasification. Although from Gene’s chart it looks like combustion may be the most effective way to use it,” Bond said at the roundtable, after Dr. Garrett’s presentation.

Those working on the project that were present at the roundtable say the  company is expected to make a decision as early as the end of the year, or by the second quarter of 2011. Bond says an investment like that could be the catalyst in getting this industry off the ground. Up until now, there hadn’t been enough demand to justify setting up the infrastructure for delivery of the biomass and the conversion to energy.

“That will jump start the industry that the voters mandated for 2015, to have 15% of our electric power from renewables,” Bond said. “There are some mandates, but nothing substitutes for having demand come from the private sector.”

Bond warns Columbia has a disadvantage because the state doesn’t have tax exemptions for equipment, something he pushed for during the legislature’s special session in July.

AUDIO: Ryan Famuliner reports [1 min MP3]

Economic conditions are sure to play a big role in which candidate Missourians elect to the United States Senate to replace Senator Bond.

Persistent poor economic numbers have Democrats in Washington re-thinking an extension of Bush-era tax cuts. Republican Roy Blunt, a Congressman from southwest Missouri, says Democrats have been too eager to state they will end the tax cuts.

“They have been misleading about these taxes. They have used this as class warfare and it’s catching up with them,” says Blunt.

As for Democrat Robin Carnahan, Missouri’s Secretary of State, she agrees with Blunt that the tax cuts should be extended.

“I think we need to extend those,” Carnahan tells reporters. “Now is not the time to be doing anything to raise taxes. We’re still in the midst of a downturn in the economy and so we need to keep those tax cuts in place.”

Carnahan says all of the tax cuts approved during President Bush’s administration should be extended. any Democrats had called for them to end. They argued that the tax cuts benefitted only the wealthy and hadn’t proven to spur job growth. A new report by the Congressional Budget Office, though, has made many reconsider that stance. The office, which is nonpartisan, has stated that one way to create jobs and boost the economy would be to extend some of the tax cuts. The report does note that the price for job creation would be higher budget deficits and deeper debt.

Tax cuts implemented during the Bush Administration include a drop of the lowest tax rate from 15% to 10%; a cut for married filers;increasing the deduction for dependents from $500 to $1,000; cuts to the capital gains tax, among others. They expire at the end of this year, unless Congress extends them. The Obama Administration has indicated it would be willing to extend some to individuals earning $200,000 or less and to couples earning $250,000 or less. Extending the middle-class cuts over the next decade would cost about $1.4 trillion, according to congressional tax analysts. Extending tax cuts for high-earners as well would bring the total price tag to more than $2 trillion.

Blunt and Carnahan might agree on extending the tax cuts. They don’t agree on the $787 billion federal economic stimulus package. Carnahan supports it, though says it should have focused on small businesses.

“It did some, but it didn’t do enough,” Carnahan says. “It did a lot to give tax breaks to Missourians. Two-point-two million Missourians got a tax break from that. Congressman Blunt voted against that tax break for Missourians.”

Blunt states flatly that the stimulus package hasn’t worked; for a good reason.

“Because it wasn’t focused on private-sector job creators,” Blunt says. “It was focused on spending government money, largely for government programs.”

Blunt says a more focused approached could have spent a fraction of the money for better results.

AUDIO: Brent Martin reports [1:20 MP3]

Zweifel speaks at a press conference announcing his proposal

State Treasurer Clint Zweifel has asked the Missouri Housing Development Commission to commit to putting one third of its state and federal tax credits toward a package that would help assist those with mental illnesses who are homeless or on the verge of homelessness.

“The philosophy here is really straight forward. We build safe, stable housing, and then we provide critical supportive services that are so important. It’s a recognition that we have to invest in both of those if we’re gonna be successful in really addressing homelessness,” Zweifel said.

Zweifel estimates the percentage in his proposal would figure out to about $127 million dollars, but he points out it’s not any new spending; these are federal and state resources already allocated for fiscal year 2011. He estimates the money could build 400 specialized homes for those with mental illnesses.

“We purposely provide some flexibility in there so that it could be single family housing where a group of people might live in that home. It could be a multi-family unit apartment complex,” Zweifel said.

Zweifel says it’s hard to work in a “one size fits all” mindset when it comes to these types of issues.

“We could have projects come to us where the purpose is to get someone back on their feet and back to some sort of independent living. So I think it really varies on what professionals see is the opportunity to be solved and what the challenge is to be solved,” Zweifel said.

He says the state hasn’t been addressing the problem as it should.

“Very few states have really lived up to the responsibilities in taking care of the homeless population and dealing with the issue. This is a chance to take a couple different pieces of expertise in mental health but also expertise in bricks and mortar and kind of bring them together so we can begin to make a dent,” Zweifel said.

Zweifel says in the long run, this will help the state become more efficient. He says it would cut costs for shelters, hospitals, jails, prisons, and emergency rooms as the chronically homeless are placed in more stable environments. Zweifel sent a letter outlining his plan to the MHDC and the Governor in July.

AUDIO: Ryan Famuliner reports [1 min MP3]

Gov. Nixon speaks to a crowd of college and university administrators in Jefferson City

Governor Nixon lays out four charges for the leaders of colleges and universities in the state, with hopes to reach an ambitious goal.

Nixon tells the presidents and chancellors at the Governor’s Summit for Higher Education in Jefferson City that one charge is to make sure institutions are taking extra steps to see students all the way through to graduation. The second is a complete statewide review of programs.

“We need to get an actual, provable document that explains to Missourians, and to me, what we’re getting out of the classes. Where they’re being offered, whether they’re duplicative, whether we have some degree regiments that could be better handled at other schools,” Nixon said.

Which feeds into the third charge; working on more collaboration, even among separate institutions, to be more efficient.

“We have good examples of collaboration, expanding those examples is important. Whether it’s UMKC and Mizzou and Missouri State agreeing to come together and we have now the pharmacy program getting ready to get started in Springfield. That kind of collaboration where you don’t have to have a bricks and mortar building, where you’ve already got the professors in line, you’ve already got the courses certified; that kind of academic collaboration is important. I think getting these folks to work together is a big part of what we’re trying to do,” Nixon said.

Finally, Nixon wants the institutions to make an effort at sustainable funding by addressing strategic needs and rewarding better performance.

Nixon speaks with reporters after the opening remarks for the summit

Nixon says the ultimate goal is to get 60% of Missourians to have a two-year or four-year degree by the year 2025. With a figure around 37% now, does the governor think that’s possible?

“I think it is a very important goal, and I think it’s reachable,” Nixon said, after pausing to think about his response.

He says the importance lies in the effort to reach the goal.

“The challenge we have with this economy right now is we don’t have enough jobs for the people that want those jobs, unemployment is too high. But I think most longer-term thinkers say that the challenges of the future are going to be having the trained workers for the jobs of the future. I don’t mean to go “chicken or egg” on it, but if we don’t get up there it will have a deleterious effect on our economy, a deleterious effect on the opportunities for our state. So it’s incumbent upon all of us to do everything we can to reach that goal, to exceed that goal if we can,” Nixon said.

While being asked to reach these goals, Nixon also acknowledges higher education institutions will be asked to do more with less. State Budget Director Linda Luebbering spoke at the summit, saying that looking at the numbers, the leaders of colleges and universities have a lot of work to do.

 “I am guessing, not betting because I don’t bet, but guessing that there will be additional reduction in higher education. SO the question I think for this group, for all of us, is ‘what do we do to help higher education weather those reductions?’ What can we do legislatively? What can we do administratively? What can you do, what can we do, to make it a little bit easier since we know that it’s likely going to continue down for a while,” Luebbering said.

Only a month and a half into the fiscal year, Luebbering estimates the state will have to cut an additional $400 million to $500 million from its overall budget. That number would have been higher if it weren’t for the $209 million going toward Medicaid in the state through the federal jobs bill passed last week.

She doesn’t see much hope for revenue increases in the near future.

“I just, honestly, don’t see this particular legislature interested in approving a tax increase and quite frankly I don’t see the Governor interested in approving a tax increase. In some sense I guess you could say that’s an obstacle, but in my world, it’s a reality. Deal with it and figure out what else we can do,” Luebbering said.

But, she says, the Governor’s four charges are the types of actions that need to be taken. She says long-term solutions are going to be much more effective than something like furloughs, which by design are short-term fixes, and only delay the solution to larger financial issues.

AUDIO: Ryan Famuliner reports [1 min MP3]

Missouri is going to get almost 400-million dollars from the federal jobs bill sent to President Obama by the House. But some of that money won’t be spent for a year. Some of the money in the bill is for healthcare, specifically for Medicaid progrms, and for education. State education leaders are waiting to see what kind of strings and guidelines are attached to their $189 million. The state knows $209 million is for Medicaid.

But budget director Linda Luebbering says those funds will not be added to state finances for the fiscal year that started last month. The Governor and the legislature had agreed earlier in this calendar year to tuck that extra Medicaid money aside for the fiscal year that starts a year from now—because the state expects a giant shortfall in program funding for fiscal year 2011-2012. Luebbering says the $209 million will take a bite out of that shortfall estimated by various sources to be between $600 million and one billion dollars.

At the start of the carlendar year the state was looking for 300-milion dollars, not 200 million. She says the new bill starts phasing down the extra Medicaid money the states would be getting—all states, not just Missouri. Regardless, she says, passage of the bill is good news for Missouri.

Bob Priddy talks to Linda Luebbering 2:08