As I write this on Friday morning, I am also watching coverage of last night's NCAA basketball games. I enjoyed watching the Dayton Flyers earn a spot in the Elite Eight. March Madness is an exciting time of year, and it is even more fun when one of your teams is making a great run. I am looking forward to Saturday's game as my daughter's school takes on the University of Florida.
The common perception that session really begins after Spring Break was further reinforced this week as the Senate considered and gave initial approval to several significant pieces of legislation. Additionally, on Thursday, the House passed its version of the state's FY2015 operating budget, and sent it to the Senate. We will begin discussions on the House version next week. The one thing that the Missouri Constitution requires the Legislature to do is pass a balanced budget for the upcoming fiscal year, and passing the budget out of the House is a critical step in that process. As a member of the Senate Appropriations Committee, under the leadership of Sen. Kurt Schaefer, I will be spending a lot of time in the coming weeks crafting and refining a budget that is both fiscally responsible and matches the priorities of Missourians.
This week the Senate took initial action on two bills that address issues you bring to me frequently: taxes and government imposed costs to small businesses. There can be no doubt that Missourians spend their money better than the government ever can. Government can surely spend it, but never in a way that is as beneficial as if individuals, families, and businesses spend their own money. Accordingly, it is right that the Legislature return more of your money to you when we can do so responsibly.
That is why I was very pleased to vote for SB509. SB509 has a delayed effective date that allows Missouri to increase school funding and refine current tax credit programs. Beginning in 2017, a tax cut will be phased in reducing income taxes by one-half of a percent. Each of these reductions have revenue growth triggers that must be met before they take effect. In total, when fully implemented, the tax burden on Missourians will be reduced by about $450 million annually ... this is $450 million more that individuals and families will have to spend and that small businesses will be able to use to hire more employees, pay their current employees more, and otherwise reinvest back into their business.
I have heard the governor's comments about this tax cut bill, and I disagree fundamentally. It is never wrong to give more of your money back to you. Doing so does not mean that the state cannot function, it means we must make it function better and more efficiently.
In addition to reducing taxes, on Wednesday the Senate gave initial approval to my SB673. SB673 makes changes to Missouri's unemployment insurance program by marrying the length of time an individual is eligible for unemployment benefits to the state's unemployment rate. When Missouri's unemployment rate is high, benefits are available for a longer period of time, up to the state maximum of 20 weeks. As the unemployment rate goes down, the length of time to receive unemployment compensation will also be reduced which follows a common-sense line of thought that when there are more jobs to be found, benefits are not needed as long.
The version of SB673 passed Wednesday also requires the Board of Unemployment Financing Fund (which includes the governor, the attorney general and the lieutenant governor) to meet and consider bonding the balance of unemployment insurance debt if the debt reaches $300 million.
When the economy nose-dived in 2008, Missouri borrowed from the federal government to cover the influx of unemployment claims. As a result of this borrowing, employers across Missouri are paying a penalty on every employee. This penalty has increased by $21 per year for the last three years. This year, employers are paying an additional $63 per employee to retire the debt owed to the federal government. The state borrowed the money in 2008, and small businesses are paying it back with penalties today. This is thousands of dollars, in many cases tens-of-thousands of dollars, that small business could be using to hire more employees, give current employees a raise, buy additional equipment or expand their current operations. Instead, this money is being used to pay-back a debt that the state has allowed to accumulate.
In turn, all of us are paying for this because a business's costs ultimately end up in the price of the product and services they sell. The only entity that this situation isn't pinching is the state of Missouri. We have simply allowed employers to pick up the tab for costly borrowing. This reckless policy has to stop and I am glad that we have begun to take actions to prevent this situation from repeating itself in the future.
My purpose and my intent is to serve the constituents of the 6th Senatorial District. If you are in the Capitol during the coming weeks and months, please stop by your office in Room 220.
State Sen. Mike Kehoe, R-Jefferson City, represents the 6th District.