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Nick Thompson's Blog in 2012
Tax Credits

Posted 11/16/2012:  I recently attended a meeting in Columbia of the Tax Credit Review Commission. Shockingly, there were few people there to listen to the group discussion and offer input. Discussing the sunset of a four percent Low-Income Housing Tax Credit does not exactly sound like the most interesting topic to entertain on a Friday afternoon.

By most accounts, it was not an interesting subject to discuss, admittedly. However, tax credits may be one of the most interesting issues in the upcoming legislative session and arguably the most important issue. Each meeting I have attended that features education policymakers or bureaucrats has asked for a curb to tax credits. Almost every Missouri official I have spoken to as an MDN reporter wants to address the issue.

Nonetheless, the General Assembly was deadlocked on the issue in the 2011 session, the 2011 special session, and this past year's legislative session. Missouri has 61 tax credit programs, and they have swelled to a record total and proportion of general revenue.

The Tax Credit Review Commission was re-convened in September to once again suggest solutions to curb the credits. They reviewed the programs in 2010 and found that 28 should end, and significant changes were suggested to others.

The options to fix programs include: placing caps on authorizations, adding sunsets, changing the carry-forward periods, or ending programs altogether.

It's a mixed menu of options, that despite many proposals, have not been acted on.

Missouri business and civic leaders are looking long and hard: find which credits create significant impact, which ones do not, and how can the state change them to work better for Missourians.




Medicaid Expansion
Posted 11/30/2012: 

The issue of Medicaid expansion got a lot more interesting here in Missouri this week, with Gov. Jay Nixon voicing support (finally, some Democrats might say), and the Missouri Chamber of Commerce endorsing an expansion as well.

The issue seems to be picking up momentum, from an impossible thought a few months ago to a distinct possibility. Medicaid expansion in Missouri would cover all adults up to 133 percent of the poverty level. It depends on who you ask, but the Missouri Hospital Association said as many as 300,000 could enroll. A University of Missouri study found the expansion would create thousands of jobs in health related fields in the state.

The job creation prospects got the Missouri Chamber of Commerce interested, and now they endorse it.  This is the same organization that endorsed Dave Spence a few months ago.

Some Republicans contend that it is still not happening. After Nixon supported the expansion this week, Lt. Gov. Peter Kinder told an MDN reporter that he was glad Nixon has asserted a position and said "bring it."

Groups like the Missouri Hospital Association have tried to "bring it," with facts and figures to motivate the General Assembly to consider the expansion.

Alas, Republicans look like they will be in the drivers seat on this issue, and it may take much more for them to swerve in the direction of an expansion in welfare.

One key player in this issue will be Senator Rob Schaaf, R-St. Joseph. He is the only physician in the chamber. If Schaaf indicates at any moment that he favors an expansion, you would expect heads to turn.

This is sure to be one of the most exciting issues in the upcoming legislative session. Will Republican majorities be persuaded that the state is turning away federal money and jobs? Or does this just cost Missouri way too much?

Stay tuned.

 


Democratic make-up could change in Senate
Posted 10/19/2012:  When Republican lawmakers return to the Missouri Senate for the 2013 session, they may see a few more folks on the other side of the aisle than they did  in the last legislative session. To say the Republicans had a majority in the last session would be an understatement. The GOP held a supermajority with 26 seats in the last session, leaving the Democrats with just eight. 

However, when doing the pre-election math, we find that eight Democrats are already accounted for in the 2013 session. These lawmakers are either incumbents like Jolie Justus, who is rumored to be the next Minority Floor Leader, or they are running in races unopposed, like current Rep. Jason Holsman is in the seventh district. Currently, 18 seats belong to the GOP and eight belong to the Democrats. The Democrats already have the same amount they had in the last session. In the eight Senate contests in the Nov. 6 general election, any seat gained by the Dems is a seat they did not have in 2012. 

The eight races include a St. Louis slugfest in District 1 between Scott Sifton and Jim Lembke that is expected to be close, as well as a folksy race in a bootheel district between Rep. Terry Swinger and Republican businessman Doug Libla. 

Needless to say, when a party gets a few seats back, as Democrats may in this election, they will have more of a say and input into policy directives. If the Democrats were to gain four seats, for example, they would have twelve, and would have the necessary votes to block an override of a governor's veto. If Jay Nixon returns to the governor's office, a few more allies in the Senate certainly would not hurt the governor if he decides to take more specific policy positions in a second term.

More Democratic voices could change the discourse and the game when the legislature takes on capital improvements, Medicaid, the education funding formula, or tax credits in the next session.

The eight races, especially Siftons' bout with Lembke, bear watching on election night as the composition of the Missouri Senate may be altered noticeably.






Capital Improvements Will be a Theme
Posted 10/12/2012:  This past week, I produced a story about a bonding bill. Sen. Kurt Schaefer and Rep. Chris Kelly, both members of the joint committee on capital improvements, are working on a nearly $1 billion bonding bill that would make improvements to the state's college campuses, mental health facilities, and the state capitol building. If the bill were to pass early this spring, Kelly said he would like it to appear before the state's voters on the April ballot. 

The concept of a bond issue is nothing new to Kelly. He said this is the fifth consecutive legislative session he will push a bonding bill. Schaefer and Kelly co-sponsored a bond issue two years ago. However, Kelly said conversations he has had with fellow lawmakers show support for the issue this time. After all, it may be time to put the AAA credit rating championed in campaign ads to use. Kelly said the state re-financed some bonds recently at 0.7 percent. Schaefer and Kelly said it is time to use the current low interest rates, low cost of construction, to make improvements the state would make anyway.

If Schaefer and Kelly have their way in the session, their endeavor could make state history. The bond issue would be named the Fifth State Building Bond. The state has not issued this much in bonds since it issued $600 million worth in 1982 as part of the Third State Building Bond. Missouri's voters approved that issue to make improvements to state parks and roads.

Schaefer must win his re-election bid against Rep. Mary Still, but if he is back in Jefferson City this spring, he said capital improvements will be a huge theme in this legislative session.




Private Equity: It's Everywhere
Posted 10/05/2012: 

GOP presidential hopeful Mitt Romney has brought private equity firms, like his former employer Bain Capital, to the forefront.

Private equity firms had previously fancied wonks and financiers, but more Americans are finding they do business with private equity firms regularly. Private equity may be your landlord. It may manage your pension. It may be providing jobs in your community. Thanks to Romney in part, these big financiers are now known to most as the guys who "turn around companies," making investments with large sums of money for long periods of time.

Here in Missouri private equity is a substantial economic player. Companies owned by private equity firms employ more than 175,000 Missourians according to the Private Equity Growth Capital Council  based in Washington. From 2002-2011, private equity firms invested over $16 billion in Missouri. Missouri has 25 private equity firms.

Although private equity has become big business in and of itself, and has helped many businesses become bigger, it may be the next part of the financial sector that needs a watchdog with a keen eye. Pensions, university endowments, charitable foundations and other sources of big and important money, both private and public, are now associated in various capacities with private equity firms.  

For example, pension fund managers have grown wary with the returns they have received recently in their relationship with private equity.

Just like banks became "too big to fail," those who cover business must make sure that private equity, even in all its size and scope, gives communities a fair shake.

 

 

 

 

 


Campaign Season At Its Climax
Posted 09/30/2012:  I had the opportunity last week to attend the Society of American Business Editors and Writers conference in New York City. One of the most interesting things there ended up being someone who was not there. It was Glenn Hubbard, one of Mitt Romney's economic advisers.

Hubbard may have been a little too busy helping Romney outline the specifics of his economic agenda to come speak with tons of reporters. The pressure was applied long ago for Romney to be more specific with the American people about his economic policies. Those specifics and more will be seen, read, heard, tweeted, clicked, etc. all over the nation's media in the next month as the race has reached its crux. Americans have questions about policy and expect answers. In the next month, journalists have the important, constitutionally protected task of ensuring the voter has been led to find those answers. 

Just like with Romneynomics, Missouri needs more specific policy discourse. Todd Akin has passed the last day to drop, ahem- legitimizing his push to the end of the campaign. Most of the headlines in this race are dominated by Akin comments, political contributions, or the loss in McCaskill's popularity. However, Missourians deserve to know more about what the winner of this race will do in Washington. The race is close and the stakes are high, as the seat is a crucial one for both the Democrats and the GOP nationally. 

At the state level, Missouri sits at a plate full of issues: Medicaid expansion, education funding, transportation funding, tax credits and the criminal code amongst others. Over the next month, I'll be looking for more answers from Missouri office seekers and the ideas they will bring to the next legislative session in Jefferson City.

Several ballot issues will also merit discussion over the next month. Once again, Missouri voters will decide whether or not to raise the nation's lowest cigarette tax.

Political season is heating up, and serious discussion about policy should at last be paramount a month before voters take to the polls.








Race to the Top
Posted 09/23/2012:  As I reported in a story this past week, fifteen Missouri school districts are applying for federal Race to the Top funds from the U.S. Department of Education.

The competition is fierce, as 900 schools nationwide are competing for between 15 and 25 grants. However, the grants will amount to anywhere from $5-$40 million depending on the population that the school districts serve.

To size up the impact this could have if a Missouri school district won, Poplar Bluff will serve as an example. The district has an operating budget of $43 million. A $15 million Race to the Top grant would add 35 percent of the district's current budget to its coffers. Winning one of these grants could impact a Missouri school district's financials significantly.

Any winners this year would be the first Missouri recipients of the grants, as Missouri has yet to receive funds from Race to the Top. When state level competitions began in 2010, Missouri finished 30th in Phase I and later finished 33rd in Phase II.

This fall's competition for $400 million in federal funds is a district level competition unlike the state level competitions of the past. Fifteen Missouri districts are putting together applications before the October 30th deadline, and they will find out if they win before year's end. 

The superintendents I spoke with at districts in Joplin, Poplar Bluff, and at the Fort Osage district in Independence were excited to speak about the grants. The U.S. department says winners will display a commitment to personalized learning environments. In Joplin, superintendent C.J. Huff said the district is helping students identify their strengths early before high school, and before they transition to career or college. In Fort Osage, assistant superintendent Maria Fleming said the district would use the funds for more technology and professional development.


What's The Story and Who Cares?
Posted 08/31/2012:  I began reporting in Jefferson City this week and I could not be more thrilled. This is an opportunity within the journalism school that I have had my mind set on for awhile. I think this experience will enrich my competency as a journalist immensely and get me to think and work better under deadline pressure. 

For my first story I glanced at a law that went into effect this week that creates a core course list that will be transferable at all of Missouri's public higher education institutions. The coordinating board for higher education has until July 1, 2014 to implement the law. The main story I found here is that Missouri colleges are being forced to work together to create this list to streamline the transfer process for Missouri college students, and that affects a lot of people. However, I missed this story when I drafted the first version of my piece. 

The law has several different provisions, one of which requires institutions to find "best practices in remediation." In my first draft of my story, I focused on this provision for over half of the story. When an editor looked over it, they asked simply: "What is that?"

If the editor in the newsroom is asking that then most of the general public is going to ask the same thing when they read the story.  I was promptly reminded this week that finding exactly what the story is and why anyone should care is the first thing you have to think about as a reporter. In my first week I got caught up in bureaucratic language and confusing, unclear aspects of policy. I realized that while this law may have several provisions, there is one that truly affects many Missouri students. If they receive credit that is part of this core course list, they can transfer it anywhere in the state. That, not "the coordinating board for higher education has surveyed nationwide research in remediation to identify best practices" is the story. 

After familiarizing myself with the workflow of the newsroom, and learning once again that the journalist is working to inform the public, I hope to come back and keep learning next week.


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