Thoughts on Missouri Employer’s Mutual – More Study Needed

On Monday, the House Committee on Gov’t Oversight and Accountability met to look into Missouri Employer’s Mutual’s continued status as a tax-free entity. In brief, MEM is a public corporation created by Missouri statute in the early 1990s and charged with serving the small group worker’s compensation insurance market. A majority of MEM’s board is ‘approved’ by the Governor.

MEM claims it was a catalyst to bring rates down in the small group work comp market – and there’s at least some evidence to support that claim. Others, the Property & Casualty Insurers, claim that other factors have led to reduction in rates. MEM and some independent agents worry that making MEM private would eliminate its mission and lead to higher rates for small employers. Others claim plenty of companies would fill the void.

Why am writing like an economist? (On the one hand, x; on the other hand, y.) Because, after our committee hearing its clear that we do not have enough information to proceed with any major changes to MEM’s governance structure. I think its important to legislate with modesty and responsibility. There are topics more complicated than can be fixed after a two-hour hearing with just six weeks left in a legislative session. This is one of those topics. Though I remain interested in further study, I don’t believe it would be responsible to move forward with drastic changes at this point.

Standardized Test Accountability Bill Has No Opposition

I was pleased Monday to learn that there’s no opposition to HB 1986, my effort to bring greater accountability to standardized testing in Missouri. This bill would require DESE to purchase relatively inexpensive software that flags anomalous test results. The Department and local school districts could then use that information to detect potential situations where teachers have helped students cheat on standardized tests.

To be clear, I do not believe cheating to be widespread. But, as reported by the Post-Dispatch, it has happened in at least a few places.

Given the relatively low cost of software to detect problems, I think it’s an easy decision to require DESE to make investments to ensure the reliability of our statewide assessment tests. The Committee will exec on the bill soon. But, given that its late in session, the bill’s best chance will be as an amendment to another bill. We’ll be looking for a good landing spot.

Hayek v. Keynes – “Fear the Boom and Bust” Rap

Plan for Monday’s Hearing in Gov’t Oversight and Accountability

On Monday, the House Committee on Gov’t Oversight and Accountability will hear 5 bills. The first three deal with Missouri Employer’s Mutual and are described here.

The fourth bill is HB 1846, a bi-partisan reform bill sponsored by Reps. Thomas Long and Rory Ellinger which will require the Department of Health and Senior Services to either make in-home assessments of Mo HealthNet patients within 15 days of request or accept the recommendation of the provider.

The last bill we will hear is HB 1986, a bill I sponsored to ensure that the Department of Elementary and Secondary Education purchases the resources necessary to detect and deter teacher cheating on standardized tests as revealed in the St. Louis Post-Dispatch. As detailed by the Post, despite multiple instances of cheating on state-wide standardized tests, DESE failed to spend just $45k on the software necessary to flag anomalous test results. In addition to requiring DESE to make this small investment, the bill would require local school districts to adopt written policies for response to allegations of cheating.

The committee will not exec on any of these bills Monday, but may hold a hearing later next week to exec on any of the bills.

Erasing Anti-Catholic Bigotry from the Missouri Constitution

Today in the House Education Committee, we heard Rep. Shane Schoeller’s HJR 70, which would amend the Blaine Amendment to remove the provisions placed into the Missouri Constitution in a fervor of anti-Catholic bigotry in the late 18th century.

The cartoon below was published in Harper’s Weekly in 1875 – and shows the spirit of the times.

The Anti-Catholic Blaine Amendment

Supreme Court Echoes Obama’s Arguments Against Hillary

Via the UK’s DailyMail, the Supreme Court justices questioning the individual mandate are making arguments very similar to those President Obama made as a candidate to distinguish his own health care plans from those of Hillary Clinton. In this clip, then candidate Obama argues on Ellen DeGeneres show that if the government can force you to buy health care, it can also force you to buy a house – an absurd notion. Of course, the President later changed his mind – but it’s highly ironic that his own words are the same as those being used to argue that the law is unconstitutional. 

Scheduling Snafu w/ MEM

Due to my mistake, we’re cancelling Monday’s hearing on MEM and will very likely re-schedule for the following Monday.

Plan for Monday’s Hearing on Missouri Employer’s Mutual

On Monday, the House Committee on Gov’t Oversight and Accountability will hold a hearing Monday to look into Missouri Employer’s Mutual. An audit by Missouri State Auditor Tom Schweich and follow-up news accounts charged that MEM is ‘having its cake and eating it too’ – enjoying the perks and comforts of private industry but still gleaning the tax benefits of a quasi-governmental entity. Some say the company has an unfair advantage due to a tax-status based on nominal – if any – public oversight. The company claims state laws requiring it to offer low-margin worker’s compensation policies to small business customers more than offsets the benefits it receives from non-profit tax treatment. In addition, MEM acquired a for-profit subsidiary last year to engage in business outside the state of Missouri. While MEM claims this acquisition was legal and authorized by Missouri statutes, others disagree.

The committee will look into legal status of MEM as a whole and its recent acquisition.

As I see it, policymakers have three general options. (1) Do nothing. (2) Make MEM more public and more accountable. Or (3) Set a course of action for MEM to go private and forego its tax benefits.

The committee will officially hear three bills at the same time: HB 1940, filed by myself, which sets a course for privatization; HB 1941, filed by myself, which makes MEM a more public entity; and HB 1955, sponsored by Rep. Todd Richardson,  which is simply a placeholder bill to be filled in later based on findings of the committee.

Missouri House Approves State Employee Pay Raises

I’m pleased to report the Missouri House has approved a full two-percent pay increase for all state employees making less than $70k per year and a one-percent increase for those making above $70k.

This delivers on a promise Governor Nixon made last fall but didn’t deliver on when he offered the budget. When the Governor faltered, the House stepped up to make things right with a full pay raise for those state employees who need it most. 

Our state ranks 50 out of 50 in state employee pay in nearly every ranking available. It’s been three years since state employees received a raise. Since that raise, state employee pensions and health care have been cut and thousands have been let go – meaning that not only have they not only have state employees not received a raise, but they’ve actually had a decrease in take home pay and been asked to take on more work. 

Today’s actions don’t get us as far as we need to go. (I’d like to see us move closer to our state’s ranking on national cost-of-living scales.) But it’s a step in the right direction.

Once again, I thank Rep. Ryan Silvey for understanding the problem, putting up with my persistent requests to make the Governor’s promise whole, and ultimate action to do the right thing. 

Obama Heeds the Advice of the Mo House

On Tuesday, the Missouri House passed HCR 37, a resolution I sponsored calling on Congress and the President to encourage further utilization of North American energy sources – including completing the Keystone XL pipeline.

On Wednesday, President Obama announced he was expediting the process of approving Keystone XL’s southern leg.

Connection? Why not?