Potential Bond Rating Impact of House Bill 253 Based on Flawed Assumption

Associated Industries of Missouri points out that there continues to confusion on the effects of House Bill 253, including on the part of the state’s bond rating agencies. Standard and Poor’s Rating Services, Moody’s Investor Service and Fitch Ratings all issued letters in July, 2013, suggesting a possible downgrade of Missouri’s AAA credit rating if the veto of House Bill 253 is overturned by the Missouri Legislature. However all three rating agencies based this potential downgrade on the fictional assumption that taxpayers would be entitled to refunds for tax years prior to the effective date of House Bill 253, if certain conditions were met. Specifically, the rating agencies stated they based their statements on assumptions by state officials that, should the federal Marketplace Fairness Act pass and the income tax rate is reduced by one-half percent, taxpayers would be entitled to refunds for three previous tax years. That assumption is legally flawed. In fact, refunds for previous tax years would

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Noranda announces expansion, adding jobs

Associated Industries of Missouri member Noranda announced Friday it is expanding its operations in New Madrid. One of North America’s  leading producers of aluminum, Noranda will invest $45 million into their operations. The company will expand the New Madrid facility by 80,000 square-feet adding 29 jobs and purchasing new state-of-the-art equipment. There are currently more than 1,000 workers employed at the smelting operation. The company is one of the largest employers in southeast Missouri. The expansion will allow Noranda to meet increased product demand by increasing the facility’s capacity to produce redraw rod, which is used in many electrical infrastructure projects. “The aluminum smelter here in New Madrid accounts for approximately 13 percent of total U.S. primary aluminum production,” said Layle (Kip) Smith, Noranda President and Chief Executive Officer. “Missouri’s skilled workforce and competitive business climate have allowed us to compete in the global market and we look forward to our continued growth in aluminum production.”

Kansas City Fed report shows increase in regional manufacturing in July

The Kansas City (MO) Star (7/25) reports manufacturing activity in the Kansas City Federal Reserve Bank’s 10th district increased last month. Chad Wilkerson, a Federal Reserve vice president and economist, said, “Production and shipments rebounded after being disrupted by storms last month. And while some firms remain hesitant to expand, overall capital spending and hiring plans remain positive.” The Wichita (KS) Eagle (7/26) also covers the story.

House Speaker Tim Jones on Governor Nixon: Politically-motivated fear-mongering to prevent tax relief for Missourians

House Speaker Tim Jones and House Budget Chairman Rick Stream this week took Governor Nixon to task for the scare tactics he has used in an attempt to prevent the veto override of the most significant tax reduction package in decades. Jones and Stream said the governor has resorted to hyperbole and a reliance on “worst case scenarios” to frame his argument against the tax cut package (HB 253) passed by the legislature earlier this year. “The governor has consistently painted himself as a proponent of lowering our tax burden and allowing Missourians to keep more of their hard-earned dollars, but when push comes to shove he resorts to political stunts and fear-mongering in an attempt to prevent a well-deserved tax cut for Missourians and Missouri businesses,” said Jones, R-Eureka. “Even more outrageous is the false choice the governor has fabricated that pits the tax cut against funding for education, and that he makes this weak argument while our state

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A Thoughtful Energy Policy Can Keep Vital Manufacturing Jobs in Missouri

By Ray McCarty and Hal Quinn* As President Barack Obama arrives in Missouri for a renewed push on jumpstarting the nation’s economy, he should be reminded of one of the critical links to Missouri’s vibrant manufacturing base and a leading partner in the state’s economic growth: the coal industry. Coal generates about 80 percent of the state’s electricity, which translates into a steady supply of affordable and reliable electricity. No small wonder, then, that Missouri attracts leading manufacturers to the state responsible for more than 247,000 jobs—including machinery, computers and electronics, plastics and rubber, fabricated metal products, appliances and mining, among others. In fact, states with high percentages of electricity generated by coal boast the highest levels of manufacturing thanks to that steady supply of affordable electricity. Unfortunately, thousands of these manufacturing jobs will be at risk if the administration moves forward on new standards to regulate greenhouse gas emissions that effectively ban construction of new coal-fired power plants. Coal’s

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AIM: “Protect Schools AND Lower Taxes”

House Bill 253 would provide a tax cut for every Missouri taxpayer, but only if state revenues grow by at least $100 million per year for 10 years. That’s at least an additional $1 billion in revenue that must be collected. Official estimates of the cost of the tax cuts in HB 253 are around $700 million when fully phased in after these large increases in state revenues. So after it is fully phased in, the bill would mean additional money would be available to put toward education. Earlier this week, Governor Jay Nixon released a worksheet showing how much he believed each school district would lose under HB 253. This worksheet did not correctly account for the net gain in revenues of $300 million that the bill would require. We have calculated the ADDITIONAL revenue for each school district if the legislature takes the net gain of $300 million and applies it to elementary and secondary education in the

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NAM: Several Democrats voted With Republicans to delay ACA employer mandate

The Washington Times (7/19, Howell, Boyer) reports that the House’s votes on the Affordable Care Act’s employer and individual mandates this week “exposed the cracks in Democrats’ unity,” and “provided Republicans a springboard to keep the pressure on both the Senate and President Obama ahead of next year’s elections.” Thirty-five voted to delay the employer mandate. Commentary Weighs In On Employer Mandate Delay. Several opinion pieces Friday weigh in on various aspects of the employer mandate delay. Though some still question the legality of the delay, most today focus on the implications of the votes held in Congress Wednesday. Indeed, two pieces draw upon the number of Democrats who voted with Republicans on the delays to question the level of support for the law. In an editorial titled “ObamaCare’s Eroding Support,” the Wall Street Journal (7/19, Subscription Publication) details the defections from the President’s party, as one of six Democrats voted to delay the employer mandate delay and one of nine to delay the individual mandate. The paper

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McCarty testifies before House committee on downsizing state government

Associated Industries of Missouri president Ray McCarty says the state can become more efficient by limiting state appropriation growth and enacting the tax cuts in House Bill 253. Speaking to the House Interim Committee on Downsizing State Government, McCarty said AIM supports legislation that would place some sort of limit on the amount the state budget could grow from year to year. If revenues come in above the limit, the excess could be returned to the state’s taxpayers, or be placed in state reserve funds, or some combination of the two. “The spending limitation will drive efficiency and result in the state having resources in bad economic times because the state will be storing up revenues during good times,” McCarty told committee members Thursday. “We believe this will help stabilize the budget cycles and help the state wisely invest the taxpayers’ money.” McCarty also told committee members that the override of the governor’s veto of House Bill 253 will also

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