September 19, 2014

Gov. Nixon issues statement on override of his veto of a tax cut bill

The state House on Tuesday completed its vote to overturn Governor Jay Nixon’s (D) veto of a tax cut proposal, SB 509, that Nixon says would jeopardize funding for state programs including education, and could even prove to eliminate $4.8-billion in revenue.

Upon the House’s vote to complete the veto override, Nixon issued this statement:

“Missouri families and businesses know that public education is the best economic development tool there is, and that is why I vetoed Senate Bill 509,” Gov. Nixon said. “While scaled back from last year’s billion-dollar House Bill 253, Senate Bill 509 fails to prioritize or adequately protect public education at a time when quality public schools are more important than ever to our ability to create jobs in the global economy. And while its authors may have delayed its impact, Senate Bill 509 remains a very real threat to the principles of fiscal discipline that have helped us maintain our spotless AAA rating for decades. As I have from Day One, I will continue to manage the budget with the resources available and keep our state moving forward.”

Criminal code rewrite drafters respond to Gov. Nixon’s size concerns

Lawmakers that have been working on the rewrite of Missouri’s criminal code for years say this is still the year to get it passed, despite the reservations expressed by Governor Jay Nixon (D) about its size.

Senator Jolie Justus (courtesy; Missouri Senate Communications)

Senator Jolie Justus (courtesy; Missouri Senate Communications)

Nixon has suggested that the rewrite – currently more than 1,000 pages in length in the House version and down to about 700 pages in a Senate version revamped during the legislative spring break – be broken into sections and passed rather than one bill.  The Governor is reportedly concerned that in a bill that size, mistakes could be made. 

Senate President Pro Tem Tom Dempsey (R-St. Charles) has said he will not bring up the bill in that chamber until all parties decide how to proceed.

Senator Jolie Justus (D-Kansas City) says it’s frustrating for the Governor to raise this concern now.

“We’re always frustrated when we hear about any problem with a bill this late in,” says Justus. “I think that we have said for the last three years now that the biggest issue with this bill is its size. We are continuing to work with our fellow colleagues, we are continuing to have conversations with the Governor’s office about the nature of the bill, what’s in it, what’s not in it, and how we can get to a path to getting it passed because this is the year to get it done and we intend to do that.”

Representative Stanley Cox (R-Sedalia) says separating the issue out into several smaller bills would kill the proposal.

Representative Stanley Cox (courtesy; Missouri House Communications)

Representative Stanley Cox (courtesy; Missouri House Communications)

“There is no practical way of breaking it into sections,” says Cox. “It was essentially a five-year process … and three years actually it’s been filed in the Missouri General Assembly … and it was never designed to be broken into several pieces.”

Justus, however, doesn’t rule out taking the Governor’s suggestion.

“That is going to be a difficult row, but I never say, ‘never,’ on anything. We are looking at all options.”

The legislature could pass the rewrite legislation and if the Governor vetoes it, attempt to override the veto, but Cox doesn’t believe it would play out that way.

“It’s pretty hard to believe the Governor would veto legislation that not only has previously been vetted to such a high degree but also has built-in safety nets all over the place,” says Cox.

Senator Bob Dixon (courtesy; Missouri Senate Communications)

Senator Bob Dixon (courtesy; Missouri Senate Communications)

The “safety nets” Cox refers to include the effective date of the legislation, which lawmakers plan to push back to January 1, 2017. The Missouri Supreme Court’s Standing Committee on Criminal Procedure will review the bill after passage.

Cox notes Governor Nixon will also have time for the lawyers that work for him to review the bill after its passage. 

“He’s got what I would consider a rather large law firm,” says Cox.  “That’s what lawyers are paid to do, is look through complicated things and say if they’re good or bad, and the Governor is better capable of doing that than almost anybody I know.”

“I think we’ve addressed every concern that’s been raised substantively,” says Senator Bob Dixon (R-Springfield).

“What we are doing is saying that we are standing here ready, willing and able to negotiate, talk, do whatever we need to move this idea forward,” says Justus. “The time has come. In order for us to have an effective, responsible, safe criminal justice system, we need to get this done.”

“It’s great to accomodate the Governor if we can,” says Cox, “but my inclination is to take the code – what we have vetted in both legislative bodies – and try to pass it and deal with it that way.”

Another state lawmaker who has spent a great deal of time and effort on the criminal code is Representative Chris Kelly (D-Columbia), who offered an open letter to fellow legislators about the Governor’s position.  See the story on that letter for what he had to say.

Senate budget chief considers two-tier budget approach by House

The House has a $26.6-billion spending plan for the coming fiscal year, and now that plan is in the hands of the Senate.

Senator Kurt Schaefer (R-Columbia) is the chairman of the Senate Appropriations Committee

Senator Kurt Schaefer (R-Columbia) is the chairman of the Senate Appropriations Committee

Because legislative budget crafters and the Governor’s office couldn’t agree on an estimate of how much state revenue will roll in, in fiscal year 2015, the House carved the Governor’s budget proposal in two. It proposes taking what the legislature thinks there will be money for out of the state’s General Revenue. The larger amounts that the Governor projects would come from a new surplus revenue fund.

Senate Budget Committee Chairman Kurt Schaefer (R-Columbia) says it’s an interesting approach but it might not be necessary because general revenue growth so far has been closer to what Republic budget makers have predicted than the Governor’s projection.

“It’s looking like the Governor’s numbers are not going to be the actual numbers as we thought when we did our consensus revenue estimate with the House,” says Schaefer. “I think the likelihood of many of those things that are in that (surplus revenue) fund getting funded … it’s probably very unlikely that they’ll get funded.”

Schaefer says he has already started reviewing the House budget.

“We’ll go line-by-line like we always do and see what the House has funded with what I call (General Revenue) that we know is there versus (General Revenue) that in all probability may not be there.”

The legislature must send a budget to the Governor by 6 p.m. May 9.

SPECIAL SESSION: Boeing incentive debate shifts to House

The House today debates the Senate’s version of a bill that offers up to 1.7-billion over 23 years to Boeing if it will build its 777X airliner in Missouri.

St. Charles representative Anne Zerr is carrying the Boeing incentive proposal in the House.

St. Charles representative Anne Zerr is carrying the Boeing incentive proposal in the House.

If the bill, Senate Bill 1, clears the House without changes that would essentially end the special session Governor Jay Nixon called so lawmakers could consider his proposal. Jason Zamkus with the Governor’s Office told the House Economic Devlopment Committee the bill “absolutely” gives the Governor everything he wanted from the legislature in order to make a pitch to Boeing.

Lawmakers have been relying on Nixon to tell them what Boeing says it wants from the state in which it will build the 777X.

Follow House debate of the Boeing incentive bill on Twitter by following @molegislature.

The bill would extend the limits on four economic development programs for Boeing, and require the aerospace company to report annually on the hiring and training of minorities and women, a check in 10 years of the state’s benefit from the deal and would make sure tax increment financing dollars go only to Boeing and not Lambert Airport.

Representative Anne Zerr (R-St. Charles) is carrying the bill in the House. She says what the legislature has put together since Monday is remarkable.

“It shows that we’re eager, we’re willing and we can step up to the plate,” Zerr says. “Quite frankly this is unprecedented. We’ve got both chambers working together, both sides of the aisle working together, we’ve got the Governor working with us, we’ve got labor working with us, and I think that shows that we can get something done.”

If the House passes the bill it could be signed by the leaders of both the House and the Senate and delivered to the Governor today. Missouri is competing with a least 12 other states for 777X production. All offers are due to Boeing by Tuesday.

Key GOP legislators want to see Governor’s Medicaid expansion proposal

Republican leaders in the House and Senate have alternately said they oppose Governor Jay Nixon’s intention to support Medicaid expansion and say it is unlikely to pass the legislature. Two key Republicans in the budget making process, though, say they want to see what the Governor is proposing and talk about it. 

Senator Kurt Schaefer (R-Columbia, left) and Representative Tom Flanigan (R-Carthage)

Senate Budget Committee Chairman Kurt Schaefer (R-Columbia) says there are too many unknowns to reject it out of hand.

“I think as elected officials and accountable to everyone in the public, whether they are opposed to it or in support of it, I think there’s a bottom line threshold of having to be able to understand the actual costs, in terms of dollars, both to Missouri taxpayers now and Missouri taxpayers down the road.”

Schaefer says he thinks there will be costs early on, even though the Governor’s office says expansion would involve no state tax dollars until after 2016.

The Governor’s office says if Missouri participates in the expansion, 300,000 to 400,000 more Missourians would be covered by Medicaid and the federal government would pay for 100 percent of that new population.

Schaefer says, “But it’s 100 percent of ‘something.’ The federal agency, Health and Human Services, has to promulgate rules to say what will or will not be covered under that program. They have not done that yet. So that’s why when people say they don’t know what the cost is, it’s because all the details that have to be filled in by the federal government on what the feds will pay for, what the feds won’t pay for, and what the feds will require a state to do but not pay for.”

Schaefer says pharmaceutical costs are one place that Missouri could see an immediate increase under Medicaid expansion.

“You may get into a situation where … Medicaid will only cover one drug per category, for example, so if somebody’s on two drugs within the same category the state would have to pick that up. Pharmaceutical is already our largest in the Medicaid budget as it exists and I think pharmacy is one are that you could see a substantial amount that the state would have to come up with.”

AUDIO:  Kurt Schaefer explains his belief that Medicaid expansion could cost Missouri early on, 2:54

Schaefer says there is no indication of how Medicaid costs might be divided after 2020.

“I don’t think it’s unrealistic to think that the entire population, after it is expanded, could be required to go back to a 60/40 match where we’re at now. If that were the case in 2020 or shortly after that, that would literally be billions of state dollars from discretionary general revenue that would have to be put up for that money in order to get the federal match money.”

Schaefer says he wants to sit down with the Governor and see what his proposal is for Medicaid expansion, what the additional General Revenue cost is and see what the proposals are for where that would come from.

Representative Tom Flanigan (R-Carthage) chairs the House Appropriations Committee on Health, Mental Health and Social Services. He also wants to see what the Governor’s proposal is before taking a position on it.

“Part of our process in our committee will be to take a look at that. We don’t make judgements. We would like to put the facts out on the table, have an honest discussion of the facts and then let the General Assembly have the ultimate say on which way they would like to go.”

Flanigan also doubts no state tax dollars would be used early in Medicaid expansion.

“There’s no such thing as free money.”  He adds, “Whether it will cost us anything in our 2014 budget that we’re going into, it’s the budgets that come after that. It’s the total cost that’s going to come up in ’14, ’16, ’20. Those are the issues that need to be examined and talked about.”

The plan is that when expansion is fully implemented, the state would pay 10 percent of the cost. Flanigan says the concern he and other lawmakers have is that the plan could change.

“The issue could be that the federal government decides that they only want to fund less than 90 (percent) … which would increase the state contribution. You don’t know what the economy is going to look like going forward.”

AUDIO: Tom Flanigan on his concerns about what Medicaid expansion might mean for Missouri’s budget, 1:51

The Governor will unveil his budget proposal in his State of the State Address next month.