Assessing, anticipating pro-business legislation

It’s dangerous for a reporter to admit he or she is not all-knowing and not a world champion at perception. But let’s summon up the courage to step out onto the high wire of ignorance and explore a subject likely to be a little tender to some folks but is likely to be a noisy part of the 2011 legislative session. .

It seems to us the Missouri legislature has been distinctly pro-business in recent years, particularly when Republicans controlled both houses and the governorship.

It’s too easy to question why Missouri’s unemployment rate has been above nine percent for two years despite all that legislation. In fact it’s unfair to try to link the two circumstances although simplistic critics might be quick to do so. All of the states have been hit hard by the recession regardless of the variety of pro-growth legislation they’ve passed.

But now comes a study by the Kauffman Foundation and the Information Technology & Innovation Foundation and it does cause an eyebrow to rise a little bit. David Nicklaus’ column in the Post-Dispatch Sunday focuses on the study from the St. Louis perspective. Diane Stafford has taken the Missouri/Kansas perspective in the Kansas City Star on Tuesday.

The New Economy Index (PDF) resulting from the Kauffman/Information Technology study tries to measure the competitiveness of Missouri and other states in what is called the “new economy.” It uses something called “innovation-based vitality.”

Missouri is 33rd among the 50 states overall. We’ve been in the lower half of the index for more than a decade. Nicklaus is more alarmed by another ranking–economic indicators that are based in part on the fast-growing companies and the rate of business startups. In that category, Missouri is last. 50th.

Stafford says Missouri has benefitted from the immigration of knowledge workers and the presence of health information technology industry. But she says Missouri tumbles because of “lack of entrepreneurial activity and a high level of job churning.” We are last, therefore, in “economic dynamism.”

It’s been a long time since we took Econ 51 in college and we have long ago lost the understand how economic theory can be translated into economic reality. That’s why we’re a little baffled by the idea that Missouri is 50th in indicators that point to this state as a good place for businesses to start and grow. Isn’t that what the legislature is supposed to have been creating in recent years?

Maybe these things just take time to kick in and we’ll see Missouri rise in “economic dynamism” when they do.

The hot issue to be discussed in the 2011 legislature that supporters almost guarantee will make Missouri’s economy grow (although they’re not signing any pledges and they’re not saying it is the magic bullet) is Right to Work.

The Kauffman study looks at the ability of states to create economies that are “knowledge-based, globalized, entrepreneurial, IT-driven and innovation-based.’

Right to Work will be a big partisan fight next year between pro-business Republicans and traditionally union-backed Democrats. But will it be a fight between ideologies or a thoughtful debate about creating a “new economy” that encourages “entrepreneurial activity?”

We’ll wait to hear in 2011 if the debate focuses on lifting Missouri above 50th, or even 33rd.

Or have we been down so long that it will only LOOK LIKE up?

Tick, tick, tick, tick…

A second full week of the special legislative session is non-history. Thoughts a week ago that some kind of compromise could be reached by now that would clear the way for movement on the two pieces of legislation have proven decidedly optimistic. And so a special legislative session that some are calling “bizarre” will ooze into a third week.

At this point the House and the Senate don’t even know when they’ll come back into session. The House staff was supposed to meet yesterday to talk about scheduling. But the meeting was cancelled. The staff can’t even meet to talk about when to have a meeting. Therefore we are offering today a non-progress report.

We don’t know what kind of negotiations are going on because–IF they are going on–they’re being done by telephone or text message or emails, not in any formal committee negotiating sessions.

The ultimate goal is to pass the Automotive Manufacturing Jobs Act that most people refer to in verbal shorthand as “The Ford Bill.” Before the Ford Bill can come up for Senate debate the House and the Senate have to agree on the changes in the state employees’ pension system. The big hang-up is Senator Jason Crowell’s insistence that a new investment board be set up that can oversee the Missouri State Employees Retirement System, known as MOSERS in acronym-speak, and the Missouri Department of Transportation and Highway Patrol Employees’ Retirement System, the MDTHPERS–which is so impossible to pronounce that it has been given the MPERS acronym. The House members, on the other hand, argue there’s no need for a new super board because the present system was set up just a few years ago and has not had a chance to perform because of the recession. They want to see how well MDTHPERS/MPERS does when the economy gets better

There is some thought that House and Senate negotiators have wasted a critical week by carrying on discussions long-distance instead of putting negotiators together in a room face to face and letting them pound on each other until a compromise is found. Unfortunately the process has stalled before it reached the point of conference committees being appointed. Part of the feeling by some Capitol observers that the special session is in full dither mode is borne from that lack of physical presence at the Capitol.

In our talk with Governor Nixon late yesterday afternoon, he indicated that he does not think Crowell’s superboard is essential to the reform of the pension system. He wants an agreement on pension reforms so lawmakers can return to Jefferson City early next week and finish work on the two bills. The big pension issue as far as he’s concerned is the 4% employee contribution to state pensions by future state workers.

Crowell is a hard man to budge once he plants his feet in an idea. The Governor and the House members working on pension reform apparently agree Crowell’s superboard isn’t needed. But this is a time to recall former Senator John Scott who often quoted Andrew Jackson during Senate debate: “One man with courage makes a majority.” Or maybe Thomas Jefferson said it. It’s been attributed to both. Regardless, Crowell is capable of being that one-man majority.

Nixon is not ready to decouple the Ford bill from the pension bill although he clearly preferred to talk about the urgency of the Ford bill more than the importance of the pension bill when we talked with him. He says Ford is in the process of deciding where it will build its next generation of cars and he hopes the legislature does not continue to seemingly wallow in indecision any longer.

He didn’t say “wallow in indecision.” That’s our phrase. But it seems to capture the moment.

Nixon says the state will save enough money by making future workers contribute to their pensions, thus lessening the state’s contribution. The savings will offset the lost income the state incurs with the income withholding taxes it lets Ford keep. The Senate leans in that direction. But House members suggest the Ford bill can be financed through the Quality Jobs program instead of through pension savings.

The point guy in the House on the pension bill, Rep. Jim Viebrock, says House members believe 80% of the bill is workable—but the super board is not digestible. He says the House is in a “holding pattern” waiting to see what the Senate does on the jobs bill. The Senate, again, is waiting to see what the House does on the pension bill before it takes steps to get a jobs bill past Senator Chuck Purgason who is refusing to let his Fiscal Oversight Committee vote on it because he objects to giving tax breaks to a profitable international corporation that are not available to thousands of small businesses.

All kinds of appropriate descriptions seem to fit in this circumstance—trying to herd casts; trying to move a wheelbarrow full of toads; trying to get chickens to stand in formation. Let’s try this picture: .

Did you ever see a vehicle get high-centered on a dusty road—-get stuck on the high middle of a dirt road? That’s what we have. Two vehicles are high-centered on a dusty road, the end of which can’t be seen.

One way to get off the high center is to lighten the load, thus increasing ground clearance and allowing movement.

Something’s gotta go.

More than 10,000 people at Claycomo and at parts plants that supply the Claycomo factory hope the thing that does NOT go is Ford.

But Ford’s clock is ticking.

A little optimism

We talked to the President of the Auto Workers union at the Claycomo Ford plant yesterday afternoon and then got the Manager of Corporate Communications for Ford on the line yesterday evening. UAW local president Jeff Wright was on an arranged teleconference for reporters who listened to him and two other people who are part of a huge lobbying effort to get the legislature to approve tax incentives for Ford if it opens a new production line at Claycomo, replacing the Escape SUV which is moving to Kentucky for the 2012 model year.

Ford has been publicly silent about its plans for Claycomo after the Escape escapes. A couple of the reporters on the teleconference wanting to get some meat from the teleconference did get Wright to admit that Ford had “indicated” to the UAW that it would produce one of its next generation lines at Claycomo. He wouldn’t go much beyond that, saying the discussions had been behind closed doors and it was not the union’s place to reveal what was said.

Ford’s John Stoll would not—probably more appropriately, could not—spill the beans either. But there is space between the lines in what he said. Yes, Ford does have several next generation vehicles headed for production. The company has ample time to decide what it’s going to do with the new lines and where it will produce them. The Claycomo plant will be available and there is time for Ford to make plans and re-tool. Yes, Ford has talked to the union and has talked to state leaders. No, the content of the meetings won’t be public. No, Ford is not just holding out to get more money from the state but it does work with its local governments and incentives are welcome.

The key answer came when we noted that Claycomo, being a productive plant with a proven workforce, would weigh in favor of being a place for a next-generation Ford product. He said Ford has shown a commitment to existing facilities and has no plans for a new assembly plant. He called Claycomo “right in the heart” of the company’s current manufacturing plan.

So put yourself in the seat of one of our state legislators. Is that enough to convince you to seal the deal with a tax incentive plan?

Still unresolved is whether enough lawmakers will favor changing the way future state workers accumulate pension benefits. Passage of the pension bill is considered the key to approval of the Ford tax incentive proposal. Although the multiple-lobbyist group does not care house the Ford tax incentives are financed, a lot of lawmakers say financing of it is the deal-maker or deal-breaker.

AUDIO: Our conversation with John Stoll (10 min)