MOScout Daily Update: Budget Concerns Deepen - CD-5 Talk - Wasinger Contra Senate Leadership - AIM Eyes Tax Policy and more…
Good morning. I have a few little nuggets left in my in-box. So I’ll be doing a second short update this afternoon…
Budget Concerns Deepen
I wrote yesterday that there’s a certain “tightening of the belt” occurring, and no increase in pay for state workers, and no increase to the foundation formula.
But there’s bipartisan concern that the budget situation is much more severe than that.
The ending balance of $4.6 million is down approximately 99.9% from the balance of $4.3 billion two years ago.
Still, the greater worry is that this is a structural deficit which was papered over this year using preemptive withholds and counting $850 million in lapses. Lapses are money that’s appropriated but unspent. There’s a lot of it every year in the budget for various reasons. The amount they’re expecting isn’t unreasonable, but to use it to get to a balanced budget is unprecedented – in recent years at least.
Beyond the structural deficit, another concern is whether the state can manage its cash flow with such little cushion. Counting on lapses and withholds to get to a teeny tiny balance seems to be inviting a cash management problem.
· MOScouter: So the Missouri budget is a Ten-Alarm fire. I’m actually completely freaked out about it. The next several years are going to be carnage beyond what anyone is currently comprehending.
Talk on CD-5
There’s still no announced candidates for the new CD-5, despite insistence from Republican statewide leaders that the map is “in effect.”
One part of the hesitancy is that there are numerous court battles. Another part is that many Republicans believe that voters will overturn the new lines. And even if the map is in effect for this election cycle, whoever wins will only have a single term before Democrats retake it with the old map.
The final factor is Sen. Kurtis Gregory – considered to be the front-runner. Others have been waiting to see if he decides to run. It sounds like he won’t run for the seat. And as a result, other names are being floated…
· Secretary of State Denny Hoskins – His former Senate district gives him a strong base of voters in the new CD-5. But having muscled the map for the GOP, it would look unseemly for him to turn around and run for Congress.
· Rep. Brandon Phelps – An ally of Gregory’s. If Gregory passes, he might jump in. See his bio here.
· Sean Smith – The Jackson County 6th District legislator is said to be eying the seat. See his profile here.
· Drew Dampf – The former Senate staffer who now directs Governor Mike Kehoe’s legislative efforts is an intriguing new name being floated.
AIM Raises Potential Concerns on Tax Plan
Associated Industries of Missouri has a blog post saying that they “look forward to learning more about Governor Kehoe's tax cut plan and his plan to replace the current $8 billion that is generated by the individual income tax…”
What they’re watching….
· [S]ervice businesses and those not currently collecting and remitting sales and use taxes on some transactions could face an increased burden. That burden would be administrative as they are faced with the burden of collecting and remitting the taxes and financial if taxing services and other transactions reduces the amount consumers spend for those services. Nearly all disputes between taxpayers and the Missouri Department of Revenue involve sales and use tax collection and administration.
· Texas and Tennessee… were cited by Governor Kehoe as examples of states with no individual income taxes. Texas generates revenue from a tax on profits, called a margins tax, instead of a state income tax. This tax is paid by all types of businesses doing business in Texas, including corporations, limited liability companies (LLC's), and partnerships. Tennessee generates more than 60% of their revenue from sales and use taxes, but the next largest source of revenue are two taxes on businesses: a franchise tax and a corporate tax of 6.25% on business income. AIM has successfully worked with the Missouri legislature to eliminate the Missouri franchise tax and reduced the Missouri corporation income tax to 4%, one of the lowest rates in the United States.
Wasinger Contra Senate Leadership
Lieutenant Governor David Wasinger tells Tim Jones on NewsTalksSTL about his current disdain for the Senate. “I think this state Senate is entirely dysfunctional. I think this place is a swamp that doesn’t want to be drained… I’ve made no secret I think the Senate rules need to be looked at. I just learned this afternoon that the Republican Senate leadership has instructed the Senate staff not to have any discussions with me or our staff about any rule change.”
· I get Dems talking about dysfunction because the usual tradition of negotiating to a compromise was supplanted with default PQs. But Wasinger talking about it is odd. All of Kehoe’s major priorities including takeover of St. Louis police and general revenue funds for school vouchers passed the Senate. Capital gains tax elimination passed the Senate. Major utility regulatory overhaul passed the Senate. Reversal of Prop A sick leave passed the Senate. Sending changes to IP process to voters passed the Senate. Sending abortion back to the voters passed the Senate.
And
Wasinger celebrated 1 year in office on Twitter. Not sure touting “decorating the office” as an accomplishment is exactly anti-swamp… …
Overdose Treatment Cuts Reversed
NYTimes reports that the “Less than 24 hours after the Trump administration informed more than 2,000 addiction and mental health programs nationwide that it was immediately terminating almost $2 billion of their funding, the administration reversed course and reinstated the money.”
· Missouri’s statewide association of emergency medical services workers, a nonprofit professional organization, had learned that $5.2 million is being slashed from programs that train staff to administer and distribute overdose reversal medication, as well as talk with people in crisis about mental health and addiction treatment programs.
Gubby Appts
Governor Mike Kehoe announced that Austin Crowe, of Jackson, was appointed as the Associate Circuit Judge for Cape Girardeau County in the 32nd Judicial Circuit.
eMailbag
This could be the “Year of the Return of the Reps” with Tony Lovasco already running and maybe Jeff Shawan. Travis Smith and Chris Dinkins are rumored to be considering as well
$5K+ Contributions
Conservative Justice for Missouri PAC (pro-Hanaway) - $7,500 from Comcast Financial Agency Corporation (Philadelphia, PA).
Missouri First - $15,000 from Republic Services (Phoenix, AZ).
Brad PAC (pro-Hudson) - $15,000 from Paladin PAC.
Spirit of Missouri - $7,500 from Clean Grid Association (Saint Paul, MN).
Lobbyist Registrations
John Bardgett, Jacqueline Bardgett, Chris Roepe, and Braydon Pemberton added Missouri Retired Teachers Association; and deleted Action Now Initiative LLC, Hannibal Regional Healthcare System, and Hickman Mills C-1 School District.
Heath Clarkston, Mike Henderson, and Doug Nelson added American Adoptions.
David Winton, Jessica Petrie, and Matthew Thompson added Novartis Pharmaceuticals Corporation.
Jay Reichard deleted Practical POCUS.
Happy Birthday
Happy birthdays to Brendan Cossette and Virvus Jones.
MOScout Schedule
No Weekender edition coming up. I’ll be off for the long MLK Day weekend.