MOScout Daily Update: Budget Week - Whistleblower Suit - DOR Audit - Proudie Kickoff - Murphey to Fed and more...
Lawmakers return to Jefferson City today after their Spring Break. There are now eight weeks left in the legislative session. Every week counts.
Driving the Day: House Budget
At the top of the House agenda for this week: the budget.
The House Budget Committee will start this morning – and probably work late into the evening – going through the budget bills, “marking them up” and then voting them out of committee so they can go to the House floor later this week.
And
House Dems are set to caucus at 11AM. On the agenda is the dissident Dems’ effort to oust Minority Leader Ashley Aune. I do not expect this to be successful.
This will be occurring at the same time as the Budget Committee so some of the signatories to insurgent letter – Reps. Aaron Crossley, Marty Joe Murray, and Raychel Proudie – may miss the caucus as they will be doing markup…
GOP House Challenge Ahead
The Republican House leadership team of Speaker Jon Patterson and Floor Leader Alex Riley had a strong first half.
Their arena is obviously less fraught than the Senate. One lobbyist explains: “They have 110 Republicans and only need 82 of them to rubber stamp the Kehoe/Senate agenda.” But he also notes that they’ve avoided big unforced errors like stupid scandals that could derail things, and they’ve “kept the trains on the track.”
The second half will offer a more challenging environment…
· First, it’s normal for the relationship between the House Republicans and Senate Republicans to fray a bit as the legislative session gets into the later innings. There will be some confrontations over the budget or bill priority. And there’s an impulse to start keeping score about “who’s getting the better of the other.” The Senate usually insists that the House defer to its compromises because the House doesn’t have a filibuster-armed minority to contend with. Can JP and Riley prevent an ego cage-match from erupting on the third floor?
· Additionally, there is the potential for a new intrusion: the emerging urgency to nail down a package to keep the Kansas City professional sports teams within the state. An effort along those lines could reopen the rifts between leadership and the Freedom Caucus in both chambers. And it would anger other interests as well if their priorities aren’t funded (foundation formula, anyone?) but stadiums are.
OA Whistleblower Suit: State IT Infrastructure Vulnerable
Rodney Rice has sued the Office of Administration alleging he was retaliated against after whistleblowing on inappropriate procurement procedures. See the suit here. Rice identifies himself as the “former Director of OA’s Enterprise Project Management Office.”
From the suit…
· Shortly after he took over EPMO, Plaintiff discovered multiple irregularities in the PAQs submitted by or awarded to one particular vendor called World Wide Technologies (“WWT”)… As time went on, however, Plaintiff began to suspect a deliberate bias toward WWT in the state’s IT contracts.
· As Plaintiff began to dig deeper, he found that WWT had won a majority of the state’s “infrastructure” contracts even in cases where it did not submit the lowest bid... While Missouri has rules permitting the selection of clearly inferior bids, none of those rules had been followed in the case of WWT.
Most concerning is this passage… [Redacted] explained that the State’s IT infrastructure was not sufficiently decentralized and could be irreparably destroyed in the event of a catastrophic failure; to prevent the legislature and the public from learning just how vulnerable the State’s computer networks were, [redacted] and OA Commissioner Zellers were permitting SDC to bend the procurement rules when awarding projects WWT to ensure that the system was updated as quickly as possible.
Bayer Stock Drops on Latest Roundup Hit
Bloomberg reports that “Bayer AG’s shares dropped after the German conglomerate was ordered by a jury in the US state of Georgia to pay almost $2.1 billion to a plaintiff who claimed its Roundup weedkiller caused cancer, the latest setback in litigation that has already cost the company about $10 billion. The verdict, reached late on Friday, includes $65 million in compensatory and $2 billion in punitive damages, according to an emailed statement from plaintiff law firms of Arnold & Itkin LLP and Kline & Specter PC.”
· While the company has managed to resolve tens of thousands of individual Roundup suits over the years, there are still about 67,000 pending claims in the US, according to Bayer’s 2024 annual report. Bayer also needs to find a way to prevent new suits from being filed on the matter.
· The company said it has prevailed in 17 of the last 25 trials, and that it has succeeded in getting such damages reduced by 90% overall compared with original jury awards in cases that have reached final judgment.
Audit of DOR
Auditor Scott Fitzpatrick released an audit of the Department of Revenue, handing it a “Good” rating. See the audit here. The audit covered the time when Wayne Wallingford was the head of the department. The three shortcomings that Fitz focused on…
· The Department of Revenue (DOR) did not follow existing policy and procedures to ensure taxpayers are assessed the correct local sales tax rate for motor vehicle sales tax transactions. The audit reviewed 90 motor vehicle sales tax transactions for the year ended June 30, 2023, and identified 22 transactions (24 percent) with an incorrect site code resulting in the incorrect amount of local sales tax being assessed.
· Missouri's timely sales and use tax discount remains the most generous such discount in the nation, and significantly benefits the state's largest retailers. In addition, the DOR does not routinely report to the General Assembly the amount of timely sales and use tax discounts retained by businesses for its review and consideration.
· Even though the first sales of medical marijuana began in October 2020, and the first sales of adult use marijuana began in February 2023, the DOR has not conducted any audits of marijuana tax returns as of January 2025. Audits of tax returns are necessary to help ensure compliance with tax laws, prevent and detect fraud and tax evasion, and identify and correct errors and omissions.
Beige Book Highlights Farm Headwinds
The latest “Beige Book” from the St. Louis Federal Reserve notes a difficult environment for the agricultural sector. This is all anecdotal information, but the Fed is methodical about collecting it, so it’s not easily dismissed as “just talk.”
Agriculture conditions have deteriorated since our previous report and remain historically weak.
· Contacts noted that tariffs, policy uncertainty, and lack of clarity regarding Farm Bill safety nets were negatively impacting the sector.
· Some farmers also reported having no expectation of profits in the 2025 crop year, and others have gone out of business.
· Bankers expressed concern about this sector, noting that they must be cautious; many have tightened their credit standards for agriculture lending…
Proudie Preps Senate Run
Rep. Raychel Proudie amended her committee to run for Senate 14. Sen. Brian Williams is termed and reportedly eying a run at St. Louis County Executive. The Senate 14 Democratic primary has the potential to be a free-for-all.
Proudie’s kick-off will be June 14…
Murphey to Fed
Sam Murphey announced on LinkedIn that he’s now Vice President of External Engagement at the Federal Reserve Bank of St. Louis. Murphey was previously Chief Strategy Officer at Greater St. Louis, Inc. And before that he’d worked at Bayer.
Schaaf’s Hidden Lines
Former Sen. Rob Schaaf has created a technical analysis tool for stock trading. See it here.
See the pattern of this patent-pending technical indicator that shows where support and resistance are likely to be?.. Once you see the pattern, you can’t un-see it.
Gubby Appts
Governor Mike Kehoe made four appointments…
· Roye Cole, Amanda Grellner, and Kurt Marquart were appointed to the Missouri Sentencing Advisory Commission.
· Tasha Zach, of Rock Port, was appointed as the Atchison County Treasurer.
$5K+ Contributions
Safety and Justice Alliance - $15,000 from Decarcerate KC.
Lobbyist Registrations
Claudia Alley added Missouri County Collectors Association.
Birthdays
Happy birthday to Rep. Tonya Rush, Mike Gibbons, Chris Liese, Matt Bain, Kelly Schultz, and Tony Wyche.
Congratulations
To Kenny Ross winning the Pan IBJJF Jiu-Jitsu Championship.
