AIM for Good Business Issue Articles
Nathan Dampf, AIM Director of Communications, 3/18/2011
AIM Opposes $45 million Tax Increase on Missouri Businesses
On Wednesday, the Senate Small Business, Insurance and Industry Committee, chaired by Senator Scott Rupp (R-St. Charles), heard Senate Bill 420 and Senate Bill 430; both relating to the Missouri Second Injury Fund. The sponsor of both bills, Senate President Pro Tem Rob Mayer (R-Dexter), filed Senate Bill 420 to dissolve the fund entirely, but later filed Senate Bill 430 to allow Second Injury Fund claims to be paid from an increase in the Workers’ Compensation Administrative Surcharge. This would result in a $45 million tax increase on business each year for at least three years.
AIM adamantly opposes the tax increase in SB 430 and issued a statement on Wednesday. AIM President Ray McCarty commented, “Associated Industries of Missouri opposes this tax increase on Missouri employers to support a broken system that currently allows employees to be compensated for non-work related injuries. We support eliminating the fund, which will mean employers will only have to pay for work-related injuries, which is the original purpose of the Workers’ Compensation Law.” AIM was joined in its opposition to the tax increase in SB 430 by many other business groups, including the National Federation of Independent Businesses, Missouri Retailers Association, Missouri Grocers Association, and the Associated Builders and Contractors.
The tax increase bill received the support of only three organizations: the Missouri Chamber of Commerce and Industry, Missouri Association of Trial Attorneys (MATA), and the Missouri Merchants and Manufacturers’ Association.
In Senator Mayer’s opening remarks, he said he originally intended to eliminate the Second Injury Fund, but was then approached by the Missouri Chamber with a different approach, which is contained in SB 430. Chamber representative Richard Moore stated in his testimony that the burden of funding Second Injury Fund claims should be borne by employers – not taxpayers.
The Missouri Second Injury Fund was created post World War II to provide additional assistance to wounded veterans who suffered a second injury in the workplace. Over the years, Missouri’s courts and policy-makers have expanded those injuries to allow individuals with non-work related injuries to make claims against the Second Injury Fund. The State Treasurer is the administrator of the fund, but the Attorney General is charged with defending the fund in the best interest of taxpayers. The Attorney General’s Office attended the hearing, but expressed neither support nor opposition to either bill.
Legislators moved quickly on several provisions this week before heading off to their annual Spring Break. Businesses had a few successes, including:
Workers’ Compensation Receives Approval by the Senate
Senate Bill 8 was approved by the Senate Thursday morning after being heavily debated for several weeks. AIM worked with senators and other business leaders to ensure “occupational disease” continues to be covered under the Workers’ Compensation system in Missouri. A judge recently opined that occupational diseases were not covered under workers’ compensation unless the disease was the result of an injury in the workplace. Most occupational diseases develop over time and are not the result of a particular injury.
The final version of the bill (Senate Bill 8) would prohibit subrogation of claims for employers that cause an occupational disease resulting from exposure to toxic materials. The current law allows employers in such situations to recover workers’ compensation payments made to employees that later recover damages from a third party. This change would not allow employers to recover such payments if the employer caused the occupational disease by exposing employees to toxic materials. The bill will now move to the House for further consideration.
RIGHT TO WORK BROUGHT UP FOR SENATE CONSIDERATION
The Senate, this week, had its first round of debate on the controversial issue of right-to-work legislation. Senate Bill 1, sponsored by Senator Luann Ridgeway (R-Clay County) was debated for three hours. The bill would change Missouri law by preventing any employer from requiring any worker to be a member of a union. The Senate upper galleries were filled with opponents of the legislation, primarily union members and supporters. The legislation was moved to an informal calendar, and we are unsure when the bill will be brought to the floor for additional debate.
“Save Our Secret Ballot” Gets Stamp of Approval from House of Representatives
On Thursday, just hours before legislators closed session for Spring Break, the House of Representatives approved a measure that would ensure a Missourians right to vote in any election by secret ballot. House Joint Resolution 6, filed by Representative Mike Cierpoit (R-Lee’s Summit) proposes a constitutional amendment that would protect Missourians’ right to vote by secret ballot in union elections and other elections. After the 2008 election, President Obama stressed the need for the Employee Free Choice Act which would eliminate the need to conduct a secret ballot election in unionizing efforts. The legislation was never approved and is now thought to be dead since the sweeping November 2010 elections. However, the National Labor Relations Board is pursuing similar policy through the federal rule-making process.
Unemployment Tax Increase Looming for Missouri Employers
AIM is continuing to explore options to avoid a tax increase of $21 per employee that would be paid with federal unemployment tax returns in January of 2012. Missouri has borrowed more than $823 million from the federal unemployment trust fund to pay claims to unemployed Missourians. This debt, and any additional amounts borrowed from the fund, must be repaid by November 10, 2011. If the debt is not repaid, the federal government will reduce FUTA tax credits for Missouri employers, resulting in an increase in your federal unemployment tax of approximately $21 per employee. This amount is NOT experience-rated, meaning every employer will be affected equally. If the debt is not fully repaid next year, employers will face a FUTA tax credit loss of approximately $42 per employee in January 2013, $63 per employee in January 2014, and more each year the debt remains unpaid.
Current Missouri statutes allow bonds to be issued to repay this federal debt, but there is a question whether the surcharge that is used to repay the bonds is subject to the Missouri Constitutional limitation on tax and fee increases. Because there is no court ruling interpreting the application of this constitutional limit to the surcharge used to repay bonds, we are working with legislators, the Office of Administration, the Missouri Department of Labor and other business groups to find a way to issue these bonds. Legislation that would extend the length of time the bonds must be repaid is stalled in the Missouri Senate over concerns that lengthening the bond repayment schedule will burden future employers and could extend into the next recessionary cycle.
PRESCRIPTIONS REQUIRED FOR PSEUDOEPHEDRINE
Last week, we informed AIM members that we opposed well-intentioned legislation that would have created a hardship for individuals and retailers by requiring a prescription for pseudoephedrine. The bill was filed to help stem the manufacture of methamphetamine and is heavily supported by Gov. Nixon and law enforcement. Last year, the legislature approved a registration system that has just now been fully implemented and registers pseudoephedrine purchasers in a statewide database.
This week, in the Senate unemployment debate, Senator Jim Lembke (R-South St. Louis County) and Senator Brian Nieves (R-Franklin County) stressed opposition to any legislation that hinders personal freedoms and civil liberties. Specifically mentioned was their opposition to the pseudoephedrine legislation and their firm stance to filibuster the bill and prohibit its passage.
TRANSPORTATION TO BE INCLUDED IN MISSOURI STRATEGIC PLAN
Senate Bill 173, sponsored by Senator Bob Dixon (R-Greene County) received approval by the Senate this week. The act creates an additional area of study for the Joint Committee on Missouri's Promise (similar to a strategic plan). The Committee would develop long-term strategies and plans for investing in, and maintaining, a modern infrastructure and transportation system and identifying potential sources of revenue to sustain such efforts.
FIRST STEPS TAKEN FOR COMPLIANCE WITH FEDERAL HEALTH CARE REFORM
On Thursday, the House Health Insurance Policy Committee held an executive session on House Bill 609, sponsored by Rep. Chris Molendorp (R-Cass County). This bill establishes the Show-Me Health Insurance Exchange required within the 2010 federal health care bill. The substitute establishes an exchange for individuals and small business to purchase health insurance. The bill also contains language regarding exclusion of supplemental policies. Federal funding is provided for the first year of the exchange and health insurance issuers are assessed a fee thereafter for administrative, capital costs and expenses. Confused about the federal health care legislation? Click here to register for AIM’s 2011 Health Care Summit next Wednesday in Columbia.
HOUSE BILL 252: BUSINESS BILL AND A GUN BILL AT THE SAME TIME
The House approved House Bill 252 on Thursday. HB 252, sponsored by Representative Stan Cox (R-Sedalia), establishes the “Business Premises Safety Act”. The bill prohibits business from being able to restrict firearms in their parking lots while also protecting business from liability associated with crimes that happen on the premises. AIM opposed the legislation in the past due to concerns that businesses were not protected if two gun crimes happened on the business premises, but Rep. Cox altered that provision after discussions with AIM leaders. Several Representatives expressed concerns over language included in the legislation regarding the safety of customers and language regarding the lawful carrying of firearms in vehicles. This legislation passed with a vote of 117-38.