State chamber says agenda got lawmakers to focus on business

Changes passed in the Missouri Legislature this year will save businesses $200 million annually, according to the Missouri Chamber of Commerce and Industry.

"We were able to get the House and the Senate to really focus on business issues by putting together the Fix the Six coalition," said Tracy King, vice president of governmental affairs with the chamber. "While we didn't get all six of them, it brought some unity to the business community and those we did pass were significant."

The Fix the Six agenda, announced in January, advocated changes in six areas: corporate franchise tax, unemployment insurance, employment law, workers' compensation, minimum wage and torts.

Rep. Wayne Wallingford, R-Cape Girardeau, said he believes legislation passed this session will help make Missouri a better place to do business.

"My job as a legislator is to make the business environment good and make good policies that will encourage businesses to expand, grow and relocate in Missouri," Wallingford said.

Franchise tax

After 10 years of pushing for the elimination of Missouri's corporate franchise tax, the measure was the first of the Fix the Six priorities sent to Gov. Jay Nixon.

Business groups viewed the tax as excessive because businesses pay franchise tax on assets and inventory in addition to property and income taxes. Senate Bill 19 will reduce the franchise for the next several years before eliminating it for the 2016 tax year.

The bill also freezes what businesses are required to pay under the tax so that firms would not pay more than what they paid last year.

"They'll be able to take the savings from the money they are giving to the government now and focus more on applying those savings to investments, which should lead to hiring more people," King said.

Wallingford said eliminating the franchise tax will give businesses an incentive to expand.

"The tax is not conducive to grow or expand if that means you'll have to pay more taxes on a new building or increased inventory, even if you're not making more of a profit. We all expect to pay taxes on profits," Wallingford said. Because Missouri was one of only a few states that have this tax, it also deterred businesses from moving to the state, he said.

Eliminating the franchise tax will result in a loss of $87.5 million in general revenue by the time it is phased out, according to the fiscal note attached to the bill.

Unemployment benefits

Changes to Missouri's unemployment insurance program will also save businesses money in the coming year. The state will reduce the number of weeks it pays unemployment benefits from 26 weeks to 20 weeks, saving employers $108 million annually. House Bill 163 also included provisions to prevent unemployment benefit fraud. Benefits will no longer be paid to workers who owe penalties or must repay undeserved benefits, saving an estimated $16 million annually.

While this is good news for businesses, the unemployment insurance measure passed by the legislature did not address how the state will pay back the $862 million it has borrowed from the federal government to fund its unemployment insurance claims over the past two years.

The chamber wanted the state to issue bonds to repay its federal unemployment loans. If these loans aren't repaid by November, the federal government will take away tax credits from Missouri employers and use the additional taxes collected to pay off the state's debt.

Employment law

Although Senate Bill 188 was approved by the House and Senate, Nixon vetoed the measure that would have changed Missouri's employment discrimination law.

"We were definitely disappointed," King said.

"There was a lot of distortion. It was made out like we were trying to legalize discrimination. We were only trying to change Missouri law to mirror federal law," King said.

Advocates said businesses were at a disadvantage because the state's laws are more favorable to plaintiffs than federal discrimination laws. Under Missouri's Human Rights Act, discrimination must be a contributing factor in the case for an employer to be liable. Federal law says discrimination must be the motivating factor.

Workers' compensation

The debate over changes to Missouri's workers' compensation law went down to the final hours of the legislative session; however, lawmakers could not reach a consensus, King said. Senate Bill 8 attempted to turn back decisions in two court cases that allowed employees injured at work to sue their employers or co-workers in addition to making claims in the traditional workers' compensation system.

Minimum wage

A measure to cap Missouri's minimum wage at federal levels was approved by the House this session but never came up for debate in the Senate. House Bill 61 would have eliminated the Missouri's minimum wage escalator, which raises the minimum wage with any cost-of-living increase measured by the Consumer Price Index.

Tort reform

Efforts to change the way damages are calculated in civil liability cases didn't progress far this session. House Bill 364 would have moved Missouri to a pure several liability system, in which defendants would only be held liable for the amount of damages equal to their percentage of fault.

Currently, if the court finds one defendant 51 percent at fault, that defendant must pay 100 percent of the damages.

The bill stalled in committee, but King said it's likely to be proposed again next year.

mmiller@semissourian.com

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