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Jobs, schools and budget cuts top Missouri legislative agenda

Just two months after a special legislative session widely viewed as a bust, Missouri lawmakers will return to the Capitol on Wednesday to take another run at creating jobs, dealing with Kansas City’s unaccredited school district and wrangling with a budget requiring hundreds of millions of dollars in cuts.

It will all happen against the backdrop of the November elections that will determine whether Democratic Gov. Jay Nixon gets a second term and whether dozens of senators and representatives win more time in office.

“My experience is that in an election year, it’s always tougher to get parties to work together because people are posturing for the election,” said state Rep. Ryan Silvey, a Kansas City Republican and chairman of the House Budget Committee.

And it may be even tougher this year because of all the ill will generated by the special session last year. Although that session cost taxpayers nearly $300,000, lawmakers failed to accomplish their chief task, which was passing a bill aimed at creating thousands of new jobs.

Hardball negotiations between the House and Senate resulted in an almost complete breakdown in relations between Republican leaders of both chambers. In October, House Speaker Steve Tilley insisted that he had been lied to by Sen. Rob Mayer, the Senate president pro tem.

Mayer, in turn, accused House leaders of doing the bidding of deep-pocketed developers eager to hang onto a pair of costly tax-credit programs. All this came after the two had toured the state during the summer to announce a breakthrough deal.

“I don’t like going down to Jefferson City and wasting our time,” said state Sen. Will Kraus, a Lee’s Summit Republican.

Legislative leaders now insist that they have patched things up. In fact, Tilley and Mayer recently had dinner to lay plans for 2012.

“I don’t think he holds any ill will,” Mayer said. “I’m putting behind me what happened.”

Leaders said they plan to begin the session by passing several bills that both chambers can quickly agree on, including reforms to the state’s workers’ compensation system for injured workers, and an effort to shore up the beleaguered Second Injury Fund, which covers certain workplace injuries that aggravate pre-existing conditions.

The goal, they said, is to get some of the bad blood behind them.

In March, Attorney General Chris Koster began withholding payments on new disability awards to stave off Second Injury Fund insolvency.

“We’re going to move a few priorities quickly,” said Rep. Tim Jones, a Eureka Republican and House majority leader. “This way, in the last few weeks of the session when things get tense, we can say we’ve already accomplished those priorities.”

Budget woes

The new session could well be dominated by a single concern — the state budget.

The next spending plan is thought to be $400 million to $900 million underwater, which will require another round of intensive budget cutting.

That so much more must be cut after hundreds of millions have been slashed in recent years is due to the drying up of federal stimulus dollars that have propped up the state in recent years, and the soaring costs of such programs as Medicaid, the health-care program for the poor.

“That program is growing so fast that it’s outpacing our growth from the economy,” Silvey said.

One other factor: With the state’s jobless rate hovering around 9 percent for much of the year, those unemployed workers are paying far less sales tax than they would if they held jobs. That’s held state revenue down, Silvey said.

State revenue is expected to grow 3.9 percent in the next fiscal year. According to estimates, the state anticipates about $7.6 billion in revenue for the 2013 fiscal year.

Members of both parties said they were committed to staving off cuts to public schools. State leaders have kept funding for education steady in recent years, but it has not seen increases.

“We’ll have to work our butts off to make cuts elsewhere,” said Rep. Myron Neth, a Liberty Republican.

Silvey’s Budget Committee managed a series of unanimous, or near-unanimous, votes last year when it faced a similar $700 million budget hole. But that type of unity in an election year could be tougher to achieve, he said.

“The way I see it, everybody understands that we have a major problem,” Silvey said. “The voters understand it. Members of the legislature understand it. I think the people expect and the people deserve for us to sit down as adults and solve the major problems facing the state. I’m hopeful we can do that.”

Kansas City schools

Perhaps the most pressing issue for Kansas City-area lawmakers will be what to do — if anything — about the Kansas City Public Schools, which are slated to lose their state accreditation today. St. Louis’ district also is operating without accreditation.

In Kansas City, controversy already is brewing. Mayor Sly James has said he wants to assume control of the district. But some lawmakers, including Sen. Victor Callahan, an Independence Democrat and Senate minority leader, don’t want to go in that direction. Callahan said mayoral takeovers in other cities have been plagued with problems.

“It has not been a magic bullet,” Callahan said.

But James has vowed to push ahead, believing that the best way to retain some semblance of local control is for him to assume responsibility for the district’s day-to-day operations. Under his plan, the elected school board would be eliminated.

Lawmakers have any number of options, including allowing for an eventual state takeover, creating some form of mayoral oversight, or allowing adjoining districts to assume administrative duties. Yet another option is abolishing the district and parceling out students to neighboring school districts.

“It’s all over the board,” Neth said of the options on the table.

Lawmakers already are engaged in conversations with Missouri Education Commissioner Chris Nicastro. In November, Nicastro delivered a draft resolution calling for members of the Kansas City School Board to step down on Jan. 1. Since then, James has floated the idea of having his office assume responsibility for the district. Nicastro has since said she wants more time to study the situation.

Silvey said lawmakers also are discussing the impact of court rulings that school districts around the state must accept students from unaccredited districts who are seeking transfers. The ruling said unaccredited districts must pay tuition to cover education costs for the transferring student.

But officials in some nearby districts insist they’re at capacity and can’t absorb large numbers of Kansas City students. Lawmakers are looking at what obligations those districts should have.

“We need to be on the same page as to what we want to see done,” Rep. Mike Talboy, a Kansas City Democrat and House minority leader, said of Kansas City’s delegation.

Job creation

Even though last fall’s special session aimed at job creation was largely unsuccessful, Nixon is vowing to return this year with another jobs package — this one aimed at Missouri’s automotive industry.

Last fall, Ford Motor Co. unveiled a $1.1 billion plan to add a second manufacturing line this year at its Claycomo plant. The investment is expected to result in 1,600 new jobs.

GM, meantime, has announced a $380 million investment that will result in 1,850 jobs at its assembly plant in Wentzville, west of St. Louis.

Nixon wants to capitalize on that progress.

“As Ford and GM both make historic investments in Missouri and create thousands of automotive manufacturing jobs, we also want to use this landmark opportunity to expand Missouri’s auto supplier network,” Nixon spokesman Sam Murphy said.

“We’ll be looking at a number of tools to create jobs by attracting new suppliers to the state, helping existing Missouri suppliers expand, and ensuring that those suppliers have access to a highly trained workforce.”

Legislative leaders appear to be shying away from revisiting last fall’s job package, including the creation of an air cargo hub at Lambert-St. Louis International Airport. But they may address individual components of that package, including a plan to attract computer data centers to Missouri, some of which might locate in Kansas City.

Mayer said plans to cap and cut spending in the state’s two largest tax-credit programs for low-income housing and historic preservation almost certainly will be considered. But he said prospects for any change remained unclear.

Labor issues

Republicans are pushing two ideas they contend would boost job growth: prevailing wage and right-to-work legislation.

Right-to-work states, such as Kansas, prohibit union membership as a condition of employment. Prevailing wage laws are designed to ensure that both union and non-union contractors have a fair shot at obtaining contracts.

State Rep. Bill Lant, a Joplin Republican, has filed a bill that seeks to exempt areas of the state that have been declared disaster areas from prevailing wage laws. The proposal is backed by several Republicans, including Lt. Gov. Peter Kinder.

But labor supporters said those Republicans are playing politics with disaster recovery.

Last year, lawmakers briefly considered right-to-work legislation, but it died. This year, Mayer said it’s bound to come up again.

“If we really want to do something to help Missouri and grow our manufacturing base and grow a large amount of revenue, we’re going to have to do something different,” Mayer argued. “It’s healthy to have the discussion.”

Many Democrats, however, stand solidly against any changes to labor laws. They maintain that the GOP’s interest in raising the issue is about ginning up enthusiasm among Republican voters in an election year.

“It’s a flawed idea right from the onset,” Talboy said. “Right-to-work has been shown to be nothing more than just a way to bust a union. It’s a wedge issue akin to gay marriage.”

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