Veto Session Primer: Business Groups Eyeing More Than Tax-Cut Bill

Gov. Jay Nixon | Photo from of
Jay Nixon | Photo from of

Democratic Gov. Jay Nixon vetoed 29 bills this legislative session, the most in his five years in office, and the Republican-controlled legislature will have the chance to override those vetoes starting at noon on Wednesday.

Typically, these sessions have lasted only one or two days, but that may not be the case this time. House Speaker Tim Jones, R-Eureka, told Missouri Watchdog that all 29 bills could be brought up on the House floor.

Tim Jones | Photo courtesy of Tim Jones
Tim Jones | Photo courtesy of Tim Jones

To override a veto, 109 representatives and 23 senators must vote for the bill, the two-thirds majority required by the state Constitution. The Republican Party’s so-called veto-proof majority in the General Assembly (109 GOP members in the House, 25 in the Senate) is no guarantee of success. Not voting has the same effect as voting against an override and only a few members of the Republican majority would need to defect to ruin the chances of a party-line override.

The most intense attention this summer has focused on one bill – the income tax cut for individuals and businesses. Statewide business groups, including the Missouri Chamber of Commerce, National Federation of Independent Businesses in Missouri and the Associated Industries of Missouri, have focused their efforts on gathering enough support to override Nixon’s veto of the bill.

But there are other vetoed bills drawing attention from these groups. Here are some of them:

Income tax cut (HB 253)

Basics: This bill, which would cut income taxes, has the backing of most statewide business organizations. Proponents say it will draw more businesses to Missouri and allow small businesses to create more jobs. The bill would provide a 50 percent deduction on business income reported on an individual’s income tax filing. It would also cut the top income tax rate from 6 percent to 5.5 percent and slash the corporate income tax rate from 6.25 down to 3.25 percent over the next 10 years.

Veto reasons: Nixon estimated the bill would reduce state revenue by $800 million and jeopardize essential services. In his veto letter, Nixon wrote that he opposed the sales tax increases on prescription drugs and textbooks contained in the legislation. He also wrote the range of $340 to $540 million in a fiscal note written by legislative staff understated the hit to state revenues. “This legislation is an ill-conceived, fiscally irresponsible experiment that would hurt our economy and jeopardize funding for education and other vital public services,” Nixon wrote.

Override potential: Overriding this veto is the top priority for Republican leadership in the House and Senate and for business groups.

Brad Jones, Missouri state director of the National Federation of Independent Businesses, said the income-tax cut override was the sole focus of the NFIB. Jones said it was fair to say that several representatives seemed to have sided against an override.

At least six Republicans have publicly stated they will not support an override.

“There’s a small – and getting smaller, by the way – number of representatives that are listening to their superintendents more than their small businesses,” Jones said. “I am optimistic … I think by next Wednesday those who have reservations will really look at the bill and see that the sky is not falling.”

The bill passed the House in May with 103 votes. Three Democratic representatives voted for the tax cut and three Republicans voted against it. Eight members did not vote. In the Senate, it passed 24-9 with one Democratic senator not voting.

In short, if one GOP senator changes his or her vote, the measure will fail.

If all six Republican representatives who have said they aren’t going to vote for an override follow through, then even if the three Democrats who supported it don’t switch and the other absent Republicans vote along party lines – a lot of ifs – the vote would be only 106 in favor of an override. That’s three short of the necessary constitutional two-thirds majority.

Ray McCarty, president of Associated Industries of Missouri, said some legislators have gone back and forth on the issue and that it’s impossible to know how the vote will go.

“We won’t really know until the vote’s taken,” McCarty said. “That’s why we think it’s important to have a vote.”  

Limits on civil lawsuits against lead mining operation (HB 650)

Basics: This bill would limit punitive damages against a former lead mine located in St. Francois County to $2.5 million per lawsuit. The current owner, Doe Run Company, has assumed liability for the mining operation. It employs about 1,600 employees in Missouri and has said it may have to shut down if it has to pay large punitive damage awards.

Punitive damages are intended to stop companies from repeating an action, but some percentage goes to claimants. McCarty said the only people who oppose the bill are trial attorneys representing people in personal injury suits.

“They get a percentage of that money, and that’s why we think the governor vetoed the bill but I wouldn’t want to speculate on that but it could be a reason,” McCarty said.

Veto reasons: Nixon said in his veto letter that the law singled out one company and would result in unequal awards to plaintiffs harmed by the same entity, since some lawsuits have already been filed and settled.

Override potential: Despite the lower vote count in the House (it passed 91-66), McCarty said he thinks the Doe Run bill has a better chance of being overridden than the income tax cut. He said legislators in Jefferson County, where Doe Run is a major employer, will likely support the override regardless of their party. The bill passed the Senate 22-10, with two Republican senators absent.

“This has bipartisan support,” McCarty said.

The Missouri Chamber of Commerce wrote in a press release that not overriding the bill risks hundreds of jobs.

Limiting unemployment benefits (HB 611)

Basics: Changes the definition of “misconduct” in the law to include actions outside of the workplace and for more specific behaviors such as chronic absenteeism or violation of a no-call, no-show policy. This would limit who could receive unemployment benefits. It would also change penalties for fraudulently obtained benefits.

This bill is another priority for the Missouri Chamber, because the bill brings the state’s unemployment system into compliance with federal guidelines that, if not followed, may jeopardize funding and tax credits from the federal government. Although the Missouri Dept. of Labor and Industrial Relations has used administrative rules to follow the new guidelines, according to the Missouri Chamber, those may not stand up in court.

“The Missouri Chamber does not believe this is a prudent approach,” Missouri Chamber president Dan Mehan said in a news release. “It’s an end-run around the legislature and we question the legality. If one person sues, it will put our entire unemployment insurance system at risk.”

Final vote: House, 140-18; Senate, 21-7

Payday loan fees (HB 329)

Basics: Would allow payday loan companies to raise fees on loans to consumers. Includes other provisions regulating financial institutions.

Final vote: House, 143-17; Senate, 34-0

Misconduct by employees (SB 28) 

Basics: Similar to HB 611. Expands the definition of misconduct for which a fired employee would then be ineligible for unemployment benefits.

Final vote: House, 98-57; Senate, 32-2

Worker’s compensation database (SB 34)

Basics: Requires the creation of a database with worker’s compensation records searchable by name and Social Security Number for employers prior to hiring an individual.

Final vote: House, 91-67; Senate, 31-0

Foreign farm ownership (SB 9)

Basics: Among several other agricultural provisions, prohibits foreign businesses from owning agricultural land if the total owned by foreign businesses exceeds 1 percent.

Final vote: House, 133-21; Senate, 32-1

Uninsured motorists (HB 339)

Basics: Prohibits non-economic damage awards against a driver with auto insurance in a lawsuit by an uninsured motorist for damages from a traffic accident. Both the Missouri Chamber and AIM said this was a priority.

Final vote: House, 104-55; Senate, 32-1

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