Taxes, education, ethics among key issues of 2018 legislative session

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As state lawmakers gather this week to launch the 2018 legislative session, they face many of the same tensions that held back action on some key issues last year.

The General Assembly will convene Wednesday, and Republicans will likely pick up where they left off in 2017, while also taking on new issues that have cropped up over the past year.

After a sweep of statewide offices in the 2016 election, the legislature was optimistic about pushing through bills with the help of Gov. Eric Greitens. While he made ethics reform a staple of his campaign, efforts to clean up the Capitol stalled in the Senate last year, and Greitens himself has been operating under a veil of secrecy.

The legislature is likely to tackle ethics reform once again in hopes of creating a more transparent system. With the passage of a tax reform bill in Washington, lawmakers will also have to decide whether to decouple Missouri’s tax system from the federal one.

The Senate will play a key role in the fallout of the recent ouster of the state’s education commissioner, Margie Vandeven. The Missouri Board of Education voted 5-3 to remove Vandeven in December, with all five votes coming from members appointed by Greitens in a span of four months.

The removal raised tensions between Greitens and the Senate. State Sen. Gary Romine, R-Farmington, has already mentioned filibustering Greitens’ appointees and filed Senate Bill 794, which would require the governor to notify the Senate in writing of any appointments made to state boards or commissions when the General Assembly is not in session.

As for Democrats, they’ll have to find common ground with the Republican supermajority to pass any part of their agenda. Both sides will work on tax reform.

Whatever the agenda, lawmakers will have to work within another tight budget year. Many significant cuts were made in last year’s session, including a 9 percent reduction for higher education. State leaders hope to avoid slashing the budget again this year, but they may have their hands tied.

Board of Education fallout

Greitens’ appointees to the education board were successful in removing Vandeven, but they face an uphill battle in the Senate, where they’ll still need to be confirmed.

Romine told the Springfield News-Leader in December he was prepared to filibuster all five nominations, but it’s unclear what support he has from other senators. Romine has complained about the way the governor used the system, saying the appointees “voted as a puppet of the governor.”

Rep. Kip Kendrick, D-Columbia, saw the process as a clear effort by Greitens to push the commissioner out of power, citing her bipartisan support.

“I’ve never heard anyone speak poorly of her or her performance,” Kendrick said.

Chuck Basye, R-Rocheport, wouldn’t comment on the governor’s involvement, but he was concerned about some of the support Vandeven received. He believes he was unfairly attacked by some of the school associations that supported Vandeven during a past campaign.

“They’re dishonest, they’re backstabbers, and I have no respect for those people,” Basye said of the school lobbyists. “She (Vandeven) might be a pretty good person, but when she’s getting that kind of support from those individuals, it makes me question what’s going on there.”

Columbia’s other Democratic representative, Martha Stevens, said she believes Greitens’ effort to remove Vandeven was used to push his agenda on moving toward a charter school model for public education.

“I think the way the governor went about ousting her was unnecessary,” Stevens said. “He stacked the board to have her removed, and I don’t agree with that tactic, especially when the education experts did not support that move.”

State budget and taxes

With the GOP passage of a federal tax reform bill, state lawmakers will need to decide whether to decouple Missouri’s tax code from the federal one.

Currently, Missouri’s laws link its tax code to the federal code, meaning any changes made to the federal tax reform bill will need to be made to Missouri’s tax code. Decoupling would unlink the state and federal tax codes, and Missouri wouldn’t have to mirror the changes made in the federal tax bill.

If the legislature doesn’t decouple the state’s code, the state’s standard tax deduction would double, which could result in a loss of revenue. Even so, Department of Revenue Director Joel Walters told The Associated Press the tax changes would have a minimal impact on the state budget and could result in a gain or loss of about $100 million.

Kendrick said it was “a very real possibility” the legislative session could finish without any decoupling from the federal tax code. He pointed to his concern over the Senate quarreling with Greitens.

State Treasurer Eric Schmitt in a Dec. 21 news release urged lawmakers to not decouple Missouri’s tax system, saying the tax cuts would have a positive impact on middle-class families. Basye agreed.

“I think most people, when they get extra money, they’re going to spend it in their community. That would generate additional tax revenue to the state,” Basye said.

Other tax-reform efforts are also being proposed.

State Sen. Caleb Rowden has filed a bill that would establish a state Earned Income Tax Credit, similar to the federal tax credit. Rowden’s bill would give Missourians a tax credit equal to 20 percent of the value of the federal credit.

“The (tax credit) is the best way that we can provide low- to middle-income individuals with tax relief,” Rowden said. “It’s a Ronald Reagan-endorsed program, and it’s something that I think is a very powerful and effective conservative way to help folks climb up the economic ladder.”

Tax cuts could provide relief for many Missourians but may also place a strain on the state’s already strapped budget. The 21st Century Missouri Transportation System Task Force is expected to recommend an increase to the gas tax on Tuesday, a tax that hasn’t been raised since 1996.

As a result, the Missouri Department of Transportation has been spending cash balances built up over time to pay for basic maintenance of Missouri’s roads. Those balances are running out.

Former attempts to raise the gas tax have failed in both the House and Senate, and Stevens said legislators must have the courage to defend an increase in the tax.

“The political reality is that people don’t want to be attacked for raising taxes, but we need to do this,” Stevens said. “It’s an investment for every community in the state, regardless of your political party. It’s a need that needs to be met.”

The Hancock Amendment prevents the legislature from raising the gas tax more than 2 cents per gallon, so a substantial revenue increase would have to come from a referendum on the 2018 ballot.

Both Basye and Kendrick said they were in favor of letting Missouri residents vote on a gas tax hike. Basye said his constituents supported it by a 2-1 margin in a district survey he conducted two years ago.

Basye said he wouldn’t support the referendum if some of the funding went to bike paths and hiking trails.

Kendrick said he hoped Missouri residents don’t see the gas tax increase as a “silver bullet” that would wipe away all of MoDOT’s funding problems.

Ethics reform

Lawmakers will once again take a stab at ethics reform, after the discussion hit a brick wall in the Senate last year. A ban on lobbyist gifts gained bipartisan support and passed in the House within the first two weeks of the 2017 session, but died in the Senate. Basye said the ban on lobbyist gifts would likely receive priority over other ethics bills this year.

Both Basye and Kendrick were confident that a bill would make it through the House without any issues, but neither would say whether it would make it through the Senate. Kendrick again expressed concerns over delays coming from the battle between Greitens and some state senators.

Kendrick said the Democrats will likely file all Greitens’ ethics reform campaign promises as bills this year.

Rowden has filed Senate Bill 614, which would ban lobbyist gifts. He’s pushed for ethics reform during his time in both the House and Senate.

“I think if there’s anything that we can do to help alleviate those concerns of corruption or whatever people’s concerns are, then I think we should do it,” he said.

Rowden said opponents of the ban on gifts argue that the system is already as transparent as it can be. They disclose what gifts they receive and believe the current system is fine. Rowden disagrees.

“I think there’s another layer, which is we have the opportunity and the responsibility to govern ourselves,” he said. “We should be a little more in tune with the will of the people.”

Stevens said getting ethics reform passed should be a key priority for both parties.

“It isn’t our job as public officials to receive lobbyist gifts,” Stevens said. “We are public servants. To get my ear, I wouldn’t ask a constituent to take me to a baseball game.”

Supervising editor is Mark Horvit, horvitm@missouri.edu.

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