Open for business: Legislative session will repair state's business image
Monday, June 20, 2005
At the conclusion of the legislative session in mid-May, some suggested that Missouri had hit a business bonanza.
That may be a bit of hyperbole, but Gov. Matt Blunt and state lawmakers certainly have made giant strides toward righting the ship when it comes to making Missouri a more business-friendly state.
Though there will be several new laws on the books that impact business, two key pieces of legislation made their way through the General Assembly, the first all-Republican led state government since 1922.
The workers' compensation measure -- which overhauls the 80-year-old system -- was approved in March, even before the legislators' spring break. Long talked about tort reform also broke through after years of stalling.
The workers' compensation measure narrows the definition of what constitutes a work-related injury. The new law requires work be "the prevailing factor" instead of a "substantial factor" of the injury. It also makes people traveling to and from work in a company-owned car ineligible for compensation.
The legislation also adds language that gives more credence to practical medical findings over hard-to-quantify complaints of pain. To the chagrin of trial lawyers, it also sets limits on fees attorneys could collect in workers' compensation cases.
It was about time. Even though the number of workers' compensation claims have decreased by 17 percent since 2001, the average cost per claim has continued to rise, according to the Department of Labor and Industrial Relations.
Also, as Gov. Blunt and other supporters have pointed out, the legislation was an important step in repairing Missouri's marred reputation as a state with a workers' compensation system with out-of-control costs. That reputation has led many businesses and industries to cross Missouri off its list of potential places to relocate.
For businesses already here, the new workers' comp law offers relief from high premiums. That frees up capital for re-investment and expansion -- both of which could lead to an increased workforce.
The new tort reform law is another key component necessary for improving Missouri's image as a state unfriendly to business. The tort reform law requires that lawsuits be filed in the counties where the injury occurred. While some bemoan the fact that Missouri's new venue law is among the nation's most restrictive, others rightly point out that the new law simply brings balance to a court system that has been abused. No longer will lawyers be able to manipulate the system by filing lawsuits in cities that are notorious for outrageous judgments.
The law also scales back shared liability. The previous law unfairly held some defendants, even those only slightly at fault, responsible for paying the lion's share of damages. The new law requires shared liability only for defendants found to be truly at fault and only for actual, not punitive damages.
Tort reform also affects medical malpractice lawsuits by setting a $350,000 cap on non-economic damages. Higher caps previously in place were also hurting accessibility to good doctors who no longer found it feasible to practice in Missouri.
The new tort reform and workers' compensation laws will change the way potential employers look at the Show Me State. These are the laws most business owners wanted to see.
But perhaps the most controversial step Blunt and the legislature took was in cutting the Medicaid budget. Few can deny that the state's Medicaid program exploded during the past two administrations. In fact, one of about every seven Missourians were receiving some sort of Medicaid benefit during those years.
And while 100,000 Missourians of 1 million who now receive benefits are expected to lose coverage, only about 24,000 of them are elderly or disabled.
This was a program that needed to be reined in.
These initiatives have prompted Dan Mehan, president of the Missouri Chamber of Commerce, to say the session this year represents "one of the most pro-jobs legislative sessions of any state in the nation."