January 3, 2018 - Kehoe is the Statesman of the Year by Missouri Times

The Missouri Times

JANUARY 3, 2018

STATESMAN OF THE YEAR

Mike Kehoe

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What does federal tax reform mean for Missouri?

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VANDEVEN OUT A look back at a crazy end to DESEâ&#x20AC;&#x2122;s 2017

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Missouri Times

OPINION

The

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Build that wall!

By Scott Faughn, Publisher

Throughout time, from Nehemiah to St. Louis City Hall, building a wall has been a common sense move to either keep people in or keep them out. Even our President got elected promising to build a wall on the Mexican border as a way to keep those wanting to illegally immigrate to the United States from doing so, or I guess to keep Americans wanting to illegally immigrate to Mexico from doing so. Since I have no plans to illegally immigrate to Mexico, it makes little difference to me, but now we in Missourah finds ourselves with a problem of a similar nature. We are being overrun with bureaucrats from the east coast. Bunches of ’em with some fancy Ivy League degrees flocking to the Show-Me State to get on the gub’ment dole – most all of ’em without sense enough to come in out of the rain. One more arrogant than the next and most of ’em act like they are on some kind of a Peace Corps mission to straighten out our backwater of a state. They obviously view things differently in the Central West End, but if I wanted to live in New York, or Boston, or Atlanta, I would go live there. I like Missourah and live here for a reason, because it’s better – a hell of a lot better. We are faced with the very urgent need to keep the east coasters out, it makes sense that we oughta follow the lead of our President and build a wall of our own on the western bank of the Mississippi to keep the east coast bureaucrats out. If Illinois wasn’t so broke, we maybe could get them to pay for it. Kudos to Governor Eric Greitens for following the lead of Lt. Governor Mike Parson and taking steps to clean up the mess at the veterans home. It’s something our state should get right, and it looks like the Governor is going to be directly involved and get things on the right track. Speaking of the veterans home, the Post-Dispatch’s Tony Messenger is still red hot. The Post’s leading columnist should be as happy as I am eating cake, or Eric Greitens getting a call from a 202 area code with his recent ability to move the needle.

His reporting brought many of the issues at the veterans home to light. Following the Governor taking his direct lead on gutting rural Missourah LIHTC funds, he has led on this issue as well. You ought to read Messenger’s column, it’s clear that the Governor does. It’s getting darker and darker for the Sunshine Law in Missouri. It’s clear that to the newly elected outsider political class with the Washington boys’ funded views, those annoying constituents asking for access to records they paid for under their Sunshine Law are petty annoyances who clearly didn’t give enough to the dark money fund. A lot has been made of Attorney General Josh Hawley’s comment that he was gonna quit enforcing the Sunshine Law. Well, I think folks ought to take a breath and give Hawley a little time to make a good decision here. He may have a point that there is a bit of a conflict for him as a bureaucrat himself defending the bureaucracy against the public to also turn around and represent that same public demanding access to their records from that same bureaucracy he is a part of. Look, maybe the worst case scenario is happening and Hawley may in fact be saying that a farmer in Scott County, or a gun store owner in Cass County, who is forced to pay the taxes that pay the bureaucrats’ salary, including Hawley’s very generous salary, ain’t got no business getting a copy of those records their taxes paid for. If he is actually saying that, then, of course, he doesn’t belong in the U.S. Senate. It would be a real shame to put someone who thinks so lowly of Missourians, and so highly of the bureaucracy in the Senate representing a state once represented by Senators Symington, Hart Benton, Truman, and Bond. I’m just saying before pouncing on him, give him a chance to think about this and come up with a policy. He might even come up with something that is better than what we have now. Up until to now, I’d say most folks feel that he has done a fine job, so maybe folks oughta give him a couple weeks to come up with a plan. If he does decide that gub’ment in darkness is the best gub’ment, then his frequent claims that he isn’t like Greitens obviously doesn’t ring true. What should be obvious to all is that the Sunshine Law needs rebooting. The Sunshine Law has become an analog law in a digital age. Or maybe more accurately a MySpace law in a Confide age. I’m just a simple hillbilly, but by God, if a bureaucrat does something on the public dole, the public who pays for their livelihood is entitled to any and every record they produce. It’s the Show-Me State, and that should go for everybody including the bureaucrats who work in domed buildings too. Read Faughn’s Hillbilly Briefs and more online at themissouritimes.com

The Missouri Times

TWEETS OF THE WEEK

Highlights in 140 characters or less. Chuck Hatfield @chuckhatfield Die Hard wisdom still relevant today: “We’re going to need some more FBI guys, I guess.” Becky Lohmann @RLLohmann The annual family brag letters are my favorite Christmas tradition. “Jenny graduated law school with honors. Dan is married and just had a baby. And Billy lives in Chicago.”

Greg Razer @gregrazer Dec 24 #ChristmasInCooter pajamas!

Tracy McCreery @TracyMcCreery Governor @EricGreitens should grant clemency for Patty Prewitt http://www.stltoday. com/opinion/columnists/ greitens-should-grant-clemency-for-patty-prewitt/articlea77a4b12-fbc5-5962-8f0a-4bb18b4ad4cf.html #mogov #moleg

HOT LIST

ALISHA SHURR

New on staff at the Missouri Times, be sure to give a Missouri welcome our newest reporter, Alisha Shurr.

RON RICHARD

He’s the man to watch

PHOTO OF THE WEEK

this week as eyes turn to the 60+ gubernatorial recess appointments.

Springfield, for her role in a 1982 murder.

JUDY HENDERSON

On the way to the playoffs...and maybe the Super Bowl - just like the Governor predicted - or jinxed.

For the first time, Gov. Greitens’ has commuted a sentence. The lucky woman? Henderson, of

KC CHIEFS

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SUNDAY MORNINGS KANSAS CITY - 38 THE SPOT AT 10:00 A.M. ST. LOUIS - ABC 30 KDNL AT 11:00 A.M. SPRINGFIELD - MCN 22 AT 11:00 A.M. MID-MISSOURI - MCN 22 AT 11:00 A.M.

STREAM ONLINE AT TWMP.TV

The Missouri Times

Kehoe defining his legacy through infrastructure policy, patient dealmaking

The Missouri Times presenting Kehoe with inaugural Statesman of the Year award after legislative lapse in his absence once there, the Senator quickly established himself, putting his experience and knowledge on a variety of topics, ranging from unemployment reform, workers’ compensation, transportation and various business matters, to use developing legislation. Upon entering the Senate, Kehoe chose to take on perhaps the most complicated issue

PHOTOS PROVIDED COURTESY OF MIKE KEHOE

he still is involved with today. “Mike Kehoe is one of the finest people I know,” Gov. Matt Blunt said. “He is an absolute personification of the American dream. His devotion to his faith, his family and his country are sincere and real. Beyond all that he is a real leader and public servant who is not afraid to tell others the truth. I admire him greatly and am proud to count him as a friend.” Kehoe’s first real venture into the political realm came when he volunteered in 2004 to help Matt Blunt’s 2005 gubernatorial campaign. After his successful campaign, Governor Blunt appointed Kehoe to the Missouri Highway and Transportation Commission. “That really got me interested into the going ons in Missouri,” Kehoe said. “It really opened my eyes to what was going on. I thought Missouri needed a change. We needed someone who understood that business friendliness in the state and what we could do to create jobs in the state all ties back to how we treat our

employers, particularly our small businesses. I was an aggravated taxpayer, to be honest.” He would ultimately leave the highway commission and, despite never having held an elected office, decided to run for State Senate to succeed the well-respected Carl Vogel in 2010, where he came out on top in a four-way primary to run unopposed in the general election. “It’s almost impossible,” Kehoe said when asked about how one can replace a figure as polarizing as Vogel. “Carl was a friend of mine for a long, long time, almost as long as I’ve been in Jefferson City. To be honest, his service to the state and the people was inspiring, and when I decided to run for office, he was one of the people I talked to.” Vogel’s shoes were large ones to fill, but

the infrastructure in place to maintain that advantage and keep our economy thriving.” His counterpart, the Senate Minority Leader Gina Walsh echoed compliments for his work on infrastructure issues, “I have always appreciated and respected Sen. Kehoe’s willingness to work across the aisle with us on issues important to all Missourians.” One of Kehoe’s most notable contributions to that debate was his handling of the constitutional amendment that would have raised the state’s sales tax for transportation – an effort that failed in August 2014. “His work on the state’s infrastructure was one most often cited as a reason to honor him. Back in the 1850s, Governor Austin King began an infrastructure plan to build railroads that led to Missouri doubling in population,” Faughn said. “If Senator Kehoe is ultimately successful in updating the state’s utility and highway infrastructure, he will be remembered in the same vein.” But Kehoe says that the good news about the transportation debate is Missourians no longer seem to question that more money is needed. Instead, he says, the debate is solely centered on how to get the money and how it should be utilized. To that end, he takes hope, saying that a middle ground can still be found. Early in his career in the Senate, he was elected Assistant Majority Floor Leader, and later Floor Leader, a role that in the current climate of Republican supermajorities, requires an element of negotiating and diplomacy, as well as a firm hand all at the same time. “There’s a lot of personalities in the Missouri Senate,” Kehoe chuckled. “You just have

It’s not a business where you can draw a line in the sand and stop talking to people; you have to continue to communicate. SEN. MIKE KEHOE

PHOTO/JULIE SMITH NEWS TRIBUNE PROVIDED COURTESY OF MIKE KEHOE

In celebration of the 5th Anniversary of The Missouri Times, staff, subscribers, people in the business community, and a group of long time Capitol observers combined to select the 2017 Missouri Statesman of the Year. The inaugural honoree is Senator Mike Kehoe, Cole County. We asked this collection of influential Missourians to help us identify someone who consistently worked on causes bigger than themselves, whose impact on the state will be felt after their career was over, and someone who worked to find compromise on issues in the mold of the former great men and women who have served the state and preserved the traditions that have made Missouri the great state it is. Senator Kehoe was the overwhelming choice. “To me, a statesman is someone who puts the state ahead of themselves,” Missouri Times Publisher Scott Faughn said.” We’re sometimes trapped in an era where leaders are always looking to their next office the day after winning their current one, some of our newest politicians only think as far ahead as the next Facebook post. Senator Kehoe works on projects like highways and utility infrastructure issues that require sacrifice and foresight of today’s generation for the benefit of the next generations of Missourians. To me that is what a statesman does and that’s why we are proud to honor Senator Kehoe.” This year will be his last in the Senate, due to term limits, but the impact he has had on Missouri will be a long lasting one. Many people know his story of being raised in the St. Louis area by his mother, a single parent with six children. At the age of 15, he started washing cars for Dave Sinclair Ford, and worked his way up into sales management. After graduating from Chaminade College Preparatory School, he was given an opportunity to lead Osage Industries at the age of 25. After selling the company to the employees in 1992, he purchased a Ford and Lincoln-Mercury auto dealership in Jefferson City, which

in state government: transportation. He came well-versed in the issue, having spent more than 30 years working in the industry. Kehoe would be praised by both sides of the aisle as one of the mature legislators offering real solutions to provide the much-needed funds to maintain the state’s more than 3,000 miles of highway. “Mike Kehoe is a great friend and great public official,” U.S. Senator Roy Blunt said. “He truly understands the importance of transportation and infrastructure to our state and our economy, and has been an incredible leader on those issues. For Missourians, location is our greatest competitive advantage. Mike has worked tirelessly to ensure we have

KEHOE | CONTINUED ON 13

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Halfway through FY2018, over $165 million currently restricted With $1,000,413.00 released of $169,442,861.00 restrictions, $168,442,228 currently remains restricted as future restriction rumors loom. Restrictions increased last fiscal year over the previous with FY2017 seeing $388,644,981 in restrictions with $36,940,077 released. FY2016 saw $48,187,508 in restrictions with just below $7.5 million released. State Budget Director Dan Haug announced on December 4 that November 2017 net general revenue collections increased 8.2 percent compared to November 2016, from $687.2 million last year to $743.8 million this year. CURRENT FY2018 RESTRICTIONS Agency Name Restricted Amount Released Amount OFFICE ADMINISTRATION CAPITAL IMPROVEMENTS $47,000,000.00 $0.00 HIGHER EDUCATION $35,088,654.00 $0.00 MENTAL HEALTH $18,442,603.00 $0.00 ELEMENTARY AND SECONDARY EDUCATION $15,259,713.00 $0.00 ECONOMIC DEVELOPMENT $10,123,860.00 $0.00 SOCIAL SERVICES $9,835,362.00 $407,105.00 OFFICE OF ADMINISTRATION $9,026,609.00 $0.00 AGRICULTURE $4,000,000.00 $0.00 REVENUE $3,655,000.00 $0.00 PUBLIC SAFETY $3,520,698.00 $186,203.00 PUBLIC SAFETY $3,520,698.00 $186,203.00 REVENUE $3,655,000.00 $0.00 SOCIAL SERVICES $9,835,362.00 $407,105.00 TOTAL $172,963,559.00

$1,186,616.00

FY2017 RESTRICTIONS Agency Name Restricted Amount Released Amount AGRICULTURE $23,279,632 $5,928,924 CORRECTIONS $4,706,399 $201 ECONOMIC DEVELOPMENT $25,704,600 $0 ECONOMIC DEVELOPMENT CAPITAL IMPROVEMENTS $3,000,000 $0 ELEMENTARY AND SECONDARY EDUCATION $47,350,768 $16,385,538 HEALTH AND SENIOR SERVICES $2,853,870 $0 HIGHER EDUCATION $91,249,112 $743,549 HIGHER EDUCATION CAPITAL IMPROVEMENTS $29,825,000 $7,475,001 JUDICIARY $1,409,728 $56,864 LEGISLATURE $1,055,000 $0 MENTAL HEALTH $11,908,424 $400,000 NATURAL RESOURCES $1,440,000 $0 NATURAL RESOURCES CAPITAL IMPROVEMENTS $3,700,000 $1,700,000 OFFICE ADMINISTRATION CAPITAL IMPROVEMENTS $1,000,000 $0 OFFICE OF ADMINISTRATION $19,724,561 $0 OFFICE OF SECRETARY OF STATE $4,136,000 $0 PUBLIC DEFENDER $3,500,000 $0 PUBLIC SAFETY $12,201,632 $3,250,000 PUBLIC SAFETY CAPITAL IMPROVEMENTS $500,000 $0 REVENUE $2,472,524 $0 SOCIAL SERVICES $67,301,481 $1,000,000 TRANSPORTATION $25,754,250 $0 TRANSPORTATION CAPITAL IMPROVEMENTS $4,572,000 $0 TOTAL $388,644,981

$36,940,077

FY2016 RESTRICTIONS Agency Name Restricted Amount Released Amount AGRICULTURE $500,000 $0 ELEMENTARY AND SECONDARY EDUCATION $825,000 $575,000 HEALTH AND SENIOR SERVICES $4,419,658 $650,000 LEGISLATURE $1,231,939 $118,312 MENTAL HEALTH $12,650,084 $0 NATURAL RESOURCES CAPITAL IMPROVEMENTS $500,000 $500,000 OFFICE OF ADMINISTRATION $1,557,231 $0 OFFICE OF STATE TREASURER $250,000 $0 REVENUE $2,950,000 $0 SOCIAL SERVICES $18,365,809 $650,000 TRANSPORTATION $3,000,000 $3,000,000 TRANSPORTATION CAPITAL IMPROVEMENTS $1,937,787 $1,937,787 TOTAL $48,187,508

$7,431,099

NUMBERS COURTESY OF THE OFFICE OF ADMINISTRATION.

Court of Appeals rules Governor did not overstep by withholding funds from Public Defenders

Benjamin Peters

benjamin@themissouritimes.com It seems the Missouri Public Defender System is subject to withholds from the Governor, despite being from a different branch. According to the Western District Court of Appeals ruling issued on Tuesday, the Governor’s Office did not violate separation of powers by withholding funds from Public Defender’s office. The case stems back to Gov. Jay Nixon’s decision to restrict a $3.5 million increase from the office’s budget in 2016. The public defenders have been asking for additional resources to deal with an overworked staff and increased caseload, and following Gov. Nixon’s restrictions, filed a lawsuit claiming that their agency was part of the judicial branch and not part of the executive branch. Public Defender Michael Barrett argued that the constitutional provisions allowing the governor to limit spending when revenue fails to meet estimates did not apply. He asked for a ruling that Nixon had exceeded his authority by imposing a permanent reduction instead of a temporary restriction, as well. Judge Jon Beetem dismissed that second claim, stating that it came before the end of the fiscal year and was unknown. He also ruled against the other claims, stating that the defender system is an agency of the state and subject to the governor’s withholding power. In Tuesday’s ruling by the Court of Appeals, Judge Victor Howard wrote that all of the claims should have been dismissed as premature. He also outlined that the defenders fulfill the state’s obligations to provide legal counsel, and serves as a state agency under the definition. “Despite the General Assembly’s designation of the public defender as an independent department of the judicial branch, the public defender does not exercise judicial power in representing indigent defendants,” Howard wrote. “It does not try and decide cases in controversy and pronounce judgments on them. Because the public defender does not exercise judicial power, a withholding of expenditures to it by the governor (the executive) does not violate the separation of powers doctrine.” Read the ruling in its entirety online at themissouritimes.com.

The Missouri Times

Paid for by Missouri REALTORS®, John Sebree, CEO.

Support the Missouri First-Time Homebuyer Initiative Here’s how the program works:

Most Americans still dream of owning their own home. Homeownership strengthens communities, provides stability for families and helps build financial strength. But saving enough money for a down payment and closing costs is too hard for many Missourians—especially for young people and those looking to buy their first home. Low paying jobs, the cost of living and high student loan payments are tough obstacles to overcome. Many people don’t know where to start. That’s why we need the Missouri First-Time Homebuyer Initiative—a new idea to help prospective homebuyers save for their first home.

• Individuals could deposit up to $16,000 ($32,000 for couples) annually into a savings account to go toward a first home purchase.

We should be doing more to help first time homebuyers—not with government handouts but by providing incentives to encourage people to save more of their own money towards the cost of a home. That’s why we need to ask our legislators to approve the Missouri First-Time Homebuyer Initiative.

• The maximum amount that can be deposited over the life of the account is $50,000, the maximum total amount in the account is limited to $150,000. • Parents or grandparents can contribute to this account as well. • An amount equal to 50% of the annual contribution may be deducted from the contributor’s taxable gross income and any gain within the account would not be subject to state income taxes. • Money from the savings account would have to be used toward the purchase or construction of a first home.

Ask Your Legislator to Support the Missouri First-Time Homebuyer Initiative (HB 563 & SB 444) Today! MissouriFirstHome.com MO_FTHB_MOTimes_10.75"x10.25".indd 1

2/24/17 5:53 PM

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After a failed attempt that drew ire from the education community, the Governor finally got his Christmas wish of removing DESE Commissioner Margie Vandeven, only to leave the search for a new commissioner open going into the beginning of the legislative session with the SBOE asking for public feedback on the future hire on Facebook while in the midst of a handful of lawsuits.

THE DESE SHUFFLE Greitens removes Sumner from SBOE via voicemail at 4:00 p.m. the day before the Nov. 21 meeting November 20, 2017

Gov. Eric Greitens appoints Melissa Gelner, Eddy Justice, and Delbert Scott to the State Board of Education (SBOE) Late July 2017 Scott turns down the post after learning his current post as college president makes him ineligible to serve August 3, 2017

Melissa Gelner removed from SBOE by Greitens September 2017

Joe Driskell resigns from board Greitens appoints Carl Jungmeyer to replace him November 9, 2017

Education officials, lawmakers firing back at Greitens’ attempt to oust State Board of Education commissioner November 13, 2017

Gov. Greitens appoints Rev. Tim Sumners to replace Gelner on the SBOE

“The Missouri State Teachers Association is deeply troubled by the politicization of the State Board of Education. Recent actions by Gov. Eric Greitens and several newly appointed board members highlight the important safeguards the framers of the Missouri Constitution put in place to ensure that public education in Missouri remained focused on what is best for students, not politicians. The attempted ouster of a sitting commissioner without any justification, by newly appointed and unconfirmed board members, is outside of the framework adopted by Missouri citizens in a statewide ratification of our current Constitution.”

LETTER: MSTA troubled by State Board of Education politicization November 15, 2017

October 27, 2017

State Rep. David Wood issued the following statement in response, defending Vandeven and Board President Charlie Shields: “In my time in the legislature, I have served on the House Education Committee, as the vice chair of the House Select Committee on Education, and currently as the chairman of the Joint Committee on Education. In these positions I have found Commissioner Vandeven to be available to the legislature, and she has made sure that the resources of the Department of Elementary and Secondary Education are open to the General Assembly. This atmosphere of cooperation has not always existed and I credit Commissioner Vandeven with this change in policy.”

State lawmakers call on Board of Education to ‘abandon efforts’ to oust Commissioner November 15, 2017

The Missouri Times

Greitens’ attempt to oust Board Of Education Commissioner flounders in tied vote November 21, 2017

Missouri State Board of Education opens search to applicants

State Board of Education sued for violating Sunshine Law during vote to oust Commissioner

DECEMBER 15, 2017

Roger Dorson has been named interim commissioner. He was the deputy commissioner of the Division of Financial and Administrative Services

November 28, 2017

December 1, 2017

Sumners files suit against Governor and Board in effort to reclaim seat

DESE reaches out, seeking input from public in search for next commissioner December 20, 2017

MARGIE VANDEVEN RELEASES OPEN LETTER

November 28, 2017

DECEMBER 1, 2017

Greitens gets his way in second round:

VANDEVEN FIRED December 1, 2017

MUST READ

Lawsuits and Resignations:

What You Need to Know Ahead of The Next Board of Education Meeting November 30, 2017

“If you visit schools across the state as I have, you’ll see teachers enthusiastically challenging the status quo and finding innovative ways to help students learn. In the past few years, we’ve had strong debates as Missouri set rigorous standards for learning, built new tests to measure progress, set stronger requirements for teachers and held one another accountable for results. “I’ve also witnessed our school communities mourn the deaths of students or teachers, watched them rebuild after tornadoes and floods or feed hungry families. Our resiliency inspires me. :While I’m sad to leave a job I wasn’t ready to leave, I know Missouri will stay strong in its commitment to our children.”

READ HER FULL LETTER AT THEMISSOURITIMES.COM

PUBLIC HEARING SCHEDULED “DESE will conduct a public hearing relating to the hiring of a new commissioner of education” January 8, 2018

MEETING SCHEDULED JANUARY 9, 2018

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The Missouri Times

How will federal tax reform affect Missouri? Benjamin Peters

benjamin@themissouritimes.com The U.S. Congress has crossed the I’s and dotted the T’s with their latest version of tax reform legislation, and the signature by President Donald Trump has officially finalized the $1.5 trillion federal tax overhaul package. The sweeping reform is some of the largest cuts in the nation’s history, the largest rewrite of the federal tax code since the Reagan administration. The tax reform package could mean most Americans will see a tax cut starting next year, bringing rate cuts for American companies and doubling the deductions that millions will claim on annual returns. President Trump is calling it an early Christmas present for hard-working Americans. According to the Tax Policy Center, an estimated 80 percent of taxpayers will see a tax cut next year, but Democrats have called the measure a scam, saying it will benefit the wealthy. Under current law, the standard deduction for an individual is $6,300, and $12,600 for a married couple. The proposed tax reform being debated at the national level would roughly double those numbers, up to $12,000 for individuals and $24,000 for married couples. The individual tax cuts carry a sunset clause for 2026. The final bill that was passed out of the bicameral legislature also slashes the corporate tax rate from 35 percent to 21 percent, which will be a permanent addition to the code. “You’ve ended the over-regulation of the American economy,” Sen, Majority Leader Mitch McConnell said. “This is an historic occasion,” said Ray McCarty, president and CEO of Associated Industries of Missouri (AIM). “We look forward to the economic stimulus that will be provided by this significant reduction in tax burden on American businesses and all taxpayers. Some so-called experts are against the bill because the reductions in the individual income tax are temporary. This is a bit disingenuous as it is very unlikely any Members of Congress, including those voting against the bill today, will allow these tax cuts to expire. That would be an act of political suicide. We suspect the root of the opponents’ objections to the bill is there will be less money for the government to spend and more money in the pockets of American workers and job creators. For some, that is a problem. For the rest of us, it is cause for celebration.” But the passage of the reform has also left many wondering about the effects it will have in the Show-Me State, particularly its state budget, as so much of the state’s tax laws are tied into the federal code. Some have expressed much concern over the new changes, calling it a giveaway to special interests that will be paid for with higher taxes on working Missourians and cuts to services.

“This is a one-two punch for working families, kids, seniors, and people with disabilities. Calls to cut nutrition assistance, disability insurance, and health care are a slap in the face to struggling families when Congress just voted for a bill that will increase the deficit by nearly $1.5 trillion,” Amy Blouin, Executive Director of the Missouri Budget Project, said in a statement. “Missourians want little more than to provide a better future for their families. But cuts to the safety net that helps Missourians meet their basic needs will make it harder for families struggling to provide for their children. And because proposals to cut federal spending almost always involve shifting costs to state and local governments, it will put even more pressure on Missouri’s already stretched budget to fund community services that benefit everyone.” Some have speculated that an increase in the standard deduction could mean a potential loss to the tune of up to $1 billion, and state leaders are still trying to figure out what exactly the effects will be, but that is easier said than done, as Department of Revenue Director Joel Walters will tell you. “One of the things we keep talking about is that the ink is still wet. Everybody is still going through line by line and thinking about how this affects different things that can go in different directions,” Walters said. “We still have work to do before we have it completely locked down. In fact, it’s probably fair to say that we’ll have to see how this unfolds over time.” And with such little time to analyze the new reform changes, all 1,100-plus pages, it can be hard to develop any exact numbers. Calculating the new changes and their effect is a complicated task, one that will take some time to see the full picture. But Walters says that a rough preliminary idea is that the federal tax changes could result in a loss – or gain – to an upwards tune of $100 million in Missouri tax revenues. As Walters explained during an interview with the Missouri Times, Missouri is one of 20 states with laws that automatically link the federal tax code to the state tax code. Missouri utilizes rolling conformity, meaning they follow the federal law for both individual and corporate income taxes, and the changes at the federal level are immediately changed at the state level as well. Other states use static conformity, which means they conform to the rules according to a given date. “That’s why the changes at the federal level will have an immediate impact,” Walters said. “This bill is a little different because it is designed on a static basic to lose $1.5 trillion… that’s sort of makes it different from the usual situation, which is why we have the discussion not just about how big of an increase this is, but actually what is it and what direction it will go.” Walters noted that 71 percent of general rev-

enue in the state of Missouri comes from the individual income tax, so anything that changes that calculation could drastically change things. “So people naturally look at that and say it must be a really big impact, and it is,” Walters said, explaining why so many people might be nervous about the effects. “But then you remember that it’s an 1,100 page bill, and there are things that go both directions throughout the bill. And as a result, the impact on the state of Missouri is the net impact of all of those

“So when you look at all of those things, based on what we’ve seen, I think it probably narrows it down to within a relatively narrow band of plus or minus $100 million.” JOEL WALTERS

MISSOURI DOR DIRECTOR

changes. So you start with a big decrease in general revenue from the standard deduction, but then there’s a loss of personal exemptions as well, and businesses are allowed to deduct less of their interest expense, and companies are required to bring back their overseas earnings in a lump sum payment. You start looking at all of that, and they all go the other direction and start increasing taxable income. “So when you look at all of those things, based on what we’ve seen, I think it probably narrows it down to within a relatively narrow band of plus or minus $100 million.” “Overall, I think it’s a good step, but by no means a perfect one. It’s a step in the right direction,” Carl Bearden said. “You get people arguing that the rich are getting a bigger tax cut, but they’re not, they just pay more because their dollar amounts are more.” Bearden is a former Speaker of the Missouri House and budget chair, and pointed out that the revenue in question is not the state’s money, but belongs to the citizens. But he agreed with Walters’ assessment, echoing his analysis. “At the state level, because we’re linked to the federal very closely, a lot of our stuff flows with it. Our state reflects things because we pick it up off of the federal form, which is where peo-

ple are saying we will lose all of this money. But what they’re not looking at is the reductions in deductibles. And once you get all of the mechanics out of it, there’s some that will cost the state money, but others put money back in. And when you balance all of that out, I think you come pretty close.” Both men agree that there’s always more work that could be done, but the benefits over the longterm could be quite great if it lives up to the expectations of the GOP leadership. Walters said that the federal reform could serve as a springboard for more reform, particularly items that were discussed by the Governor’s Committee for Fair, Simple, and Low Taxes earlier in the year, and emphasized that room to grow in addition to these changes could mean more economic success, that the state revenues could potentially see a boost if the tax changes lead to an economic boost as President Trump has stated. “I think there’s actually an opportunity to do more,” he said. “If we still do those things, it’s even more impactful in the state of Missouri. I don’t think it changes the direction, it just makes it more powerful if we get something done in that space.” Walters also noted that the lower federal corporate tax rate could mean some businesses will restructure their classifications, and potentially generate more corporate taxes for Missouri. And as Missouri’s legislators and departments work to find out just what all will be affected, Walters said that his department will be doing their best to inform the citizens of the changes and help them navigate through it all and put resources on the website and embedding instructions in the documents to explain the changes from before. He also noted that the Department of Revenue recently opened back up its Jefferson City Tax Assistance Office, which he says will be able to provide assistance if needed. Walters summed up his assessment of the bill, particularly those who have expressed concern about the sunset clauses. “Would it be better without sunsets? Sure it would. Would it be better if there were some other aspects to this in terms of spreading out benefits in slightly different ways? Sure. But the U.S. was fundamentally uncompetitive. Things had to change, and this changed, so the U.S. will be way more competitive from a business environment perspective, so you could say ‘Wouldn’t it be better if?’ to a lot of things, and the answer would be yes to a lot of questions, but boy, it’s a long way down the road to getting what we needed.” He said that perhaps the best way to wrap it up was to echo one of his former PwC partners, Pam Olson, who quoted The Rolling Stones: “You can’t always get you want, but if you try sometimes, you get what you need.”

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How should Missouri assess state utility regulation? Benjamin Peters

benjamin@themissouritimes.com Are the rankings of state utility commissions by the Regulatory Research Associates (RRA) still a valid assessment of the state’s regulation? That was the question Sen. Ed Emery posed to the Midwest Energy Consumers Group (MECG) in a letter back in late November. Earlier in 2017, the RRA lowered its assessment of Missouri regulation, dropping the state’s credit profile down two notches from an A2 (average) to BA1 (below average). The drop placed the state into the bottom 10 of all 50 states. In a response, David Woodsmall of MECG said that the RRA ranking is just one factor to consider among others. “MECG believes that Missouri regulation is working for both customers and utility shareholders. Clearly, as evidenced by the JD Power rankings, customers are receiving the safe and adequate service that they expect,” he wrote. “On the other hand, Missouri regulation has allowed shareholders to see stock appreciation that has outperformed both the utility sector and the market as a whole. Therefore, while the RRA rankings are a consideration, in this case, they are not indicative of how Missouri regulation is performing.” Read the full letter online.

Missouri Retailers Association calls for compromise with energy legislation MRA seeks three percent rate cap for utilities

Benjamin Peters

benjamin@themissouritimes.com The Missouri Retailers Association has long opposed legislation they felt would make it easier to increase utility rates, but now the organization is saying they will support some energy legislation – with a few conditions. In a letter sent to Missouri’s lawmakers on Friday, Nov. 17, the association says that if Missouri can’t find a way to “better control electricity costs” in the state, many retailers “may call it quits.” The reason for this, the letter states, is that electricity rates in the Show-Me State have risen four times faster than the national average over the course of the past decade. They also say Missouri’s status as a lowcost energy state is at risk, and annual rate increases are hurting Missouri businesses and citizens. “Because the status quo is not keeping energy rates down, the Missouri Retailers Association will commit to working on comprehensive energy legislation during

the 2018 Missouri Legislative session,” Missouri Retailers Association President David Overfelt wrote. But, the letter says, that comes with a catch: before they would support any legislation, must contain certain elements.

A 3% rate cap, for example, would be roughly half of what annual increases have been over the past decade. This will give Missourians the stable and predictable pricing we need. DAVID OVERFELT

MISSOURI RETAILERS ASSOCIATION The major provision that the MRA is asking for is an annual three percent rate cap.

“We support legislation that caps rate increases annually in the range of 3%, with no exceptions to these caps. A 3% rate cap, for example, would be roughly half of what annual increases have been over the past decade. This will give Missourians the stable and predictable pricing we need. If passed, such a cap would represent the most restrictive rate cap in the country. The Retailers Association can only support strong measures to reverse the current trend in electric rate spikes.” The letter also calls for strong regulatory oversight, saying that the PSC must have the same level of oversight as it currently does. “In exchange for this much-needed rate cap, we are willing to help find a common ground on comprehensive legislation that retains or increases current PSC authority and addresses regulatory lag for our state’s regulated electric utilities as well as address interest costs and lost depreciation associated with making energy grid investments,” Overfelt wrote. “Given mandatory rate caps and the economic benefits of significant job creation, my members can commit to finding a compromise on a comprehensive plan.” Read the full letter online at themissouritimes.com.

READ ONLINE | Missouri Grocers Association joins call for utility rate caps

POLICY SPOTLIGHT

RATE CAPS AND GRID MOD

The Missouri Times

Berry files bill to cap electric rates and modernize Missouri’s energy grid icy is hurting customers and the Missouri economy. That’s because, according to benjamin@themissouritimes.com federal data, the state’s electric rates have After calls from several consumer risen faster than every state but four in the groups in the Show-Me State for a utility past decade. rate cap, it seems that the Under the prolegislation to create such posed legislation, titled a policy is primed for deHB 1575, the Missouri bate in the next legislative Public Service Comsession. mission would enforce Rep. T.J. Berry prethe three percent rate filed a bill that would cap cap on regulated utilithe average electric rate ties, and any company increases to three percent that was approved for a annually. rate increase above the “Historically, low-enthreshold would pay a ergy costs have been a penalty and could lose tremendous advantage new regulatory tools. to the Missouri economy The legislation does and workers,” said Berry, not change the PSC’s R-Kearney. “But every year authority to regulate, policymakers fail to act, and the burden of proof rates rise and we lose more BERRY for utilities would reof that economic benefit. PHOTO/TIM BOMMEL - HOUSE COMMS main the same. Forty-six other states have In addition, HB reformed their energy regulations, and are 1575 would allow for grid modernization therefore able to provide better services, to move forward, an issue that has stalled more efficiently. This is the year Missouri in the Senate in recent years. must cap electric rates while encouraging “The Missouri Chamber appreciates efforts to make our energy grid smarter this movement towards compromise in and more secure.” solving Missouri’s energy challenges,” said The Missouri Retailers Association, Dan Mehan, Missouri Chamber of ComMissouri Grocers Association and the merce CEO. “The Chamber recognizes the Missouri Chamber of Commerce and advantage of affordable and reliable enerIndustry have all issued their support for gy in retaining and attracting businesses the proposed rate cap on utility increases, to our state. The Missouri Chamber will stating that the status quo on energy pol- support efforts and work with business leaders, utility providers, and community leaders to drive a collaborative long-term solution to address Missouri’s aging infrastructure while ensuring continued reliable energy at predictable and competitive rates for customers.”

Benjamin Peters

KEHOE | CONTINUED FROM 5

to wade through and work with everyone as best you can. I’d say that working in the car business teaches you a lot about that. It’s not a business where you can draw a line in the sand and stop talking to people; you have to continue to communicate. Even when you don’t sell a family a car this time around, you have to continue working with them because maybe their kids will buy a car, so you have to keep those relations open. My goal is always to try to communicate and keep the ability to talk to me as open as possible. I’m human, but I try to keep an open mind and listen to as many points of view as possible and then figure out the path to get there.” Perhaps the best demonstration of his influence in the Senate was this last session when, after another of the Governor’s attacks on the state senators, Kehoe, following heavy rains across the state, found himself flooded in at his family farm on the Gasconade River, unable to leave due to the water over the roadways. The Senate prepared to continue with business as usual, with Assistant Majority Leader Sen. Bob Onder filling in for Kehoe in his official capacity, but it quickly became apparent that little would get done as senators came forward with a list of bills they would agree to work on, a deviation from the norm, as the majority floor leader sets what will be taken up for action on the floor. After a few days of nothing being accomplished, Kehoe returned, and the Senate’s business resumed. However, Kehoe simply says that he is one single member of the Senate, and chalks it up to having been involved in conversations that others were not privy to. As a legislator, Kehoe has never shied away from working on difficult legislation, instead hoping to find the middle ground that could mutually benefit everyone. While it did not proceed, Kehoe’s proposed ethics legislation served as an attempt to find a fix that was a calculated step toward finding an answer to the ethics conundrum that has been such a difficult matter to navigate. Kehoe sought to address the lobbyist gifts in a manner that allowed for a small price tag to be expended by lobbyists, or what he called “the cup of coffee rule.” He says that his hope is to pass an ethics bill, because he is concerned about correcting the perception of the Capitol. 2018, it seems, will be Kehoe’s final chance to push for legislation on that matter. But the 2017 legislative session came with its own set of challenges: a new governor, new legislators, and adjustments to be made on all sides. But the changes, particularly new members with little or no prior experience, are something that Kehoe says he likes, noting that he himself was once in the same position. “Trying to do things differently is not a bad thing at all,” Kehoe said. “My least favorite answer in the private sector when you ask why they’re doing something a certain way is ‘Well, that’s the way we always did it.’ I hated that answer. And I think Governor Eric Greitens is hating that answer. “But somewhere between here and there,

13 there’s a path to get between those two points,” Kehoe said. You’ve got to try and thread that needle, and sometimes it takes longer.” His advice, which he tries to follow every day, is simply to be patient. “I like Mike, I knew him before,” Gov. Jay Nixon said in his recent retrospective with Faughn. “I mean, my kids were around Jeff City in sports and he was around, he’s one of the guys you know, was a buddy and a friend of mine, so I kinda knew Mike before he ran. Saw him around at a lot of stuff, he was obviously there. I’d always say to Mike, if I couldn’t get him to do some deal and we would get close, I’d say ‘if I gave you a free bed liner, would it work?’ Well, he’d come across there - he’s an auto guy, they’ll make deals with you, but I think that at first, he was in a little hurry and could lose his patience. It’s the only time that Mike has trouble is when he loses patience and as a successful business guy, guys like him, Libla and Wayne Goode on the Democrat side, they would get really frustrated on how long it would take to get some stuff done. But I think that once he realized that the process of government would take a little longer sometimes, he became a heck of a senator.” In a state that proudly carries the name of the “Show-Me State,” Kehoe has also shown himself to be a man of integrity, respected by his colleagues and peers for being fair and easy to work with. “Life’s too short,” Kehoe said. “I’m trying to leave the building the same way I came in. I don’t want to leave the building with a reputation that you just weren’t square with people. I don’t want to be that way. Sometimes, I give people an answer they don’t want to hear, because that’s the way things might be going, but I try not to ever mislead or lie to them.” With one year left, the Senator from Cole is focused on what can still be accomplished, rather than looking to what’s next for his career. But as he begins the journey toward the door, he simply hopes for an effective legislative session that can benefit all Missourians, because he, too, is simply a Missourian. “There are few leaders that I’ve had the pleasure to work with that are as humble, genuine and dedicated to the people they serve as Mike Kehoe,” Lincoln Hough said. “He is truly a statesman in an era that needs and deserves leaders like him.” The Statesman of the Year Award will be presented at the Missouri Times 5th Anniversary Celebration on January 30 at 6:00 p.m. at the Millbottom in Jefferson City. The Missouri Times Magazine Legislator of the Year awards from the Fall 2017 edition will also be presented. For more information, contact Rachael Herndon Dunn.

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THINGS THAT HAPPENED LAST WEEK

1. Missouri Republican Party announces statewide Lincoln Days to be in Kansas City at the Westin February 2-4 2. Missouri Supreme Court rejects challenge to new SB5 3. Moon re-writes Grinch poem, accuses DOR of â&#x20AC;&#x2DC;stealingâ&#x20AC;&#x2122; 4. Governor Eric Greitens announces support for firefighter cancer presumption 5. Parson, Schmitt vote no on LIHTC end Read on these and more online at www.missouritimes.com. Email your news to pressreleases@themissouritimes.com

The Missouri Times

Lobbyist Moves Courtesy of the Gate Way Group

Hassani joins Hahn O'Daniel, looking forward to next role

JEFFERSON CITY, Mo. – The latest addition to the Hahn O’Daniel is definitely noteworthy, with a wealth of experience in offices in the legislative, regulatory and executive branches of Missouri government. Earlier this month, Rachel Hassani left her most recent role as the Director of Legislative Affairs for Attorney General Josh Hawley to join the lobbying firm of Hahn O’Daniel, just a stone’s throw from her last office and the State Capitol. “In a way, these experiences have laid a solid and natural path to joining the government relations team at Hahn O'Daniel. I've watched these guys for years now, and I respect their work,” Hassani said. “In any role, my passion is to serve our state and my desire is to guide good public policy with integrity. I believe that Hahn O'Daniel shares these values and I'm honored to join them. It's an exciting time to join this growing firm.” As an associate, Hassani will provide government relations support to the firm's diverse clientele and assist with managing the business side of the firm. But it’s a role that she has been preparing for with all of her previous roles. Hassani’s career in the political realm

began as she interned for the state senator from her hometown of Springfield, eventually working for then-Senator Scott Rupp. She followed the senator to his new

“In any role, my passion is to serve our state and my desire is to guide good public policy with integrity. I believe that Hahn O'Daniel shares these values and I'm honored to join them. It's an exciting time to join this growing firm.” RACHEL HASSANI HAHN O’DANIEL role in the Missouri Public Service Commission. She says that from the very first day of her internship, she knew that the Capitol is where she wanted to make her career. As an advisor to Commissioner Rupp

at the PSC, she developed a strong background in utility policy and regulatory law. Through a partnership with USAID, she traveled to Ethiopia to train their national energy regulators on transmission and grid modernization. Besides her duties at the Capitol, Hassani is also managing the duties of a new mother, with an infant at home. But on top of that, Hassani and her husband are also involved in foster care. It can be hectic at times, but Hassani says they manage. “Like everyone, we are a busy family, with demanding careers, extra side jobs, plus foster care responsibilities on top of managing a house full of boys right now,” Hassani said. “Shared calendars and a deep love for list making keeps the trains running on time - usually.” With session gearing up, Hassani is anxious to get to work, though like every person working in the Capitol, she knows it comes with a price. "It can be tough that there really aren't firm boundaries between your professional life and your personal life,” she said. “Although sometimes, it's also wonderful. I love seeing the pride in our little boys' eyes when they point out our beautiful Capitol and tell everyone that it's my ‘work’.”

Changes on: 12/27/2017 Deleted JEFF HOWELL Michael D Harrold David Mccracken Added EXPRESS Deleted SCRIPTS HOLDING CO LARRY ROHRBACH Jeremy Lafaver Richard A Mcintosh Added FOSTER CARE Deleted TECHNOLOGIES LARRY ROHRBACH Salvatore Panettiere Joseph F Reagan Added FOSTER CARE Deleted TECHNOLOGIES ST LOUIS REGIONAL Michael D Harrold CHAMBER AND GROWTH Deleted ASSOCIATION RCGA EXPRESS SCRIPTS INC Samuel F Wright Changes on: 12/24/2017 Deleted Bailey Baker UNIVERSITY OF MISSOURI Deleted NICKLAS COLLEGE REPUBLICANS LOBBY Samuel F Wright Changes on: 12/22/2017 Deleted David Willis SAMUEL F WRIGHT Added MISSOURI Changes on: 12/19/2017 ASSOCIATION OF HEALTH Amanda Aiken PLANS Added David Willis ASSOCIATED STUDENTS Added LIBERTAS OF THE UNIVERSITY OF STRATEGIES MISSOURI Jeffrey M Kipping Betsy Ledgerwood Aubuchon Deleted THE GIDDENS Added GROUP JUDICIAL CONFERENCE Mary Scruggs OF MISSOURI Deleted ASSOCIATION Betsy Ledgerwood Aubuchon OF MISSOURI ELECTRIC Added COOPERATIVES SUPREME COURT OF Changes on: 12/21/2017 MISSOURI Jonathan F Dalton Brandon Henderson Added BJC HEALTH Added CARE SYSTEMS ASSOCIATED STUDENTS Kyna Iman OF THE UNIVERSITY OF Added MISSOURI MISSOURI HOSPICE PALLIATIVE Gabriela Martinez Lopez CARE ASSOCIATION Added Jill Williams ASSOCIATED STUDENTS Added Missouri HospiOF THE UNIVERSITY OF tal Association MISSOURI Marc Cataldo Jennifer Mossgraber Deleted Added PURDUE PHARMA ASSOCIATED STUDENTS Kyna Iman OF THE UNIVERSITY OF Deleted PENMAN MISSOURI WINTON Adam Rapert J Scott Marrs Added Deleted LAKELAND ASSOCIATED STUDENTS BEHAVIORAL HEALTH OF THE UNIVERSITY OF Nathan P Wright MISSOURI Deleted Fred Wickham MADSEN WRIGHT INC Added Changes on: 12/20/2017 WICKHAM WOOD LLC Jeffery N Brooks Fred Wickham Added MISSOURI Added AFTMISSOURI SHERIFFS ASSOCIATION Sean Patrick Williams Claude Brown Added Added CITY OF SAINT ASSOCIATED STUDENTS LOUIS OF THE UNIVERSITY OF Zachary Brunnert MISSOURI Added WORLD WIDE Brian Wood TECHNOLOGY Added WICKHAM Zachary Brunnert WOOD LLC Added Brian Wood BMC SOFTWARE Added AFTMISSOURI Kathryn Gamble Jordan Young Added NRDC Added William A Gamble ASSOCIATED STUDENTS Added NRDC OF THE UNIVERSITY OF Cynthia Gamble MISSOURI Added MISSOURI Steve Rudloff SHERIFFS ASSOCIATION Deleted MISSOURI Cynthia Gamble LIMESTONE PRODUCERS Added NRDC ASSOCIATION Kathryn Gamble Changes on: 12/18/2017 Added MISSOURI Charles Andy Arnold SHERIFFS ASSOCIATION Added William A Gamble MISSOURI INDEPENDENT Added MISSOURI BANKERS ASSOCIATION SHERIFFS ASSOCIATION Edens Davis David Michael Jackson Added AMERICAN Added NRDC RESEARCH AND POLICY David Michael Jackson INSTITUTE Added MISSOURI Patrick Ian Dunlap SHERIFFS ASSOCIATION Added Jorgen Schlemeier HEARTLAND CREDIT Added MISSOURI UNION ASSOCIATION SHERIFFS ASSOCIATION Salvatore Panettiere Sarah Topp Added Added MISSOURI SOUTH KANSAS CITY SHERIFFS ASSOCIATION CHAMBER OF COMMERCE Sarah Topp Patrick Ian Dunlap Added NRDC Deleted Zachary Brunnert MISSOURI DEPARTMENT Deleted MISSOURI OF PUBLIC SAFETY HOSPICE PALLIATIVE Changes on: 12/15/2017 CARE ASSOCIATION Shanon M Hawk Francis E Flotron Added BJC HEALTH Deleted CARE SYSTEMS LARRY ROHRBACH Jeremy Lafaver Jeff Howell Added

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