Capitol Report, Nov. 1, 2018

Missouri Unemployment Rate Continues to Drop

In September, Missouri saw its unemployment rate drop to its lowest point in more than 18 years. The state’s seasonally adjusted unemployment rate now stands at 3.2 percent, which is the lowest the state has seen since January 2000 when the rate was 3.1 percent. The September 2018 unemployment rate is also 0.4 percent lower than it was in September 2017.

September saw Missouri employment grow by 2,200 jobs in durable goods manufacturing; 1,300 in construction; 1,200 in transportation, warehousing, and utilities; and 1,200 in accommodation and food services. In total, the state has seen the job figure grow by 39,300 since September of last year. More than 11,000 of these jobs are in the professional and business services, and nearly 10,000 are in health care and social assistance.

Compared to the national unemployment rate, the state’s 3.2percent unemployment is half a percentage lower. The state’s unemployment rate has now been lower than the national rate for 41 consecutive months.

Statewide Ballot Measures

If you are a consistent reader of this Capitol Report, you know that I have spent the last several weeks providing great detail on each ballot measure for 2018. As Election Day is almost here, I will provide one more brief recap of all of these statewide ballot measures appearing on Tuesday’s ballot.

Amendment 1 – This is the amendment often referred to as “Clean Missouri.” If you think it is about the environment, you are mistaken. If you think it is about ethics reform, you are only partially correct. It will drastically change how the districts for the General Assembly are drawn, and this will eventually have an impact on how Congressional districts are drawn. The provisions of the amendment are as follows:

· Changes the process and criteria for redrawing state legislative districts during reapportionment allowing the state auditor to appoint a state demographer, at state expense, to help design state legislative districts;

· change limits on campaign contributions that candidates for state legislature can accept from individuals or entities;

· establish a limit on gifts that state legislators, and their employees, can accept from paid lobbyists;

· prohibit state legislators, and their employees, from serving as paid lobbyists for a period of time;

· prohibit political fundraising by candidates for or members of the state legislature on State property ; and

· require all legislative office records and other proceedings to be open to the public
State governmental entities estimate annual operating costs may increase by $189,000.Local governmental entities expect no fiscal impact. A “yes” vote will amend the Missouri Constitution, a “no” vote will not.

Amendment 2 - Missouri Amendment 2 is a marijuana legality change to the constitution. The Medical Marijuana and Veteran Healthcare Services Initiative, as it is titled, is on the ballot in Missouri as an initiated constitutional amendment. Currently, Missouri has not legalized the use or possession or medical marijuana. Amendment 2 would legalize marijuana for medical purposes. The ballot initiative would allow state-licensed physicians to recommend marijuana use to patients with nine qualifying conditions and additional conditions with doctor's approval. Patients would be allowed to grow six flowering plants in their homes or purchase processed marijuana.

Amendment 2 would also tax the sale of medical marijuana at 4 percent and allocate revenue from the tax toward providing healthcare services, job training, housing assistance, and other services for veterans. Amendment 2 would task the Missouri Department of Health and Senior Services with overseeing and regulating the state's medical marijuana program. The ballot initiative would authorize not less than 24 dispensaries in each of the state's eight congressional districts, based on 2018 boundaries.

A “yes” vote supports this constitutional amendment to:

· legalize marijuana for medical purposes;

· tax marijuana sales at 4 percent; and

· spend tax revenue on health care services for veterans.

A “no” vote opposes this constitutional amendment.

Amendment 3 - Missouri Amendment 3, the Medical Marijuana and Biomedical Research and Drug Development Institute Initiative, is on the ballot in Missouri as an initiated constitutional amendment. Amendment 3 would legalize marijuana for medical purposes. The ballot initiative would tax marijuana sales at 15 percent. Revenue from the sales tax would be used to establish and fund a Biomedical Research and Drug Development Institute, which would be tasked with researching cures for cancer and other diseases and overseeing the state’s medical marijuana program. Amendment 3 would also enact cultivation taxes on marijuana flowers ($9.25 per ounce) and on marijuana leaves ($2.75 per ounce).

The ballot initiative would allow state-licensed physicians to recommend marijuana use to patients with 10 qualifying conditions. The research institute would be empowered to add additional conditions to the list of qualifying conditions. Patients would be allowed to purchase not less than 3 ounces of dried marijuana or equivalent in 30-day period (more permitted with written certification from two independent physicians). The ballot initiative would authorize not less than two dispensaries per 20,000 residents in counties and cities.

A “yes” vote supports this constitutional amendment to:

· legalize marijuana for medical purposes;

· tax marijuana sales at 15 percent; and

· spend tax revenue on a Biomedical Research and Drug Development Institute.

A “no” vote opposes this constitutional amendment.

Amendment 4 – Currently, a charitable organization’s bingo game managers be members of that organization for at least two years. Also charitable organizations are prohibited from advertising bingo games, except on their own premises. This amendment will:

· remove language limiting bingo game advertising that a court ruled unenforceable; and

· allow a member of a licensed organization conducting bingo games to participate in the management of bingo games after being a member of the organization for six months instead of the current two years.

A “yes” vote will amend the Missouri Constitution. A “no” vote will not amend the Missouri Constitution regarding bingo games.

Proposition B – This statutory proposal changes Missouri law to:

· increase the state minimum wage to $8.60 per hour with 85 cents per hour increase each year until 2023, when the state minimum wage would be $12.00 per hour (Thereafter, the minimum wage would increase or decrease each year based on changes in the Consumer Price Index for Urban Wage Earners and Clerical Workers);

· exempt government employers from the above increase; and

· increase the penalty for paying employees less than the minimum wage (full amount of the wage rate plus an additional amount equal to twice the unpaid wages)

State and local governments estimate no direct costs or savings from the proposal, but operating costs could increase by an unknown annual amount that could be significant. State and local government tax revenue could change by an unknown annual amount ranging from a $2.9 million decrease to a $214 million increase depending on business decisions.

A “yes” vote will amend Missouri statutes to increase the state minimum wage rate as follows:

$8.60 per hour beginning January 1, 2019;
$9.45 per hour beginning January 1, 2020;
$10.30 per hour beginning January 1, 2021;

$11.15 per hour beginning January 1,2022; and

$12.00 per hour beginning January 1, 2023.

The amendment will exempt government employers from the above increases, and will increase the penalty for paying employees less than the minimum wage. A “no” vote will not amend Missouri law to make these changes to the state minimum wage law.

Proposition C – This statutory changes Missouri law to:

· remove state prohibitions on personal use and possession of medical cannabis (marijuana) with a written certification by a physician who treats a patient diagnosed with a qualifying medical condition;

· remove state prohibitions on growth, possession, production, and sale of medical marijuana by licensed and regulated facilities, and a facility’s licensed owners and employees;

· impose a 2% tax on the retail sale of medical marijuana; and

· use funds from this tax for veterans’ services, drug treatment, early childhood education, and for public safety in cities with a medical marijuana facility?

State government entities estimate initial and one-time costs of $2.6 million, annual costs of $10 million, and annual revenues of at least $10 million. Local government entities estimate no annual costs and are expected to have at least $152,000 in annual revenues. This amendment does not change federal law, which makes marijuana possession, sale and cultivation a federal offense. This amendment creates regulations and licensing procedures for medical marijuana and medical marijuana facilities — dispensary, cultivation and production, and testing facilities. This amendment creates licensing fees for such facilities. This amendment will impose a 2 percent tax on the retail sale of marijuana for medical purposes by dispensary facilities. The funds from the license fees will go to the Division of Liquor Control to administer the program to license/certify and regulate marijuana and marijuana facilities. The funds from the tax will be used for veterans’ services, drug treatment, early childhood education, and for public safety in cities with a medical marijuana facility.

A “yes” vote will amend Missouri statutes. A “no” vote will not amend Missouri statutes as to the use of marijuana.

If passed, this measure will impose a 2 % retail sales tax on marijuana for medical purposes.

NOTE: There are three marijuana initiatives on the ballot. For a summary of all three, please see: https://www.facebook.com/dohrmanforstaterep

Proposition D - If passed, this measure will generate at least $288 million annually to the State Road Fund to provide for the funding of Missouri state law enforcement and $123 million annually to local governments for road construction and maintenance.

· Nineteen and one-half (19.5) cents per gallon beginning July 1,2019;

· Twenty-two (22) cents per gallon beginning July 1, 2020;

· Twenty-four and one-half (24.5) cents per gallon beginning July 1,2021;

· Twenty-seven (27) cents per gallon beginning July 1, 2022.

The amendment will also increase the tax on alternative fuels used for motor vehicles (including compressed natural gas, liquid natural gas, and propane gas). The amendment will increase the rate from seventeen (17) cents to twenty-seven (27) cents per unit equivalent to a gallon of gasoline or diesel beginning January 1, 2026. The amendment will require the state auditor to audit the state’s use of the revenue generated by these taxes every two years.

Additionally, the amendment will allow a state income tax deduction for the value of any prize or award won in the Olympics, Paralympics, or Special Olympics; and it will create an “Emergency State Freight Bottleneck Fund” for major highway intersections subject to congestion, and will free up financing for road maintenance and improvement projects in the state.

A “yes” vote will amend Missouri statutes to fund the Missouri State Highway Patrol’s enforcement and administration of motor vehicle laws and traffic regulations. A “no” vote will not amend Missouri statutes to increase the motor fuel tax, exempt certain prizes from state taxes or establish the Emergency State Freight Bottleneck Fund.

It is an honor to serve the 51st District in the Missouri House of Representatives. Each week I will issue a capitol report to keep you informed of activities in Jefferson City. Any concerns or issues you might have are of great interest to me. I look forward to your input and thoughts, so please feel free to contact me at any time if you have questions, concerns, or ideas to improve our state government and the quality of life for all Missourians. My telephone number is 573-751-2204 or you may contact me by email at dean.dohrman@house.mo.gov. Thank you for working with me to make Missouri a great place to live.