Wednesday, December 20, 2017

Q&A#1:  What’s Still Left From Last Year’s State of the State?

Short answer:  About three more years’ worth of work.


I did a quick re-read of last Governor Eric Greitens’ State of the State speech from January to see what’s left on his agenda.  Here’s my quick scorecard.


Blue Alert.

Lobbyist waiting period.  Legislature passed a wait period, though not as long as Greitens had wanted.



Right to work.  Passed and signed but Round 2 is coming next year as the labor orgs put the issue before voters.



Tort reform.  Changes to expert witness testimony, and changes to the Missouri Merchandising Practices Act were made, but it’s expected there will be more this session.

Tax credit reform.  MHDC is just the opening battle.

Deregulation. The Gretiens team is in the middle of their effort to cut regulations across all agencies by a third.



Lobbyist gift ban.

Term limits for other statewide officeholders.

Prevailing wage.

Tech upgrades and investments across state government.

Restructuring of state government with resulting higher pay for state employees.

Tax reform.

Corrections reform.

Welfare reform.

Education Saving Accounts.


SOTS Pull Quote: And this is how we begin. Not every problem that we’re facing in the state of Missouri can be solved in the next week, the next month or the next year. But this agenda is a strong and bold start.


Follow-Up on Dark Money

Yesterday in my musings about the unknown source of the millions of dollars that powered Governor Eric Greitens’ campaign, I tossed out a few possible names.  One MOScouter admonished me that I was wrong to consider David Humphreys a suspect.  The mystery millions went to Greitens in the primary when Humphreys was still backing Greitens’ rival, Peter Kinder. And Humphreys – like Rex Sinquefield – has been largely upfront about his giving.


Never Know the Source of the Money

Last month the Federal Election Commission issued a $350,000 fine for money funneling that involved a few Missouri politicos.  See that article here.

Yesterday in a tweet, FEC Commissioner Ellen Weintraub says we’ll never know the true source of the $1.7 million that was at the heart of the misdeed… How far will dark-money donors go to stay in the shadows? These guys laundered their millions thru 4 orgs, got away with keeping the name of the true donor secret, & are STILL suing @FEC to censor our reports. I’ve *never* seen this before. See it here.


42 Cents

Post-Dispatch reports on yesterday’s Missouri Housing Development Commission vote to stop using the state low-income housing tax credit.  See it here.

Pull Quote: The change was spearheaded by commission member Jason Crowell, who fought for years to rein in state tax credits as a Republican state senator from southeast Missouri. His plan would accept the federal low-income allocation but keep the state from matching it with its own tax credits… The state tax credit has drawn fire for being inefficient. Developers sell them to finance projects but typically receive just 42 cents on the dollar, far lower than the price paid for the federal credits.

Worth the Reminder

From last month’s MOScout: Auditors Susan Montee and Nicole Galloway both published audits citing the “43 cents on the dollar” number which made it seem as if 57 cents went to waste, fraud, or profiteering. In truth, both auditors (as CPAs) likely understood that while these numbers would help their audits get headlines, they were misleading.

The credits don’t pay out for roughly 13-14 years.  They can’t be redeemed until a building is completed and all units are leased to qualifying tenants, after which 1/10 of the credit award can be redeemed annually for 10 years. The length of the payoff is the main reason that credits don’t sell for a higher price.  This is easily grasped by anyone with a mortgage who realizes that you pay $400K over 30 years to buy a $200K.  Or just as the state itself gets about 52 cents on the dollar when it goes to the bond market for major capital projects. In other words, money ain’t free.

One proposed fix is to pay out the credits instantly.  But this has never gained traction because affordable housing advocates note the extended credit period and recapture provisions ensure long-term compliance and proper management of housing stock.  Also the 10-year payout keeps the state from having to absorb a huge general revenue hit up front.


Budget Outlook Follow-Up

AP reports that Missouri Revenue Director Joel Walters believes that the federal tax cuts will have a largely neutral impact on Missouri’s budget – give or take $100 million.  See it here.

Pull Quote: “State budget leaders still are working on official projections, but Department of Revenue Director Joel Walters said he thinks that the federal tax changes could result in a loss or gain of about $100 million to Missouri’s tax revenues… Missouri is one of 20 states with laws automatically linking any federal income tax changes to the state tax code. That means the federal plan to roughly double the standard deduction also would result in a doubling of Missouri’s standard deduction, which would significantly reduce state revenues if that were the only change being made. But the federal plan also repeals personal tax exemptions, resulting in the elimination of Missouri’s similar exemptions, which would trigger an increase in state tax revenues if that were the only thing to consider.

Further complicating the matter is the fact that Missouri is one of just a half-dozen states allowing a state income tax deduction for at least a portion of the taxes paid to the federal government. That means if taxpayers owe less to the federal government, they will have a smaller deduction on their Missouri income taxes and thus owe slightly more to the state… The state’s tax revenues also could receive a boost if the federal tax changes lead to a surge in the economy as Trump hopes.


Unreported in the article is that some budget watchers fear a separate $100 million hole due to the state tax cut phase in from SB 509.



Missouri Ethics Commission fined Deidre Lewis, president of Robinwood West Community Improvement District in West County St. Louis, was fined $1,000 for use of public funds.  See it here.


The Sixteenth Circuit Judicial Commission announced the applicants for the Division 26 associate circuit judge vacancy in Jackson County:  Cory L. Atkins, Kenneth M. Campfield, Bryan O. Covinsky, P. Benjamin Cox, Jo Leigh Fischer, Kimberley R. (Cox) Fournier, Michael J. Hunt, Justin J. Kalwei, Marilyn B. Keller, Leslie Leigh Lawson, Elizabeth S. (Betsy) Lynch, Kyndra James Stockdale, Brady X. Twenter, Eric E. Vernon, Brian D. Webb, and R. Travis Willingham.


Betsy AuBuchon, the clerk of the Supreme Court, is registering to lobby for the high court (below).  But it’s not a permanent change.  It’s only until they fill this spot.


Help Wanted

House seeks Oversight Division Director.  “In this fast paced and exciting position, you will be working with the Missouri General Assembly directing a professional staff to provide fiscal analyses and estimates of proposed legislation. During the interim, you will be challenged to direct and oversee team members performing evaluations of statewide programs and any special projects assigned by the legislature….” See it here.


Lobbyists Registrations

Betsy Lederwood AuBuchon added Judicial Conference Of Missouri, Supreme Court Of Missouri

Amanda Aiken, Gabriela Martinez, Jennifer Mossgraber, Adam Rapert, Sean Patrick Williams, and Jordan Young added Associated Students of the University of Missouri.

Fred Wickham and Brian Wood added Wickham & Wood LLC, and AFT-Missouri.

Steve Rudloff deleted Missouri Limestone Producers Association.


$5K+ Contributions

MBA River Heritage Region PAC - $6,173 from Southern Bank.

Jacobs for Judge - $50,000 from Jonathan Jacobs.

Missouri First - $10,000 from QC Holdings Inc.

Living Well PAC - $12,000 from Walgreens.



Happy birthdays to Rep. Bart Korman, Ellen Sherberg, Melissa DeStefano Furey, Dan Bryar, Ben Murray, and Bob Jacobi.


MOScout News

MOScout goes on a holiday schedule for the next two weeks.  No MOScout this Friday (22nd) or Monday (25th), and the no MOScout next Friday (29th) and Monday (January 1, 2018).  And then before you know it, we’re back in session…. January 3…