Jefferson City

JEFFERSON CITY, Mo. — Missouri is one of just 13 states that levies a sales tax on grocery food items.

Citing the hefty burden on low-income shoppers and rising cost of food, several other states have moved to reduce the burden of the grocery sales tax. Kansas began phasing it out this year, and Illinois suspended the tax for one year.

But in Missouri, renewed bipartisan efforts to eliminate the sales tax on take-home grocery food this session appear stalled.

A standalone bill to eliminate the state portion of the grocery sales tax, sponsored by Sen. Mary Elizabeth Coleman, R-Arnold, was approved by committee last month but has yet to be placed on the Senate’s debate calendar.

“I’m not as confident that that will have a path forward,” Coleman said in an interview last week with The Independent. She added that typically, bills that haven’t reached the other chamber at this point in the legislative session “have a harder time” ultimately passing, although she is “not pessimistic” because it is a bipartisan issue other states have tackled.

Six bills in the House have been filed to eliminate the grocery sales tax but none has been assigned to a committee.

Proponents successfully added the grocery tax proposal as an amendment to an unrelated bill two weeks ago in the Senate. But last week, after the estimated cost of eliminating the tax was determined, the bill’s sponsor demanded it be removed, effectively derailing both measures.

Coleman said she did not support the removal of the grocery tax provision last week.

“I was really disappointed to see that we were stripping that off,” she said.

By the numbers

The fiscal note for the grocery tax loss estimates that the state would lose over $1.3 billion in local funds and $200 million in state funds each year beginning in fiscal year 2025. Coleman’s standalone bill included only the state tax repeal.

Sen. Lincoln Hough, R-Springfield, raised concerns about the price tag, arguing during the Senate debate that the Legislature’s income tax cuts negotiated last year would provide similar help to low-income families.

“This is going to be an interesting litmus test as to whether or not the majority of the (Senate) still continues to believe that we need to be lessening the tax burden more holistically, or if we’re starting to say maybe enough is enough,” Hough said, adding that “a number of reductions to the individual income tax … will continue to decrease the burden on individuals.”

Coleman, who proposed similar legislation in the House last year, said taxing essential items like food poses an inordinate cost to the lowest-income consumers.

“I don’t think that the taxpayer is wanting us to tax food,” she said. “I really don’t believe that.”

The lowest-income U.S. households spent over 30% of their incomes on food in 2021, according to federal data released last month, while middle-income families spent just 12%.

The price of at-home food nationally soared by around 11% in 2022 compared to 2021.

Take-home grocery food items in Missouri are taxed by the state at a rate of 1.225%, which goes mainly to a fund for public schools. Localities levy additional grocery sales taxes at varying rates that can add up to 8%.

“I would argue that food is a necessity,” Coleman said in February during a Senate committee hearing. “I find taxes that are (on) essential items are some of the most regressive, harming the poor and not the way to fund our state government.”

Coleman’s bill would eliminate the 1% state sales tax, but not the local taxes. She said during Senate debate last week that local governments “were pretty concerned about the impact this might have on their budgets.”

Eliminating the state sales tax, she said, would save a family of four around $87 per year on groceries.

But it isn’t clear what funding sources would backfill the lost revenue to education — a challenge several states face as they attempt to eliminate the tax, according to a Pew Trusts report earlier this year.

“My question is your bill doesn’t address the shortfall. So we’re dependent upon other bills,” said Sen. Doug Beck, D-Affton.

“I would prefer that that would be in one bill, that we could see that both things pass at one time,” Beck added.

Tied to education

Mallory Rusch, executive director of the anti-poverty organization Empower Missouri, who testified in favor of the bill in February, said “we’ve been put in a little bit of a bind” by Missouri because the tax is tied to education.

“We believe that it is really important to fully fund education,” Rusch said, “but we don’t feel like that education funding should come on the backs of those who have the least across the state of Missouri.”

Education entities raised resistance last year to a similar House bill because of concern around funding.

The fiscal note estimated the school district trust fund would lose over $115 million next fiscal year if the state sales tax were removed.

Rusch also said that local sales taxes can be “far more burdensome” than state ones.

Coleman said they could replace the funds with surplus revenue, or through other legislation, such as by passing a proposal to legalize video lottery games.

Senate Minority Leader John Rizzo, D-Independence, during debate last week pointed to the state’s large budget surplus.

“I’m not opposed to tax cuts,” Rizzo said. “If we are going to do that, I’d rather it affect a single mom, I’d rather affect a family that’s trying to make ends meet.”

Originally Appeared Here

Colton Roy remembers starting out in FFA at Trenton, eager to make the most of his time in the agricultural organization. His cousins had been in FFA, and now he was ready to embrace the experience.

“I just took every opportunity I could,” he says.

That mindset led him through an eventful FFA career, working with honeybees as part of his Supervised Agricultural Experience, participating in all those familiar chapter events, winning the State Star in Agribusiness, and then last spring being named the Missouri FFA state president.

A large part of the story of Missouri agriculture is established people helping and developing the next generation of leaders, and Roy experienced that, drawing inspiration from the state officer team when he was a sophomore at Trenton.

“The state officer team played a really big role in my experience in the organization,” he says.

Now, Roy gets to play that role for other FFA members, traveling around the state to meet with them.

“Most of our time consists of meeting with different members,” he says. “… Interacting with the members has been a really big joy.”

Roy and other officers also do media interviews, talking about the organization and opportunities for young people interested in agriculture.

“We’re sharing our story and what we do as an organization,” he says.

He even had a chance to address the Missouri General Assembly at the state capitol in Jefferson City. Roy is currently a student at the University of Missouri, studying at MU’s College of Agriculture, Food and Natural Resources.

Roy says he is grateful for his experience in FFA and the doors agriculture and the organization have opened. He encourages young members just starting out to dive in and make the most of their time in FFA.

“It’s important to take advantage of a lot of different opportunities,” he says.

Roy’s story is just one of the many that make up Missouri agriculture. National Ag Day on March 21 celebrates that industry and all the people in it.

Among those stories is Missouri Director of Agriculture Chris Chinn, a northeast Missouri farmer who has served as director since 2017.

“We are always excited to celebrate Missouri farmers and ranchers,” she says. “Their hard work maintains the state’s position nationally and ensures a bright future for the next generation of Missouri agriculturalists.”

It’s a diverse agricultural state, with flat farmland and bottom ground to rolling, rocky Ozark landscapes. Farming can look very different around the state. It’s a long way from Rock Port to New Madrid.

But the common theme is production. Missouri ranks second nationally in hay production, third in beef cow inventory, fourth in rice production, sixth in turkey inventory, sixth in soybean production, sixth in hog inventory, sixth in cotton production and ninth in corn production.

Missouri is also second nationally in total number of farms, with about 95,000 as of 2022, according to the Missouri Department of Agriculture.

At last year’s Missouri Farm Bureau annual meeting, former USDA chief of staff Ray Starling spoke about the impact of agriculture in Missouri, with its long history of key figures in FFA and agricultural organizations. It’s a state with major agribusinesses headquartered in its big cities, a state where ag research continues at MU, a state where the nation’s corn and soybean commodity organizations are headquartered, along with some major cattle breed associations.

“I’ve seen people from Missouri have an out-sized influence on agriculture,” Starling said during his keynote address. “… I think you really do punch above your weight on the ag scene.”

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Originally Appeared Here

EDITOR’S NOTE: Read more news from the latest Missouri Baptist Convention executive board meeting here: “Yeats asks MBC executive board to begin search for new executive director.”

JEFFERSON CITY – During their meeting here, March 6-7, the Missouri Baptist Convention’s (MBC) executive board recommended 2024 goals for the Cooperative Program and other statewide offerings.

The board set the 2024 CP goal at $15 million, while setting statewide offering goals as follows: $760,000 for the Missouri Missions Offering (MMO); $4 million for the Lottie Moon Christmas Offering; $2.2 million for the Annie Armstrong Easter Offering; and $150,000 for the World Hunger Funds.

The MBC’s 2024 allocation goals are based on a $15 million CP budget. This CP budget sets aside 5.25 percent of the total CP giving for “shared administration costs,” which funds annuity protections, CP promotion and The Pathway. From the remaining CP budget, 34.91 percent is allocated for Missouri Baptist missions and ministries.

Additionally, 21.94 percent of the total CP budget is allocated for Missouri Baptist entities, including the Missouri Baptist Children’s Home, Baptist Homes & Healthcare Ministries, the Missouri Baptist Foundation, Hannibal-LaGrange University, Missouri Baptist University and Southwest Baptist University.

The remaining 37.90 percent is allocated for Southern Baptist Convention missions and ministries. Any CP receipts above the budgetary goal will be split evenly between MBC and SBC ministries.

The MBC’s executive board also amended the 2023 allocation goals, as follows: 5.75 percent for “shared administrative costs” [previously, the goal had been set at 5 percent]; 34.72 percent for MBC missions and ministries [previously, 35 percent]; 21.83 percent for Missouri Baptist entities [previously, 22 percent]; and 37.70 percent for SBC missions and ministries [previously, 38 percent]. The adjustment allows for further CP promotion, leading up to the CP’s 100th anniversary in 2025. Executive board members expressed hope that further CP promotion will ultimately benefit all of the ministries and mission efforts of Missouri Southern Baptists.

Other business

In other business, the MBC executive board:

• recommended the 2024 distribution plan for MMO funds received in 2023;

• approved exhibitors for the 2023 MBC annual meeting;

• recommended the distribution of the MBC’s underspend, including $100,000 for general reserves and the remainder for “blessing checks” to be given in May to all full-time MBC employees;

• authorized the MBC executive director to handle real estate sales, in consultation with the executive board’s properties committee chair and business services committee chair;

• authorized the executive board chairman, the executive director, or a designated representative to manage legal expenditures, in consultation with the MBC board’s business services committee;

• released funds that had been restricted for a BSU construction project in Springfield and placing those funds, instead, in the MBC’s general reserves.

Originally Appeared Here

Betsy AuBuchon wants to shine more light on what she views as “the most mysterious branch” of state government.

AuBuchon is clerk of the Missouri Supreme Court and has made education and outreach a greater focus in recent years.

She and the court have been visiting schools and talking to civic groups. AuBuchon and Justice Mary Russell recently spoke to about 160 high school sophomores from around the state visiting Jefferson City to learn about government.

She’s also working on putting a more interactive judicial learning center in the court’s library.

“We get tens of thousands of kids and adults that come through this building every year to take tours,” AuBuchon said, “so we’re trying to find ways that they can learn better.”

AuBuchon is the sixth Missouri Supreme Court clerk in state history and the first woman to serve in the role. She’s responsible for the internal administration of the state’s highest court, including its security and 110,000-volume library. Her staff handles scheduling of court cases, maintaining case files and distributing court opinions.

Missouri is the only state that has made its Supreme Court clerk also the chief administrator for its statewide judicial system, which puts AuBuchon in touch with 46 circuit courts and municipal courts in 115 counties. She also serves as treasurer and has several duties with The Missouri Bar, the Office of Chief Disciplinary Counsel and the Board of Certified Court Reporter Examiners.

“There’s not much if you’re in the legal field that I’m not touching or being notified of in some capacity,” she said.

AuBuchon is in many ways the “front face” of the Missouri Supreme Court, she said. And one of her goals is to make that face an approachable one.

The Alton, Missouri, native and mother of four began her career in the Capital City about two decades ago but her ties to Mid-Missouri reach deeper.

After graduating from the University of Missouri’s law and medical schools on the same day with a law degree and master’s in health care administration with undergraduate degree in agriculture journalism, she moved to Jefferson City and took up private practice lobbying for about 11 years.

“I had always wanted to be back in Mid-Missouri,” she said. “I just sort of had fond memories of being there when I was really young and just this sort of epiphany of I love the energy here.”

Her first job with the state was acting as a liaison between the court and other branches of government, such as the state legislature and governor’s office. She did that for about five years before the Supreme Court’s previous clerk retired, and she was offered the job.

AuBuchon said she has some mixed feelings wrapped up with the distinction of being the first woman clerk. Part of her questions if it’s a big deal, she said, but the other part is amazed by it and the example it sets for her three daughters, one of which wanted to dress as a “Betsy” for Halloween one year.

“It’s a special skill to be able to tell men what to do sometimes,” she said. “That has been really neat to me, that I can kind of show them: What do you want to do? What do you want to be?”

AuBuchon was in a car accident when she was about 10 years old that left her in the hospital for a month. Insurance companies got involved because of the nature of the accident, and she soon found herself visiting a courtroom for the first time.

The experience left an impression, she said. She later visited the Missouri Capitol with her grandmother for the first time in high school.

“It felt a lot like the halls of the hospital,” she said. “People were always walking back and forth and talking, and there was just this buzz that, for whatever reason, was very similar and spoke to me.”

“It was just people working together, and they were on the move, and they knew lots of people, and they were solving problems, but it was different people from different levels all getting along and working together,” she continued. “The secretaries and chiefs of staff were like the nurses, and the senators and the reps were the doctors, and there were these people coming in and out that had problems that needed to be fixed. It just resonated.”

She wants more Missourians to experience that buzz.

Part of the judicial system’s mystery stems from historical contexts, AuBuchon said. Cameras were once not allowed in courtrooms, and lawmakers have historically taken steps to distinguish judges from other political positions.

By opening things up, AuBuchon said, she hopes to cut through speculation and distrust in government.

One of AuBuchon’s first memories involving the government was when her family’s saw mill had trouble with the Missouri Department of Natural Resources. She said she was introduced to the common refrain that the government was making business difficult and trying to hurt small-business owners.

It cropped back up throughout her lobbying career, she said, but being on the flipside gave her a new perspective.

“We are all just people trying to do the best that we can,” she said. “The people I work with are so fabulous and want to just help. Sometimes is it imperfect? Absolutely. Sometimes can I not provide the answer or the help that I know is wanted? Absolutely. But I do think we have wonderful leaders in this state, and I am a huge fan of state government.”

AuBuchon said that belief is critical, particularly in an era when many people don’t understand government or trust it. If people lose confidence in the Legislature or particular state agencies, it’s a small step toward ignoring the laws and rules they create, she said.

“It’s a construct, but it’s a construct that society has to have,” she said. “Sometimes when we have a lot of rhetoric back and forth, we weaken it for everybody, and we don’t recognize it.

“I guess sometimes I just worry it won’t be on autopilot forever.”

Originally Appeared Here

A lot has changed during the past 100 years, but members of the business community and state officials said the Missouri Chamber of Commerce and Industry’s commitment to improving the state has not.

Brad Thomas, president of the chamber’s board of directors, said the group officially began April 6, 1923, when prominent residents of the state first met in the Capitol as the Missouri Association for A Greater Missouri. Since that day 100 years ago, Thomas said Missouri’s small towns, cities and businesses have grown tremendously, in no small part due to the chamber’s work.

“Other states are thriving and competing with the state of Missouri. And that, my friends, is why those businesses gathered 100 years ago today,” he said. “The voices of Missouri businesses are more important today than 100 years ago. Our voices work hard to protect and empower our employees, to serve our customers and to make a difference in our community. This we know: When Missouri businesses are strong, Missouri’s economy is strong.”

Thomas joined other chamber leaders and state officials Thursday morning in the Capitol’s House Lounge to commemorate the 100-year anniversary of the group. He was joined by President and CEO Dan Mehan, who has helmed the state’s largest business association for a quarter of its existence. While the group was initially founded to promote the state’s resources and foster state and civic pride, it pivoted to a focus on commerce in the 1970s to labor and taxation policies.

Mehan said the chamber was a lifeline to employers throughout the state during the COVID-19 pandemic, and the chamber continued to serve the state through various leadership and grant programs and its 15-year strategic plan.

“We want to establish Missouri as an economic leader,” Mehan said. “Not only in the Midwest and the country, but around the world.”

To do so, Mehan said there were several issues that the business community wanted to see resolved, including a lack of adequate child care that has also been named an employment obstacle in the Capital City.

“We’re trying to put programs in place to try to help the state step up, and have incentives for employers and others to have childcare programs,” he said. “So it’s one of the many tools that we’re trying to apply toward the workforce shortage that is prevalent around the country.”

Mehan also said public safety was a vital piece of the economic growth puzzle.

“If you’re afraid to locate in an area because of the crime, that ends up being in addition to a societal problem or workforce issue,” he said. “So this is very real.”

Mehan received a proclamation on the chamber’s behalf from Gov. Mike Parson, who touted the state’s low unemployment rate and the chamber’s willingness to come to the table on the biggest issues facing the state.

“We have businesses wanting to come to our state, expansions happening continuously in our state, we keep growing and our economy is on the right track,” Parson said. “It’s on the right track because we partner with the chamber, we find out what the issues are, and we try to move forward together.”

Other state officials touted the importance of the statewide organization: House Minority Floor Leader Crystal Quade said her party may not always agree with the chamber’s positions, but could find common ground on many of the state’s nonpartisan needs. St. Louis County Democrat Sen. Brian Williams praised the chamber’s focus on investments in mental health treatment, criminal justice and fighting recidivism rates. Senate President Pro Tem Sen. Caleb Rowden, a Republican from Columbia, said the chamber was a vital asset to the state because of its advocacy on non-partisan issues.

Lt. Gov. Mike Kehoe, who made a name for himself in Mid-Missouri as a car dealer and owned a Ford dealership in Jefferson City, said the chamber was vital to business owners and leaders like him.

“As a small-businessperson both in manufacturing and in retailing, I would have never been able to stand before you today in this capacity if I didn’t have good, solid policies to be able to acquire a business, to be able to build a business, to be able to create jobs,” Kehoe said. “I realize many of the … tools that helped me get to where I was in life, really had started as policies and the conversations and things set forth by Missouri state chamber, so I want to congratulate them on their 100th year.

“I want to thank them for all the Mike Kehoes across the state. You’ve made policies to let them get to live the American dream and let them be able to flourish in this great state. It’s a special time for me to say thanks to the chamber.”

Originally Appeared Here

There’s a bitter fight underway in Jefferson City between the agency that manages the main retirement fund for state employees and an investment manager it accuses of dirty dealing.

The main arena is a Cole County courtroom, where the Missouri State Employees Retirement System accuses Ontario-based Catalyst Capital Group Inc. of mismanaging $175 million entrusted to its care.

A side arena is the General Assembly, where the agency known best as MOSERS must maintain confidence in its management of the state’s pension fund, valued at $8.4 billion when the most recent fiscal year ended June 30.

Although it was filed in late 2020, lawyers are still arguing preliminary matters in the the lawsuit where MOSERS accuses Catalyst of “fraud, deception, willful misconduct, self-dealing and gross mismanagement” resulting in “hundreds of millions of dollars in losses to innocent investors, including MOSERS.”

A trial is months, if not more than a year, away.

But the state budget for the coming year will be settled in four weeks and, from the money set aside for future benefits – $718 million for the coming year – lawmakers give MOSERS an allowance, set in the pending budget at $15.6 million, for administration.

Richard McIntosh, lobbyist for Catalyst and a one-time Senate budget analyst, said his review of MOSERS spending shows it has regularly exceeded that allowance by millions of dollars.

McIntosh was hired in November 2020, about a month after the lawsuit was filed.

“I was really on a mission of peace and the more the spending occurred the more questions it raised in our minds,” McIntosh said. “It started to become rather apparent that there were extraordinary expenditures made on the legal side.”

So far, McIntosh estimates, MOSERS has spent about $5.2 million on legal help in the lawsuit, most of it for nationally known Quinn Emmanuel law firm, which charges in excess of $1,000 an hour for attorney fees.

The legislative language each year sets an amount for “administration of the system, excluding investment expenses.”

MOSERS contends the spending McIntosh targets is either one-time costs to update its computerized benefits system or to administer individual retirement accounts for state and higher education employees under its responsibilities separate from the general pension accounts.

The financial statements verify that costs are allocated properly, MOSERS spokeswoman Candy Smith said.

“We are aware of the narrative that Mr. McIntosh is pushing,” Smith wrote in an email.

The lawsuit

Last Thursday, for more than 90 minutes, Cole County Circuit Judge Jon Beetem heard arguments on the latest legal wrangle in the lawsuit.

Attorney Dave Grable argued that Catalyst had such a close relationship with a firm named Callidus Capital Corporation that it should produce its internal documents. Catalyst’s founder and majority owner, Newton Glassman, was also chairman and CEO of Callidus.

Catalyst purchased shares in Callidus at $14 per share in 2014, partially with funds invested by MOSERS. It also had outstanding loans worth $421 million to Callidus when it faced insolvency in 2019 it was sold for about 56 cents per share to a private investor.

“Defendants did not manage investments honestly, or with anything close to due care,” Grable said in court.

MOSERS has not provided The Independent an accounting of returns on its investments in Catalyst and one has not been filed among the public court documents in the case. One aspect of the case is the heavy censoring of public filings and the large number of documents filed under seal.

MOSERS entrusted a total of $75 million with Catalyst via the two funds that held stock and made loans to Callidus. The combined market value of those funds in the latest MOSERS annual report is $16.9 million.

“There were terrific losses in association with these investments as alleged in the complaint and detailed elsewhere,” Grable said. “It’s MOSERS position that there was a lot of wrongdoing in connection with these Callidus investments.”

If MOSERS’ attorneys want to subpoena records from Callidus they are free to do so, attorney Alex Barrett, representing Catalyst, said Thursday.

“It is not appropriate for us to go and collect these documents for MOSERS,” he said.

A major part of the case is that the apparent early success helped persuade MOSERS to subscribe $100 million to a new fund in 2015. Early on in the lawsuit, MOSERS told Beetem it would refuse to fulfill its contractual obligations to provide cash to fulfill that commitment.

In an April 2021 ruling warning MOSERS that he would not provide a court order protecting that decision, Beetem reminded the pension agency that it faced major sanctions under the partnership agreement if it carried through with the threat.

“MOSERS asks the court to protect it from the consequences of its own decision,” Beetem wrote.

In the decision, Beetem also cast doubt on many of MOSERS claims about the connections between Catalyst and Callidus.

MOSERS backed down, made the $10 investment and has provided Catalyst $70 million of the $100 million subscription. The fund was listed with a fair market value of $71.4 million on the 2022 annual report.

Over the past five years, Catalyst has received $13.6 million in fees for managing Missouri’s investment.

On Thursday, Grable also argued that MOSERS should be allowed to pierce attorney-client privilege for Catalyst because it is a partner in the fund organized as a limited partnership.

MOSERS wants to see the advice Catalyst received before investing in Callidus during the initial public offering.

“The Callidus (initial public offering) there, as we’ve alleged, a lot of different rotten things we say that happened in connection with that, that did violence to the rights of the various limited partners,” Grable said.

Catalyst claims those documents are privileged, Grable said.

“When they sought that advice, they were seeking the advice in order to manage the investments of the limited partners,” he said. “So they’re not allowed to do that.”

Chuck Hatfield, also representing Catalyst, said a ruling favoring MOSERS could cut both ways. The argument from Grable was based on Catalyst’s duty as a fiduciary to show it was being a prudent investor, he said.

Hatfield spent many years working as chief of staff in the Attorney General’s Office, and is entitled to a pension from MOSERS.

“It’s kind of strange to me that MOSERS is making the argument that under Missouri, and I guess Ontario, law, beneficiaries of a fiduciary are entitled to all privileged communications, because I’m a beneficiary of MOSERS,” Hatfield said.

If he asked for privileged information as a beneficiary, he said, he would be refused “and they should.”

Budget fight

The examination of the system’s spending grew out of frustration that MOSERS was blocking access to the bills for legal work in the lawsuit, McIntosh said.

McIntosh’s associate, John Gaskin, filed a lawsuit when MOSERS claimed they were closed records and Gaskin’s motives were suspect as a representative of Catalyst. Circuit Judge Cotton Walker agreed and the case was dropped last year in June.

McIntosh enlisted lawmakers to submit records requests to MOSERS. In each case, MOSERS responded with cost estimates ranging from $122.12 to $196.15. None of the costs have been paid, he said, but Sen. Denny Hoskins, R-Warrensburg, received a packet of records at no cost.

“They fought us tooth and nail on the Sunshine lawsuits,” McIntosh said. “So we said, we’ll give up on that. State agencies must tell the legislature how much they are spending.”

The most significant increase in spending by MOSERS has been on legal services, $5 million over the past two years and budgeted at $3.25 million for the coming year.

That kind of expense, McIntosh said, should require justification that the lawsuit will recover at least that amount.

“The legislature should start to ask some really, really, hard questions,” McIntosh said.

The legal costs are an allowable investment expense, covered by the budgetary exemption, Smith, MOSERS’ spokeswoman, wrote. The system has always counted legal costs related to investments as exempt, she wrote in an email to The Independent.

“MOSERS’ board actively oversees the system’s business, including this litigation and the associated legal expenses,” Smith wrote. “The board believes that the legal fees paid for prosecuting its claims against Catalyst in this complex litigation are incurred in the best interest of its members.”

Hoskins, a member of the Senate Appropriations Committee, said he agreed to submit records requests because McIntosh convinced him MOSERS was blocking access. Former Rep. David Gregory, who lost the GOP primary for auditor last year, submitted requests that were not filled.

“I am just trying to find out exactly what is going on, if they are overspending their budget authority or not,” Hoskins said.

The 11-member Board of Trustees that oversees the system includes four lawmakers, two from the House and two from the Senate, as well as State Treasurer Vivek Malek and Commissioner of Administration Ken Zellers. The governor can appoint two members and people with vested pensions elect the rest.

That is appropriate oversight to keep the budget within the legal limits, Smith wrote.

In fiscal 2022, with complete information available on actual spending by MOSERS from its audited financial statements and proposed 2024 budget, MOSERS actually spent $24.3 million.

The audited financial statement shows just under $7 million for investment-related expenses. Another $2.8 million was spent administering investment accounts for state and higher education employees and $2.1 million for the new computer hardware and software for administering benefits.

For fiscal 2022, the cap was $12.3 million. If MOSERS’ accounting is accepted, it underspent its administrative allowance by $1,822.

McIntosh contends the legal bills should count as administrative expenses, as should costs for buying capital assets. The cost of pursuing the suit should be weighed against the market returns on the same money invested, he said.

By his analysis, MOSERS is overspending its allowance by as much as $6 million.

“You can’t play hide the ball and not tell them what you are spending,” McIntosh said. “What is not OK is not telling the legislature what you are doing.”

Hoskins said he has spoken to McIntosh about the analysis but hasn’t drawn any conclusions. If the budget allowance should be increased to reflect what MOSERS actually spends, he said he is open to that.

“I would have to take a look at what that number is and what their reasoning is for why that number should be increased,” Hoskins said.

He did not like being asked to pay to access records, Hoskins added.

“I disagree with state agencies charging legislators to do our jobs,” Hoskins said. “We ultimately are in charge of protecting taxpayer funds and monitoring revenue and expenditures. I would expect they would make every effort to comply without charging for information.”

Charging lawmakers fees for accessing public records they request has become more common as those information requests are formalized as Sunshine Law inquiries. McIntosh, who was the principal staff member for Democratic House Majority Leader Gracia Backer in the mid-1990s, said there should be bipartisan revulsion at the practice.

“It is a complete constitutional abomination,” McIntosh said. “That is not how government works nor should it be how government works.”

Originally Appeared Here

There’s a bitter fight underway in Jefferson City between the agency that manages the main retirement fund for state employees and an investment manager it accuses of dirty dealing.

The main arena is a Cole County courtroom, where the Missouri State Employees Retirement System accuses Ontario-based Catalyst Capital Group Inc. of mismanaging $175 million entrusted to its care.

A side arena is the General Assembly, where the agency known best as MOSERS must maintain confidence in its management of the state’s pension fund, valued at $8.4 billion when the most recent fiscal year ended June 30. 

Although it was filed in late 2020, lawyers are still arguing preliminary matters in the the lawsuit where MOSERS accuses Catalyst of “fraud, deception, willful misconduct, self-dealing and gross mismanagement” resulting in “hundreds of millions of dollars in losses to innocent investors, including MOSERS.”

A trial is months, if not more than a year, away.

But the state budget for the coming year will be settled in four weeks and, from the money set aside for future benefits – $718 million for the coming year – lawmakers give MOSERS an allowance, set in the pending budget at $15.6 million, for administration.

Richard McIntosh, lobbyist for Catalyst and a one-time Senate budget analyst, said his review of MOSERS spending shows it has regularly exceeded that allowance by millions of dollars. 

McIntosh was hired in November 2020, about a month after the lawsuit was filed.

“I was really on a mission of peace and the more the spending occurred the more questions it raised in our minds,” McIntosh said. “It started to become rather apparent that there were extraordinary expenditures made on the legal side.”

So far, McIntosh estimates, MOSERS has spent about $5.2 million on legal help in the lawsuit, most of it for nationally known Quinn Emmanuel law firm, which charges in excess of $1,000 an hour for attorney fees.

The legislative language each year sets an amount for “administration of the system, excluding investment expenses.”  

MOSERS contends the spending McIntosh targets is either one-time costs to update its computerized benefits system or to administer individual retirement accounts for state and higher education employees under its responsibilities separate from the general pension accounts.

The financial statements verify that costs are allocated properly, MOSERS spokeswoman Candy Smith said.

“We are aware of the narrative that Mr. McIntosh is pushing,” Smith wrote in an email.

 

The lawsuit

 

Last Thursday, for more than 90 minutes, Cole County Circuit Judge Jon Beetem heard arguments on the latest legal wrangle in the lawsuit.

Attorney Dave Grable argued that Catalyst had such a close relationship with a firm named Callidus Capital Corporation that it should produce its internal documents. Catalyst’s founder and majority owner, Newton Glassman, was also chairman and CEO of Callidus.

Catalyst purchased shares in Callidus at $14 per share in 2014, partially with funds invested by MOSERS. It also had outstanding loans worth $421 million to Callidus when it faced insolvency in 2019 it was sold for about 56 cents per share to a private investor.

“Defendants did not manage investments honestly, or with anything close to due care,” Grable said in court.

MOSERS has not provided The Independent an accounting of returns on its investments in Catalyst and one has not been filed among the public court documents in the case. One aspect of the case is the heavy censoring of public filings and the large number of documents filed under seal.

MOSERS entrusted a total of $75 million with Catalyst via the two funds that held stock and made loans to Callidus. The combined market value of those funds in the latest MOSERS annual report is $16.9 million.

“There were terrific losses in association with these investments as alleged in the complaint and detailed elsewhere,” Grable said. “It’s MOSERS position that there was a lot of wrongdoing in connection with these Callidus investments.”

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If MOSERS’ attorneys want to subpoena records from Callidus they are free to do so, attorney Alex Barrett, representing Catalyst, said Thursday.

“It is not appropriate for us to go and collect these documents for MOSERS,” he said.

A major part of the case is that the apparent early success helped persuade MOSERS to subscribe $100 million to a new fund in 2015. Early on in the lawsuit, MOSERS told Beetem it would refuse to fulfill its contractual obligations to provide cash to fulfill that commitment.

In an April 2021 ruling warning MOSERS that he would not provide a court order protecting that decision, Beetem reminded the pension agency that it faced major sanctions under the partnership agreement if it carried through with the threat.

“MOSERS asks the court to protect it from the consequences of its own decision,” Beetem wrote.

In the decision, Beetem also cast doubt on many of MOSERS claims about the connections between Catalyst and Callidus.

MOSERS backed down, made the $10 investment and has provided Catalyst $70 million of the $100 million subscription. The fund was listed with a fair market value of $71.4 million on the 2022 annual report.

Over the past five years, Catalyst has received $13.6 million in fees for managing Missouri’s investment.

On Thursday, Grable also argued that MOSERS should be allowed to pierce attorney-client privilege for Catalyst because it is a partner in the fund organized as a limited partnership. 

MOSERS wants to see the advice Catalyst received before investing in Callidus during the initial public offering. 

“The Callidus (initial public offering) there, as we’ve alleged, a lot of different rotten things we say that happened in connection with that, that did violence to the rights of the various limited partners,” Grable said.

Catalyst claims those documents are privileged, Grable said.

“When they sought that advice, they were seeking the advice in order to manage the investments of the limited partners,” he said. “So they’re not allowed to do that.”

Chuck Hatfield, also representing Catalyst, said a ruling favoring MOSERS could cut both ways. The argument from Grable was based on Catalyst’s duty as a fiduciary to show it was being a prudent investor, he said.

Hatfield spent many years working as chief of staff in the Attorney General’s Office, and is entitled to a pension from MOSERS.

“It’s kind of strange to me that MOSERS is making the argument that under Missouri, and I guess Ontario, law, beneficiaries of a fiduciary are entitled to all privileged communications, because I’m a beneficiary of MOSERS,” Hatfield said.

If he asked for privileged information as a beneficiary, he said, he would be refused “and they should.”

 

Budget fight

 

The examination of the system’s spending grew out of frustration that MOSERS was blocking access to the bills for legal work in the lawsuit, McIntosh said. 

McIntosh’s associate, John Gaskin, filed a lawsuit when MOSERS claimed they were closed records and Gaskin’s motives were suspect as a representative of Catalyst. Circuit Judge Cotton Walker agreed and the case was dropped last year in June.

McIntosh enlisted lawmakers to submit records requests to MOSERS. In each case, MOSERS responded with cost estimates ranging from $122.12 to $196.15. None of the costs have been paid, he said, but Sen. Denny Hoskins, R-Warrensburg, received a packet of records at no cost.

“They fought us tooth and nail on the Sunshine lawsuits,” McIntosh said. “So we said, we’ll give up on that. State agencies must tell the legislature how much they are spending.”

The most significant increase in spending by MOSERS has been on legal services, $5 million over the past two years and budgeted at $3.25 million for the coming year. 

That kind of expense, McIntosh said, should require justification that the lawsuit will recover at least that amount.

“The legislature should start to ask some really, really, hard questions,” McIntosh said.

The legal costs are an allowable investment expense, covered by the budgetary exemption, Smith, MOSERS’ spokeswoman, wrote. The system has always counted legal costs related to investments as exempt, she wrote in an email to The Independent.

“MOSERS’ board actively oversees the system’s business, including this litigation and the associated legal expenses,” Smith wrote. “The board believes that the legal fees paid for prosecuting its claims against Catalyst in this complex litigation are incurred in the best interest of its members.”

Hoskins, a member of the Senate Appropriations Committee, said he agreed to submit records requests because McIntosh convinced him MOSERS was blocking access. Former Rep. David Gregory, who lost the GOP primary for auditor last year, submitted requests that were not filled.

“I am just trying to find out exactly what is going on, if they are overspending their budget authority or not,” Hoskins said.

The 11-member Board of Trustees that oversees the system includes four lawmakers, two from the House and two from the Senate, as well as State Treasurer Vivek Malek and Commissioner of Administration Ken Zellers. The governor can appoint two members and people with vested pensions elect the rest.

That is appropriate oversight to keep the budget within the legal limits, Smith wrote.

In fiscal 2022, with complete information available on actual spending by MOSERS from its audited financial statements and proposed 2024 budget, MOSERS actually spent $24.3 million.

The audited financial statement shows just under $7 million for investment-related expenses. Another $2.8 million was spent administering investment accounts for state and higher education employees and $2.1 million for the new computer hardware and software for administering benefits.

For fiscal 2022, the cap was $12.3 million. If MOSERS’ accounting is accepted, it underspent its administrative allowance by $1,822. 

McIntosh contends the legal bills should count as administrative expenses, as should costs for buying capital assets. The cost of pursuing the suit should be weighed against the market returns on the same money invested, he said.

By his analysis, MOSERS is overspending its allowance by as much as $6 million.

“You can’t play hide the ball and not tell them what you are spending,” McIntosh said. “What is not OK is not telling the legislature what you are doing.”

Hoskins said he has spoken to McIntosh about the analysis but hasn’t drawn any conclusions. If the budget allowance should be increased to reflect what MOSERS actually spends, he said he is open to that.

“I would have to take a look at what that number is and what their reasoning is for why that number should be increased,” Hoskins said.

He did not like being asked to pay to access records, Hoskins added.

“I disagree with state agencies charging legislators to do our jobs,” Hoskins said. “We ultimately are in charge of protecting taxpayer funds and monitoring revenue and expenditures. I would expect they would make every effort to comply without charging for information.”

Charging lawmakers fees for accessing public records they request has become more common as those information requests are formalized as Sunshine Law inquiries. McIntosh, who was the principal staff member for Democratic House Majority Leader Gracia Backer in the mid-1990s, said there should be bipartisan revulsion at the practice.

“It is a complete constitutional abomination,” McIntosh said. “That is not how government works nor should it be how government works.”

Originally Appeared Here

Emily Manley and Kayla Shepperd

2 days ago

JEFFERSON CITY, Mo. — While the Missouri Chamber of Commerce is celebrating a big milestone, they also want stakeholders to know crime and the lack of childcare is affecting Missouri’s economy. 

According to the chamber, more than 30% of parents in Missouri have left a job or passed on an opportunity in the past year because of childcare. At the same time, Missouri has the fourth highest rate of gun deaths in the country. Missouri Chamber of Commerce President and CEO Dan Mehan said it’s hurting the state’s business industry. 

“If we can address that problem, that challenge, we will be much better than other states,” Mehan said during the Chamber’s 100th anniversary celebration. “We had a company in downtown St. Louis, across the street from Busch Stadium, say, ‘we’re taking fire on the fourth floor.’ Let that sink in, ‘we’re taking fire on the fourth floor.’”

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The Show-Me State is a top 10 state for a host of undesirable crime measures. Missouri also ranks sixth in violent crime per capita and ninth-highest in property crimes per person. It’s a top concern for businesses in Missouri, but it’s not only crime affecting the state’s economy. 

“Childcare isn’t just an issue for parents, it’s an issue for businesses as well,” Sen. Brian Williams, D-University City, said. 

Mehan said during Thursday’s event, businesses across the state are having a hard time finding workers. 

“There’s a lot of people out there that have to sacrifice work to make sure they are taking care of their kids,” Mehan said. “We’re trying to put programs in place and to have the state step up and have incentives for employers and others to have childcare programs.”

During his annual State of the State address in January, Gov. Mike Parson asked for nearly $80 million in childcare incentives. According to the chamber, the state’s economy lost out on more than $1.3 billion last year due to a lack of childcare. 

“The Chamber of Commerce are the heart and soul of small communities, large communities and they really are the ones that are the driving force behind the state of Missouri,” Parson said during the chamber’s celebration. 

In a study done last year by the chamber, the greatest need for a parent is to find someone to watch their child when he or she is a toddler or infant, but because it’s so hard to find, parents are leaving their jobs.

Senate Leadership said this type of investment is important for all Missourians. 

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“Childcare, workforce development, infrastructure, these aren’t things that have Rs [Republicans] and Ds [Democrats] behind their name, they are just things that matter to a vast majority of the people of Missouri,” Senate President Caleb Rowden, R-Columbia, said. 

The House already passed tax credits for childcare this session. That bill is now waiting to be debated in the Senate. This past week the upper chamber tried approving it’s own version of incentives for childcare providers and employers, but after some disagreements on the floor, the bill was laid over, ending debate. 

Here are some of the legislative priorities for the chamber this session: 

• Deploy evidence-based and hot spot approaches to crime reduction
• increase and protect tools to support policing
• Address substance misuse and mental health 
• Reduce recidivism among those on probation or parole 
• Improve training and employment opportunities for incarcerated individuals 
• Increase public safety staffing
• Increase prosecutorial consistency and transparency 

The Missouri Chamber of Commerce says it also supports the provision of allowing a special prosecutor to come in and help cities and counties who have a backlog of cases, like in St. Louis, where the Circuit Attorney’s Office says there are roughly 3,500 that cases that have not yet been prosecuted. 

Originally Appeared Here

By the Editorial Board

Once again, Missouri legislators are demonstrating their odd and disturbing allegiance to puppy mills. The state already is notorious nationally as ground zero for this shady industry. Now, in keeping with the recent trend among Republicans of refusing to let local governments make their own decisions, pending legislation would prevent St. Louis and other cities from clamping down on pet stores that enable the industry. This bill deserves to the relegated to the lining of the cages where these puppies are kept.

Puppy mills — defined as large commercial operations in which dogs are bred for sale in overcrowded and often unhealthy conditions — have been a Missouri scourge for many years. The state has topped the Human Society’s list of the “Horrible Hundred” worst puppy mills in the U.S. for each of 10 years since the organization began putting out the annual report.

Abuses in that industry were glaring enough that Missouri voters in 2010 passed a ballot initiative imposing restrictions and standards of care. The state Legislature, as it tends to do, promptly reversed the will of the voters at the behest of the dog-breeding industry. Then, in 2014, lawmakers won passage of a constitutional “right-to-farm” amendment that was actually a thinly disguised shill to puppy mills.

In addition to denying women the right to biological autonomy and making sure criminals and the mentally ill aren’t thwarted from getting their hands on guns, Missouri’s ruling Republicans are more than happy to roll over for the puppy-mill industry.

So it is that the House last week approved a bill that would prevent local municipalities throughout Missouri from banning or restricting pet shops. There’s no such local statute in St. Louis or anywhere else in the state right now, but blue states like Illinois and liberal communities elsewhere have done just that. The Missouri bill is a preemptive strike, clearly designed to ensure that industry giants like Petland, the Ohio-based pet store chain with lobbyists in Jefferson City, aren’t limited in their business practices by pesky local elected officials attempting to carry out the wishes of their local constituents.

Missouri Republicans have a long history of serving the interests of puppy mills and their adjacent industries. Eviscerating local control over local issues is a new thing with today’s GOP, not just here but around the country. Like once-vaunted Republican principles of family values, law and order and fiscal responsibility, local control still gets some GOP lip service now and then, but it’s clearly no longer what the party stands for.

The bill now moves to the Senate, where Republican leaders have occasionally shown more restraint and adherence to their own principles than do their House GOP counterparts. This would be a good time to display those qualities and bury this cynical bill nice and deep.

Up for Discussion

Views from the editorial board, opinions from guest and national columnists plus the latest letters from our readers.

Originally Appeared Here

The Jefferson City School District Board of Education welcomed a new member and renewed its participation in a stipend program for teachers at its April meeting Thursday.

During the open forum portion of the meeting, Shelley Thompson, president of the Jefferson City National Education Association, told the board that JCNEA fully supports the Career Ladder program. She also expressed support for some of the recruitment and retention-focused legislation making its way through the Missouri Legislature, including additional scholarship opportunities for those who commit to teach in hard-to-staff areas.

The district also voted to enter into a contract for a pilot program with EverDriven, which will provide passenger vehicles to transport early childhood special education students during summer school, allowing other buses to be diverted for different routes.

The board welcomed new member Suzanne Luther, along with previous members Brad Bates and Scott Hovis, who were elected on April 4 in the general municipal election.

Superintendent Bryan McGraw honored outgoing board member Lori Massman, who has served on the board since 2017, but elected not to run this year.

Massman pledged to continue supporting children in the community.

The board selected Lindsey Rowden as board president, Erika Leonard as vice president, Brad Bates as treasurer and Stephanie Sappenfield as secretary. Anne Bloemke-Warren was selected as board delegate and Suzanne Luther as alternate delegate.

During the reports portion of the meeting, Deputy Superintendent Heather Beaulieu shared a number of ongoing and upcoming efforts to increase teacher recruitment and retention. They include:

The Career Ladder program

Two preschool classrooms for staff children, with a third planned for the fall

Minimal increases in insurance costs

Salary increases

Personnel support such as behavioral interventionists and instructional coaches

College credit reimbursement

A revamped mentor program

Job fair participation

Exploration of an in-district master’s program

Chief of Operations Dawn Berhorst said in her report that all interior finishes should be done in Capital City High School’s stadium within two weeks. The stadium is expected to be an option for a graduation venue.

The board voted to renew the Career Ladder program, which provides stipends for teachers who complete a certain number of hours of work outside of contract time, such as sponsoring a club. Around 500 teachers participated this year, and so far, the applications for the next school year are at about the same number as this year. Next year, Beaulieu said the district will require that 25 of the total hours required be direct student interaction hours.

The board also amended the budget to reflect increased revenue from local taxes and higher interest income. It also saw increased expenditures in substitute services because of increased hours and pay, and higher food costs.

Originally Appeared Here