MOScout Daily Update: Rural Missouri’s Lost Decade - State Control Day - Diamond Pet on Class Action - Utilities to Pushback - Jones on Taxes and more…

1 Big Thing: Rural Missouri’s Lost Decade

According to data recently published by the Missouri Economic Research and Information Center (find it here), 44 of Missouri’s 115 counties showed negative real economic growth between the years of 2014 and 2023.  In other words, after adjusting for inflation these counties were producing fewer goods and services than they were ten years earlier.  During this time, the state of Missouri’s real GDP increased about 18%.

·       This is a recipe for economic frustration and a lower quality of life.  Just as a rising economic tide tends to lift all boats, conversely, it’s much harder to grow your business when your customer base and their wallets are shrinking.

Nearly all the counties facing this crisis are rural. 

Andrew, Audrain, Bollinger, Buchanan, Butler, Carroll, Clark, Daviess, DeKalb, Gentry, Grundy, Harrison, Henry, Holt, Howard, Iron, Jefferson, Knox, Lewis, Linn, Livingston, Madison, Mercer, Mississippi, Monroe, New Madrid, Nodaway, Oregon, Osage, Ozark, Pemiscot, Perry, Pike, Putnam, Reynolds, Ripley, Shelby, Stoddard, Sullivan, Texas, Vernon, Washington, Wayne, and Worth Counties.

This should prompt Republican soul-searching.  They’ve held majorities in the legislature during this entire period.  And – except for the first couple years when Jay Nixon was governor – Missouri’s had Republican governors during this time.

Econ 101

There are essentially two ways to grow GDP: 1. Have more people to produce more goods and services; 2. Increase productivity so that the same number of people produce more goods and services.

It’s why immigration (which grows the workforce) is good for the economy.  As is technology, and investments in education (to make the workforce more productive).  These are the surefire ways to grow the economic pie.  But we’re constantly distracted by subsidies and incentives for one-off projects or industries. 

Driving the Day: State Control +

Today the Senate and the House will both hold hearings on bills to bring the St. Louis Police force under state control.  This is a top priority of the Kehoe Administration and has the backing of Republican leadership.

·       The Senate (11AM) will hear bills from Chair Travis Fitzwater (SB 44) and Sen. Nick Schroer (SB 52).

·       The House (2PM) will hear Rep. Brad Christ’s HB 495.

The bills all appear largely similar in their handling of the state takeover.  Christ’s bill add a few criminal provisions with regard to rioting and reckless driving (doing “donuts” and “burnouts”).

·       But the bills do not simply allow the governor to appoint the police board, and leave it at that.  They also contain specific micromanagement: how many employees, at what level of pay.  Why would these numbers be dictated immutably into state law, rather than being determined locally by a responsible board?

More on SB 4 & 5

Also on the docket for today (2PM, Senate Commerce) are Sen. Mike Cierpiot’s SB 4 and SB 5 which I wrote about yesterday.  It involves the “future test year,” and, as I wrote yesterday, is being opposed by the Consumers Council of Missouri.

Look for utilities today to pushback on claims from the Consumers Council…

·       The Future Test Year language in the bill is from the Public Service Commission in response to a much larger and more comprehensive regulatory reform bill filed last year. The PSC would have total discretion in permitting a utility to use FTY or not.

·       It does not change accounting practices, it’s a process improvement. Over half the states already use this framework, including five neighboring states.

·       It would allow all parties to be involved in the frontend of the rate making process to agree/disagree/modify any proposed projects and planned expenditures, rather than “guess work” in proposed investments. 

·       Claims that “rates will increase 10%” are unfounded and not supported by fact. 

Diamond Pet Food on Class Action Rules

In yesterday’s Senate General Laws Committee, Sen. Curtis Trent (Chair) presented

SB 47 to change the procedure for class action lawsuits.  The committee heard from a number of farmers who related their feelings of betrayal at Tyson Food for closing their Dexter plant. 

And the committee also heard from Matt Price, Chief Legal Officer of Diamond Pet Food.  It was to me because Diamond seems poised as a potential new power-player, and voice for business, in state politics.

SNK Real Property Holdings is an entity of the Schell and Kampeter families which own Diamond Pet Food.  They’re located in Meta Missouri, a small town about a half hour south of Jeff City.  They were heavy donors to Sen. Lincoln Hough’s LG ($250,000), and Mike Kehoe’s gubernatorial campaign ($250,000), as well as making a number of smaller contributions to other pols.

From Price’s testimony: If a business in Missouri wants to fight what it believes is an unmeritorious class action, it faces a Hobbesian choice. You either settle early against your own principles, or you need to buckle up and be ready to spend several years and several millions of dollars fighting… So companies such as Diamond have choices to make. We can vote with our pocketbooks, we can vote with our feet. Companies that look to relocate headquarters or invest significant capital improvement dollars into a state first look to the tax environment of that state and then look at the litigation environment of that state…

House Dem Committee Assignments

Minority Leader Ashley Aune started making committee assignments.  Here are Ranking Members announced yesterday.

·       Administration and Accounts Committee: Rep. Kemp Strickler.

·       Children and Families Committee: Rep. Raychel Proudie.

·       Commerce Committee: Rep. Steve Butz.

·       Crime and Public Safety Committee: Rep. Mark Sharp.

·       Elementary and Secondary Education Committee: Rep. Kathy Steinhoff.

·       Emerging Issues Committee: Rep. Emily Weber.

·       Professional Registration and Licensing Committee: Rep. Jo Doll.

Jones: Cut Tax Or Be Left Behind

In a Forbes piece out yesterday (see it here) looking at states cutting income tax, lobbyist and former Speaker Tim Jones argued now is the time to be aggressive on cutting taxes.

“Missouri has slowly, but successfully and responsibly, continued to ratchet down its income tax since I began the effort when Speaker in 2014,” Jones added. “The results are incontrovertible: as less money has been taken from taxpayers, Missouri’s budget has grown dramatically, perhaps proving that lawmakers need to be more, not less aggressive, with pro-growth tax cuts. As nearly all of Missouri’s neighboring states continue to significantly cut their income tax, Missouri needs to compete with these efforts and not be left behind.”

$5K+ Contributions

Serve Missouri PAC (pro-McCreery) - $10,000 from Catalyst PAC.

Great Northwest PAC(pro-Black) - $7,500 from Conservative Justice PAC LLC.

Lobbyist Registrations

Dawit Getachew, Elissa Johnson, and Marie Ndiaye added FWD.us.

Bryan Hannon added Healthcare Distribution Alliance.

James Harris added LivaNova USA, Inc.

Shaun “Ellie Bledsoe” O'Hara added Planned Parenthood Great Rivers Action.

Ryan Rowden added Missouri Behavioral Health Council, and deleted American Chemistry Council.

Jerry Hobbs deleted Bridging Families to Communities and Beyond/Saint Louis YouthBuild.

Birthdays

Happy birthdays to Jay Hahn, Mike Lodewegen, Khristine Heisinger, Andrew McDaniel, Lynn Morris, Michelle Colbert, and Anne Marie Moy.