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Nixon: Special session is best chance to
reform tax credits

COLUMBIA, Mo. • Gov. Jay Nixon used a speech to school administrators today to press his case for
reducing state tax credits that go to housing developers and historic preservationists.

The best way to find more money for disaster recovery and the state's school foundation formula is to
"rein in the uncontrolled growth of tax credits," Nixon told the Cooperative Conference for School

The problem, he said, is that "tax credit programs have built up a powerful political clientele" and enjoy
strong support in the Capitol.

He said his bipartisan tax credit commission found that the cost of redeemed credits soared by more
than 400 percent from 1998 to 2010, "swallowing up an ever- larger percentage of our net general

"That math simply doesn't add up for a brighter Missouri future," he said.

Noting that he plans to call legislators into a special session next month to revamp economic
development incentives, Nixon said: "This is a critical moment. We will never have a better opportunity
than this September to reform tax credits."

Singling out the two biggest tax credit programs for criticism, Nixon said taking no action would
"perpetuate the topsy-turvy status quo of what I call 1,2 35, 45" -- numbers that refer to Missouri's top
ranking nationally for historic preservation, second-place rating for low-income housing credits, 35th
ranking for K-12 funding and 45th ranking for per capita spending on higher education.

"We can change that," he said, drawing applause. "We've all got to work together."

The governor's speech, which also emphasized his strong belief in public education, wrapped up the
administrators' conference at the Holiday Inn Executive Center here.

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Nixon says tax-credit reform key to
enhancing public education funding
Tim Sampson – Missouri News Horizon

JEFFERSON CITY, Mo. – Speaking to a gathering of public school administrators from across the
state, Gov. Jay Nixon put an educational spin on the push to pass a comprehensive tax-credit reform
bill during the upcoming special session.

On Tuesday, the governor addressed the annual Cooperative Conference for School Administrators in
Columbia, where he said that scaling back bloated tax-credits would be essential to freeing up funds for
K-12 and higher education.

―We need to give the foundation formula more money,‖ he said. ―The best and most timely way to do
this is to reign in the uncontrolled growth of tax credits.‖

The governor has called a special session for next month to pass a sweeping piece of legislation that
would overhaul the state‘s tax credit system, which includes placing caps on Missouri‘s Historic
Preservation and Low Income Housing tax credits – which rank among the largest of their kind in the

These tax credits stand in contrast to funding for Missouri K-12 schools, which ranks 35th in the
country, and per capita higher education spending, which ranks 45th among the 50 states.

Earlier this year, Nixon and state lawmakers approved a budget that cut higher education funding by 7
percent and held K-12 funding even using one-time federal money.

Nixon said he‘d like to see the current gap between tax credit and higher education funding reversed to
better reflect what the state‘s priorities should be.

Looking past the special session, Nixon said he‘d also like to see the legislature take another attempt to
rewrite Missouri‘s education funding formula in 2012. The state is currently unable to fully fund schools
at their required amount, with problems arising from smaller, hold-harmless districts that receive a
larger share of state funds than their enrollment figures would otherwise mandate.

A bill to rewrite the formula was introduced earlier this year, but failed to make it out of the general

―The foundation formula changes passed a few years ago contain funding target that did not
contemplate a national recession,‖ Nixon said. ―Unintended shifts in funding already have started to
occur among your districts, and even more will occur if we don‘t fix the formula this year.‖

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Mo. court rejects challenge to land tax
Associated Press

JEFFERSON CITY, Mo. (AP) -- A developer promising a multi-billion dollar makeover for impoverished
north St. Louis won a legal battle Tuesday as the Missouri Supreme Court rejected a challenge to a
state law directing tens of millions of dollars of tax credits toward his project.

The seven-member Supreme Court was divided in its reasoning but united in the ultimate result of its
ruling, which secures state financing for the developer to assemble and maintain large swaths of land.
Eventually, Paul McKee's NorthSide Regeneration LLC wants to build 10,000 homes and millions of
square feet of office space in a two-square-mile area north of downtown St. Louis.

A lawsuit by two local residents took issue with a 2007 state law enacted with McKee's project in mind.
That law authorizes up to $95 million of tax credits to offset part of the cost of buying and maintaining
large amounts of property in impoverished areas. NorthSide Regeneration so far has received about
$28 million in tax credits.

Tax credits reduce the amount of state income tax owed by a taxpayer. The lawsuit claimed the credits
were similar to getting cash from the state and thus violated the Missouri Constitution by granting public
money to a private person or corporation. A Cole County judge ruled against the plaintiffs in March
2010 and the case was appealed to the state Supreme Court.

In Tuesday's primary Supreme Court opinion, Judge Mary Russell wrote that the tax credits are not a
direct expenditure of public money and the residents thus did not have legal standing to sue as
taxpayers. She was joined by judges Patricia Breckenridge and Zel Fischer.

In a concurring opinion, Judge Michael Wolff wrote that the tax credits are an expenditure of public
money and the residents could sue in their capacity as taxpayers. But Wolff said the tax credits served
a public purpose and thus were valid under the state constitution. He was joined by judges Richard
Teitelman and William Ray Price Jr.

In a separate opinion, Judge Laura Denvir Stith said she agreed with Russell that the residents lacked
the legal standing to sue as taxpayers under current Missouri law. She also agreed with Wolff that the
tax credits performed a constitutionally valid public purpose. But Stith said she would be interested in
considering arguments on whether the standard for allowing taxpayers to challenge tax credits should
be the same as that for challenging direct expenditures.

Paul Puricelli, an attorney for NorthSide Regeneration, said he was especially pleased with the portion
of the court's ruling that acknowledged a general benefit from the proposed $8.1 billion development.

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"I was gratified that some of the judges took the time to comment on the public purposes underlying the
statute, and was happy to see that sort of endorsement of the purpose," Puricelli said.

Although the ruling secures the state financing, other hurdles remain for the redevelopment project. Still
on appeal is a separate July 2010 ruling by a St. Louis judge who overturned the city's approval of a
$390 million tax increment financing package for the development.

One of the plaintiffs in the case decided Tuesday by the Supreme Court said she was not surprised by
the legal loss but nonetheless viewed the lawsuit as a success in the court of public opinion.

"The point of continuing to bring the case to the public eye was to make people aware that NorthSide
Regeneration has collected a whole lot of tax credit money and has not spent a dime north of Delmar
(Boulevard) to set one brick on top of another brick," said plaintiff Barbara Manzara.

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Missouri Supreme Court rejects lawsuit
against NorthSide project
By Tim Logan •

Missouri's Supreme Court on Tuesday shot down a lawsuit challenging the so-called "Paul McKee tax

All seven judges ruled against the suit, which claimed the Distressed Areas Land Assemblage Tax
Credit — key to financing McKee's NorthSide Regeneration development proposal — was
unconstitutional. Though they had differing views on why, and on whether Missouri taxpayers have the
right to challenge tax credit programs in court.

The ruling ends a lawsuit first launched almost two years ago by a pair of north St. Louis residents
challenging the legality of the program, which reimburses developers for the cost of buying land in poor
urban neighborhoods. Since then McKee has claimed nearly $28 million worth of credits for buying land
tied to his NorthSide project. He could receive up to $60 million more.

In opinions issued Tuesday, three judges ruled that the plaintiffs had no standing to challenge the
program, because tax credits aren't a direct expenditure of state money.

Three others wrote in a separate opinion that citizens may have the right to challenge tax credit
programs, but that the Distressed Areas program itself is constitutional.

The seventh agreed with parts of both assessments.

The verdict clears up one of the legal clouds dogging McKee's $8.1 billion proposal.

"I would hope this gives us some momentum," said Paul Puricelli, an attorney for McKee.

Other clouds remain, though, principally an appeal of last summer's ruling by Circuit Judge Robert
Dierker throwing out the project's $390 million tax-increment financing package. Last month, McKee's
attorneys abandoned a plan to ask Dierker to reconsider, choosing instead to fight the matter in the
Missouri Court of Appeals. Any ruling there is likely months away.

If that appeal fails, McKee will have to pay back $8 million he has already collected.

In the meantime, Missouri lawmakers included tweaks to the Distressed Areas program in the tax credit
bill likely to be the subject of a special legislative session this fall. Under the proposal, it would be
capped at $15 million a year, instead of the current $20, though McKee could claim interest payments
over a longer period of time.

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Retailers wind up for Missouri's back-to-
school tax holiday

Alton Square Mall hopes its annual back-to-school promotion will help stem the tide of Illinois shoppers
heading to Missouri for the Show-Me state's sales tax holiday this weekend.

Customers who spend $150 at any of the mall's stores between Thursday and Sunday will get a $15
mall gift card.

Last year, the cross-border migration was not as much of a concern because Illinois leveled the playing
field by holding its own 10-day sales tax holiday on school supplies, clothing and other basic items. But
lawmakers in the cash-strapped state did not renew it.

"We're pretty sad it's not happening this year," said Sarah Bolyard, the mall's marketing manager.
"When you're so close to the state line, it's just another reason for them to go across the river."

In a still-soft economy in which consumers remain cautious, retailers are anxious to capture every sale
that they can during the back-to-school season, the second-biggest shopping event of the year.

So as states debate whether they can afford the sales tax holidays, retailers are desperate to hang on
to them. After all, the sales tax holidays can often be a bigger draw for consumers than a 20 percent off
promotion at another time of year.

"It's not just the savings, but the fact they don't have to pay tax," said David Vite, president of the Illinois
Retail Merchants Association. "Who wants to pay tax?"


Competition for those consumers will be intense this year. Amid job uncertainty and a sluggish housing
market, the National Retail Federation expects back-to-school shopping to be mostly flat this year, for a
total of $68.8 billion in sales.

"This year, the theme for families really comes down to spending where you need to and saving where
you can," Matthew Shay, the federation's president, said in a conference call. "This means that parents
are really going to be thoughtful before they go shopping — not making purchases they don't absolutely
have to."

Last year, Illinois launched its first sales tax holiday, suspending the state's 5 percent sales tax on
certain back-to-school items. It ran Aug. 6-15, making it one of the longest such holidays in the country.

Gov. Pat Quinn, a Democrat, signed the one-year pilot program into law in July 2010, at a signing
ceremony in Chicago that touted high hopes for its impact on a sluggish economy.

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"This is a landmark day for our state," Quinn said in that ceremony. "It's designed to get our consumers
in Illinois back into the marketplace, back into shopping."

It didn't quite work out that way. The administration predicted prior to the 2010 event that it would save
consumers between $40 million and $60 million in sales taxes, based on estimated back-to-school
purchases of between $800 million and $1.2 billion.

In the end, though, consumers made just $323 million in purchases under the program, with savings of
about $16 million in sales taxes, according to the Illinois Department of Revenue.

Still, the program appeared to have helped Metro East retailers.

Sean Phillips, regional marketing director for CBL & Associates, which owns several shopping malls in
the region, said a survey of the retailers at St. Clair Square in Fairview Heights showed single-digit
sales increases during the sales tax holiday last year.

"It wasn't a huge, dramatic increase," he said. "But there was a spike."

By comparison, CBL's malls on the Missouri side either had flat or single-digit sales around the same
period, he said.

But the sales tax weekends are not a draw for everyone.

Valerie Klenke of Greenville said the sales tax holiday did not lead to big enough savings for her to
justify the trip to Missouri.

But she is trying to be more careful with back-to-school purchases overall this year — for example,
digging up old pencils and folders to reuse from last year.

"Normally, we just get all new stuff," she said as she sat in the food court of St. Clair Square on a
recent day. "But now we're trying to be more conscientious about where our money goes."


This is the eighth consecutive year of the back-to-school sales tax holiday in Missouri, where the state
sales tax is 4.225 percent. Many local municipalities also waive their taxes during the holiday that runs
this Friday through Sunday unless they specifically decide to opt out.

The Missouri Department of Revenue doesn't track how much shopping is done during that weekend.
Ted Farnen, a department spokesman, said some retailers reported their sales on a monthly basis and
others did it more frequently, so it was hard to pinpoint the impact of the one weekend.

The sales tax holiday hasn't been a big point of contention in Missouri, at least not recently, though
some are still wary of it.

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"Sales tax holidays are a concern," said Dan Ross, executive director of the Missouri Municipal
League. "We're interested in everything coming into cities that are already beleaguered by revenue

But the Missouri Chamber of Commerce and Industry, which has been a strong proponent of the sales
tax holiday, believes the loss in sales tax is made up by an increase in sales of other taxable items
during the weekend.

Tracy King, the chamber's vice president of governmental affairs, said consumers often made other
purchases while they were in the stores.

"Food court sales go up," she said. "Music, electronics, housewares. Those things also go up."


To prepare for the crowds this weekend, the Best Buy store on Lindbergh Boulevard in south St. Louis
County is beefing up its staff and planning to open two hours earlier than usual — at 8 a.m. instead of
10 a.m.

"It gets insanely slammed," said Jessica Dusheke, a front-end leader at the store. "We generally sell
out of our lower-end laptops."

Customers have already been coming in to make purchases in advance and then will come back over
the weekend to return it and then repurchase it without the sales tax, she added.

But some apparel retailers say they don't think the sales tax holiday leads to an overall bump in sales.
Rather, they say, it just compresses those sales that would have happened over several weeks into a
shorter period of time.

Donna Waldman, co-owner of Just Me Apparel in Manchester, which sells school uniforms, said the
sales tax holiday weekend was still the busiest weekend of the year for her store. But, she said, it
probably would have been so without the holiday.

"The first year they did it was crazy," she said. "The second year was not as crazy. It's declined a bit
because I think parents realize they are only saving like $3 or $5."

The average receipts in her store add up to between $100 and $150. So the savings are more
considerable with bigger-ticket items such as computers, she added.

Jeff Glik, chief executive of Glik's, the Granite City-based chain of clothing stores, thinks his sales in
states where there are sales tax holidays are mostly just condensed into fewer days. He doesn't
necessarily think the holidays lead to larger overall sales for the season because most families plan in
advance how much they will spend on back-to-school shopping.

But the sales tax holidays can be a psychological draw when family finances are tight, he said. So
stores on the Missouri side might have a leg up over their counterparts in the Metro East.

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But at the same time, the higher cost of driving farther and potentially longer lines in Missouri might be
a deterrent.

"So there's not a crystal clear picture," he said.

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New Missouri law on social-media
‘friending’ confounds teachers
By JASON NOBLE- The Star’s Jefferson City correspondent

JEFFERSON CITY | A new law barring Missouri school teachers from exchanging messages with
students on social-media websites such as Facebook is drawing national attention — and criticism.

Lawmakers passed the Amy Hestir Student Protection Act in May, and Gov. Jay Nixon signed it into
law last month.

Named for a Missouri woman who testified that she was manipulated into a sexual relationship with a
teacher while in junior high, the wide-ranging bill contains several new provisions for reporting
instances and allegations of sexual misconduct by teachers and school employees.

But what‘s attracting renewed attention as students prepare to go back to school are provisions
requiring districts to draft policies restricting how teachers may communicate with students. Among
those provisions are very specific limits on teacher-student contact through social-media websites.

Some local and national media have interpreted the social-networking measures to mean teachers
cannot become ―friends‖ with students or contact them in any way on Facebook.

The ACLU, meanwhile, has raised concerns that the language may be so restrictive that teachers could
not legally open an account on networking sites used by students.

Bill sponsors and state-level education groups, however, contend the language does allow teachers to
have presences on the sites, to be friends with students and to send them messages — but only if
those messages are public and readily visible to parents and school administrators.

―This law in no way stops communication with students,‖ said Sen. Jane Cunningham, the St. Louis
County Republican who sponsored the bill. ―In fact, we encourage social-media contact with students.
We just require it to be appropriate, meaning it is not hidden from parents or from school personnel.‖

Cunningham said private online messages represent a ―pathway to sexual misconduct‖ that should be
closed off to ensure children‘s safety.

But since the bill‘s passage, teachers, officials representing school districts and educators and legal
groups have raised concerns that the law could limit legitimate communication, sow confusion among
educators and perhaps even generate a legal challenge.

Randy Turner, an eighth-grade English teacher and prominent blogger from Joplin, Mo., said teachers
communicate with students through internet sites because that‘s the venue students are most
comfortable using.

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―Right now, Facebook is the way they communicate,‖ Turner said of his students.

Sometimes those communications might be public posts about class work or clubs, he said, but other
times students may have specific questions about homework, grades or problems with other students
— issues better suited to a private conversation.

―If you have a student who‘s having a problem in a particular class, they don‘t want to tell the whole
world they‘re having a problem,‖ Turner explained.

Turner, who frequently writes about education issues on his blog, accused the legislation of ―targeting
classroom teachers.‖

In practice, he said, the bill probably would confuse teachers about what is and isn‘t allowable online
conduct and stifle legitimate and valuable conversations with students.

The few bad teachers who do seek to prey on students, he argued, will be able to maintain illicit
communications through any number of other media, whether it‘s e-mail, text messages or a hand-
written note.

―The people who are targeted — the people who bring disgrace upon the teaching profession — this
isn‘t going to do a thing to stop them,‖ Turner said.

Although the legislation as a whole received support from several education and teachers‘
organizations, some of those groups have since questioned the social-media language.

Otto Fajen, a lobbyist for the Missouri National Education Association teachers‘ union, said his
organization would have preferred less specific language in state law, so that school boards would
have more freedom to set teacher-student communication guidelines in their own communities.

―We would‘ve preferred a little more hands-off approach at the state level,‖ Fajen said.

Similarly, officials at the Missouri School Boards‘ Association aren‘t sure why the law focuses on social-
media communication.

―The bottom line is … our policy on communication is not as concerned about the method of the
communication as about the content of that communication,‖ said Kelli Hopkins, an associate executive
director for the association.

Cunningham, however, maintains that sites such as Facebook represent a unique threat to school-age
children and must be addressed specifically.

―If social media are a pathway to sexual misconduct — which we have found that they are — then
eventually (this law) is going to stop the whole problem,‖ she said.

But several observers have suggested the legislation could face a legal challenge on First Amendment

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Under the ACLU‘s interpretation, the law may go too far in its attempts to limit inappropriate
communications between educators and students, said Tony Rother, legal director for the ACLU of
Eastern Missouri.

―This is like taking a sledgehammer to kill a fly,‖ Rothert said. ―It silences a lot more speech than is
necessary to address the actual problem.‖

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Tiny Towns, Expensive Elections, St. Louis
County Report Shows
By Sarah Fenske – Riverfront Times

There are exactly 1,653 registered voters in the tiny municipality of Bel Ridge, Missouri. And so when
the village decided to hold a special election in February 2010 to increase property taxes, the
proposition was bound to be expensive on a per-vote basis.

The St. Louis County Board of Election Commissioners had to print ballots. They needed to get voting
equipment to the polls. And, of course, they had to staff those polls -- with eight poll workers required in
the one location chosen for Bel Ridge. All that when just 11.4 percent of Bel Ridge's already small voter
base -- or 200 people -- bothered to cast a ballot.

Total cost per ballot cast? $22.52.

The new biennial report from the county's board of election commissioners is now out (you can
download a copy from the agency's website). There aren't many surprises here: Missouri's largest
county has remained mostly Democratic, even while trends over the two-year period covered in the
report have Republicans picking up seats elsewhere in the state. And, of course, turnout in these non-
presidential years isn't great -- the highest turnout of the eight election dates included in the report was
November 2010, when just over half (55.8 percent) of registered voters in St. Louis County made a trip
to the polls.

Overall, the report finds, the board of election commissioners has done a good job keeping democracy
affordable. The cost per registered voter was the same in November 2010 ($1.51) as it was in the mid-
term general election in November 2006 ($1.52).

But it's those little special elections where the per-voter cost goes way up, as Bel-Ridge's February
2010 election shows. Yes, the total cost of that day's activity was only $4,503 -- but $22.52 per ballot
cast still seems galling to us. The August 2009 election, in which University City and Berkeley both
voted on sales taxes, was almost as bad -- $12.94 per vote, in an election when just 8.69 percent of
registered voters bothered to show up. Of course that day's $38,522 cost pales in comparison to $1.02
million spent on the November 2010 election, but it definitely seems like more of a waste.

Let's be clear: We're not saying the board of elections should do things more cheaply. And we're not
saying the secret is fewer elections (although we know municipalities often try to sneak tax increases
past voters by scheduling the vote for a low turnout day rather than waiting 'til the midterms -- we're
looking at you, U. City).

We're saying the problem is the area's notorious balkanization. We've got 91 municipalities in St. Louis
County alone! And as the election board's report makes clear, lots of them are ridiculously small -- so
small they make Bel Ridge look like a bustling metropolis. There are actually nineteen municipalities in
the county with fewer than 500 registered voters.

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Here are the ten smallest municipalities in St. Louis County, along with their total number of registered
voters per the most recent report. You tell us: Does this system make any sense?

10. Huntleigh -- 303 registered voters
9. Twin Oaks -- 294
8. Westwood -- 256
7. Vinita Terrace -- 200
6. Kinloch -- 196
5. Bellerive Acres -- 176
4. Glen Echo Park -- 134
3. Country Life Acres -- 92
2. MacKenzie -- 91

and the smallest municipality in St. Louis County is...

1. Champ -- 9 registered voters

Wouldn't you just love to be the mayor of Champ, Missouri? If you can get your vote, along with your
wife's, you probably could! As long as you can hold the turnout to 20 percent, that is...

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Glitch blamed for inaccurate St. Louis
school mailings

ST. LOUIS • A computer glitch at the St. Louis Public Schools resulted in incorrect school assignments
being mailed to parents of more than 11,000 students last weekend.

Gretchen Jansen, whose three children will be attending three different city schools next year, received
letters for two of her children that included their school enrollment information, as well as bus times.
"The name and the address is right. Everything else is wrong," she said.

On Sunday, the school district made automated phone calls to parents apologizing for the glitch and
telling them to expect letters with correct information this week.

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Health insurers prepare for rate review as
consumers absorb higher premiums
By Robert Joiner, Beacon staff

Bernadette Gronborg of Festus bemoans the fact that she is cannot get detailed explanations about
increases in her health insurance. Aged 64 and retired, she's a year short of qualifying for Medicare. In
the meantime, she says, she pays $300 a month for a high deductible policy "that hardly covers
anything, but it's something."

Like a growing number of Missourians, she's pleading with state lawmakers to force insurers to bring
more transparency to rate making.

Bernadette Gronborg says, "The reason they gave me this time was aging. In other words, I didn't die,
so my premiums went up.
"In the last six months, my insurance company has raised my premiums. The reason they gave me this
time was aging. In other words, I didn't die, so my premiums went up. That's a reason I think the state
insurance department needs the authority to review rates so we can keep the cost under control."

She is pleased to know her view is shared by the Department of Health and Human Services.
Beginning on Sept. 1, the Affordable Care Act will require insurers to disclose and justify rate increases
of 10 percent or more. That requirement put Missouri and a handful of other states in a bind because
their insurance departments lack authority to collect rate data or review proposed rate hikes. The other
states include Arizona, Idaho, Montana and Wyoming.

The federal agency has put these other states on notice that it will conduct its own reviews of any
proposed rate increases exceeding 10 percent. An HHS spokesperson says the agency will bypass
states and go directly to the affected insurers to collect the data.

He says the insurer "will have to explain what's the justification for the increase. Is it for higher
administrative cost? Is it for more profit? Are there underlying medical trends necessitating a rate hike?
Actuaries will go over the reasons, give it a good scrubbing."

Though the agency lacks authority to order an insurer to roll back rates, the spokesperson says the
Affordable Care Act has given HHS clout to call more attention to rate hikes deemed excessive. For the
first time, the spokesperson says, consumers will see what rate hikes are being proposed and why.

"We've come up with an understandable form explaining why the rate is being proposed. If the insurer
decides to go through with a rate that we in fact deem to be unreasonable," consumers will have
access to information about why the federal government thinks the rate is too high.


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"We know we can't reject rate increases, but with this transparency, we expect (companies) will
moderate rate increases and add a lot of value to consumers," the spokesperson said.

HHS points to states where it says rate reviews have been beneficial to consumers:

      The insurance commissioner in Rhode Island used the state's authority to reduce a proposed
       increase by one insurer to 1.9 percent from 7.9 percent.
      Consumers in California were spared rate hikes totaling as much as 87 percent after an insurer
       withdrew a proposed increase following a review by the California Insurance Commissioner's
      About 30,000 residents of North Dakota saw their rates cut to 14 percent from 23.7 percent
       following a public outcry.
      The Insurance Department in Connecticut rejected a proposed rate hike of 20 percent by one of
       the state's major insurers.


It was unclear which or how many insurers in Missouri were proposing to raise rates by more than 10
percent. In any case, state insurance officials readily acknowledge their limitations in doing anything
about such rate hikes, whether justified or not. One agency spokesperson noted that under state law,
insurance carriers "are not even required to file such rates with the department."

State Rep. Margo McNeil (right), D-Hazelwood, introduced a bill during the last legislative session to
give the Missouri Department of Insurance the authority to conduct premium rate reviews. Lawmakers
did not pass the bill.

Members of the Insurance Committee said the inaction had nothing to do with lobbying by the health
insurance industry, even though it wasn't happy with the legislation.

"Missouri is a red state, and it pretty much rejects anything that's seen as the federal government
intruding or interfering with their lives," says state Rep. Tishaura Jones (left), of St. Louis, ranking
Democrat on the Insurance Committee and assistant minority floor leader.

The Insurance Department testified on the legislation for informational purposes only, but the agency
director, John M. Huff, didn't seem to imply any tension between the state and HHS over the review of

"Missouri law does not require health insurers to submit rates to DIFP, which was the basis for the
determination by Health and Human Services," Huff says. "The rate review process is intended to bring
more transparency to the health-insurance marketplace."

He says the process "should give consumers a better opportunity to understand exactly what they're
paying for, allowing them to make more informed choices. At the end of the day, that encourages a
more competitive marketplace for individuals and small business to shop for health insurance."

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Groups now feeling the sting of inexplicable rate hikes include rural Missourians, says Tim Gibbons of
the Missouri Rural Crisis Center in Columbia.

"Because of high premiums and with rural people far more dependent on the private individual
marketplace, they end up paying a lot for health care," he says. "We believe that if premiums are going
to go up a substantial amount, there should be some sort of transparency so consumers will know why
their rates are going up."

The most recent study that looked at health care costs in rural Missouri, "Health Care in the Heartland,"
was done in 2007. The study said, "If we look only at the privately insured (rural) families who secured
insurance through an agent or company in the individual market, the average amount spent on health
care was $8,979."

The cost is likely to be much higher three years later.


Another controversial federal directive, which is part of the heatlh-reform law, is the issue of medical
loss ratios. It requires insurers to spend at least 80 percent of premium dollars on direct medical care or
to improve the quality of care rather than use it for overhead, advertising and executive salaries and

Some insurers appealing for at least temporary relief from the new rule say the issue is not as simple
as consumers claim.

Among those warning of fallout over the medical loss ratio issue was United Healthcare of Maryland
Heights, which employs about 2,400 people in Missouri. The group's CEO, Steve C. Walli, didn't object
to the federal government collecting data on the new medical loss ratio standards, but he warns of
several unintended consequences:

      Some carriers might stop selling to new customers.
      Carriers might leave a market rather than operate at a loss.
      Customers could lose important information about insurance if brokers are "forced out of the

Young healthy consumers could have fewer choices.

Walli says, "At lower commissions required to meet the new medical loss ratio rules, brokers may be
unable to offer these products to consumers and, therefore, leave young, healthier consumes with
fewer health-insurance alternatives."

He urged the state insurance department to phase in the new medical loss ratio rules over time "to give
carriers time to adjust internal cost structures to meet these new requirements."

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On the other hand, groups as diverse as Sisters of St. Joseph of Carondelet to Missouri Jobs with
Justice say changes in the medical loss ratio are overdue.

"Missouri stands out for what it isn't doing," says Dr. Rea Beck, who testified for the new medical loss
rule at a state hearing in December.

"Medicare has 3 percent administrative costs. A lot of us in medical care wanted a single-payer
Medicare for all. Congress wanted the new health-care bill to use private health-care insurance
companies. The latter are the second highest profitable businesses in our country. Therefore, it doesn't
seem too much that we are asking for a medical loss ratio of 80 percent to 85 percent."

Ruth Ehresman (right), director of health and budget policy for the Missouri Budget Project, says at
least 34 states have established minimum medical loss ratios or other reporting requirements.

"While these vary widely, they do provide some consumer protection. By standardizing the definition of
medical loss ratios, the Affordable Care Act and HHS regulations will improve consumer protection."

She adds that three of the five insurers with higher market share in Missouri report a medical loss ratio
of near or above 80 percent.

"These five represent almost 86 percent of the market share," she says.

But insurers tend to argue that whether they easily meet the target 80 percent medical loss ratio
depends on the market served. A Missouri Insurance Department report of adjusted medical loss ratio
estimates for 2010 show that the top three insurers serving large employers in Missouri would have
adjusted medical loss ratios above 80 percent. The top three, based on the number insured, are
Healthy Alliance Life Insurance Co., United Healthcare Insurance Co., and Blue Cross and Blue Shield
of Kansas City. The estimated medical loss ratios ranged from 85 percent to 91.4 percent.

Adjusted medical loss ratio estimates for the top three insurers serving small employers were below the
80 percent threshold, according to state data. The top three in that category are Healthy Alliance,
United Healthcare, and Coventry Health and Life Insurance Co. The estimated ratios ranged from 75.8
percent and 77.6 percent

For the individual market, adjusted medical loss ratios generally fell far below the 80 percent mark for
the top three insurers. The top three are Healthy Alliance, Golden Rule Insurance Co., and Blue Cross
and Blue Shield of Kansas City. Their estimated ratios ranged from 63.8 percent to 77.2 percent.

The different estimated ratios by markets are the reason some insurers have appealed to the state to
seek a three-year federal adjustment or waiver at least for the individual market and give insurers until
2014 to meet the 80 percent medical loss ratio requirement.

Consumer groups have been just as insistent that insurers could meet the standard. They base their
arguments on issues ranging from the billions of dollars in profit earned by the top insurers in the state

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and the possibility that the industry as a whole could save millions more through more accuracy in
processing claims.

Some states where the dominant insurance carrier or carriers already have medical loss ratios of at
least 80 percent are still requesting that HHS make adjustments to make higher ratios for all insurers
take effect gradually. North Dakota, for example, has asked permission to set for medical loss ratios at
65 percent this year, 70 percent next year and 75 percent in 2013. Iowa wants a medical loss ratio of
60 percent this year and 75 percent in 2013. Kentucky is seeking an adjustment to set the medical loss
ratio for all insurers in the state to 65 this year and 75 percent by 2013.

A spokesperson for the Department of Insurance says Missouri has filed no waiver to seek a delay in
implementing the new medical loss rule. But he says the agency is "continuing to evaluate the
insurance market as well as how the required medical loss ratio will affect the insurance carriers that
operate in this state."

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Senate passes debt ceiling bill
By Allison Blood on August 2, 2011

The Senate passed the debt ceiling bill onto President Obama with a 74 to 26 vote. Senator Blunt
says though the discussion of how to handle the situation took a long time, it didn‘t follow in the
tradition of accepting debt as the norm.

Blunt admits the bill is not perfect, and not the best possible solution, but he says his priority was
changing spending behavior in Washington.

The bill caps spending, does not raise taxes, and creates a 12 member committee to look over the
federal budget and make recommendations for where else to cut spending. That committee, made
up of 6 republicans and 6 democrats, will give their recommendation later this year.

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States will feel budget cuts from debt
ceiling deal
By Allison Blood on August 2, 2011

Blunt says last year state and local governments got 800 billion dollars from the federal government,
and that‘s way too much.

 Blunt says all states will get less money from the federal government in coming years. He says they
should have seen it coming after all the federal aid they‘ve gotten in the past.

Blunt says states have to balance their budgets, so the federal government should as well. He says
states need to look at their own budgets and start making cuts where they need to, because the
federal government has reached its limit.

He says in a year or two he‘d like to propose a balanced budget amendment to the US constitution,
so this type of discussion never has to happen again.He says states would be in favor of it, because
49 our of 50 states have to balance their budgets each year.

Blunt says he has no desire to be on the committee that will recommend where else to make cuts.
Once this committee makes a decision, states will know just how much they stand to lose.

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Jetton goes public
By Bob Priddy on August 2, 2011

 Former House Speaker Rod Jetton admits he started believing the wrong people who told him what
a great man he was…..and it cost him his marriage, his political life, and his self-esteem.

Jetton writes for a webpage called ―The Recovering Politician‖ that when he was Speaker of the
House, ―I made it clear that if you crossed me or my allies there would be consequences…In my
mind, you were either helping my caucus pass our priorities, or you were slowing us down.‖

Jetton admits he let his political ambitions and the power he had consume him. He says in an
interview on the website that power did not corrupt him as much as it put pressures on him that
people outside politics don‘t feel. He says politicians are human beings prone to the same mistakes
others make. But he says they are given more opportunities ot make those mistakes.

He says he has learned it is easy for powerful leaders to listen to flattery and to discount criticism.
His biggest mistake: failing to balance his life.

Jetton was charged with sexually abusing a woman with whom he had had a one-night stand. He
pleaded guilty to a reduced charge and was put on probation. He has remarried and works for a
Poplar Bluff engineering company.

Here‘s the link to the interview:

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Lawmaker hopes more parents will learn
about saving cord blood
By Mike Lear on August 3, 2011

When a child is born, blood from the umbilical cord or the placenta can be saved and used later to
treat blood or genetic disorders. Many parents don‘t know what options they have in saving that
blood, however.

Representative Tishaura Jones sponsored a bill to require licensed obstetricians and gynecologists
to, beginning October 1, make that information available to expecting women. It must also be
posted on the Department of Health and Senior Services website.

Jones herself had cord blood saved when she had a child. She took up the bill sponsored in 2010
by Senator Jim Lembke.

Jones says parents can utilize public storage, in which case the blood may be used for any child
that is a match for it. More expensive options can allow a family to reserve cord blood for their child
or its siblings, and Jones says financial assistance is available for that in some cases.

She says saved cord blood is used for medical purposes and not research.

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After 1,900-plus columns, a return to my
By MIKE HENDRICKS - The Kansas City Star

One benefit of writing an opinion column is the connection you build with readers. I hear from all
sorts of folks, but mostly they fall into two camps.

There are those who agree with my point of view and therefore consider me something of a genius.
Great minds and all that.

And then there are those who consider me an ignorant boob because they see things differently. It‘s
a nice balance. The slams, especially, keep you humble.

One of my favorites came some years ago from a Blue Springs man who took issue with
observations I‘d made about a radio talker. Me complaining about so and so, the letter writer said,
―is kind of like a skunk complaining that a dead possum stinks.‖

It made me laugh, so I framed it and for years it‘s shared the same wall with a missive from yet
another critic.

Instead of writing a letter, though, this guy went to the trouble of clipping out that day‘s column and
sending it to me.

It‘s not like I needed another copy, but on it he‘d scrawled a message with a black Sharpie:

―More liberal hogwash and sour grapes — live with it, loudmouth.‖

We all have opinions. For the past 14½ years, I‘ve given you my take on the news of the day. Hard
telling the exact number of columns I‘ve written. Somewhere between 1,900 and 2,000.

If you think that‘s an awful lot of opinions for any one person to dish out, I‘d agree with you. That‘s
especially so when you figure that each column contained one if not several nuggets from my gold
mine of sparkling insight.

It‘s way more opinions than I imagined I had in me at the start. Having spent the prior 19 years as a
straight-news reporter, I was curious what the transition had been like for other reporters-turned-

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So I asked Art Brisbane out to lunch. He was executive editor at the time, but in an earlier life he‘d
done two stints as a metro columnist.

Surely Art would have some helpful observations, and one of them stuck with me.

―There‘ll be days,‖ Art said, ―when you‘ll open the newspaper to your own column and say to
yourself, ‗Why can‘t that blowhard just shut the hell up?‘ ‖

Yes, there have been days like that. Maybe not as many as some of you‘ve had, but enough to
know that the time would come when I‘d welcome a change.

That‘s one reason I‘m eager to return to my roots. Another is I can write more in depth than this
column format allows, so from now on look for my byline as a full-time reporter for The Star,
covering local government on both sides of the state line.

Reporters aren‘t supposed to insert opinions into news stories, and neither will I. When I feel like
sharing my views, I‘ll dole them out to my family, friends or the dog — if he‘ll tolerate it.

I‘ll still be covering the stories that matter to Kansas Citians. Let‘s keep in touch.

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Former Akin, Bond staffers donated to
Politico – Dave Catanese

Two top aides to former Sen. Kit Bond donated to Democrat Claire McCaskill this year, according to
Federal Election Commission reports.

Jason Van Eaton, who served as Bond's state director and deputy chief of staff, donated $1,000 to
McCaskill on June 26. Bond's old western district director Matt Roney gave the first-term Democrat
$1,000 back in February.

A Missouri GOPer passes the numbers along to make the unspoken point about the lack of
satisfaction with Rep. Todd Akin and former state Treasurer Sarah Steelman.

Here's the real kicker: Van Eaton was Akin's campaign manager in 2000.

And it's not like there's the excuse that Akin wasn't in the race yet. Van Eaton sent his check more
than a month after Akin declared his candidacy.

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Area senators vote 'yes,' but still disagree
By Robert Koenig, Beacon Washington correspondent

WASHINGTON - Even though all four senators from Missouri and Illinois voted Tuesday for the
debt-ceiling deal, sharp differences exist in their attitudes toward what the framework means and
what the next steps will be.

"My vote for this legislation does not come without some pain," said a tired-looking U.S. Sen. Dick
Durbin, D-Ill., who presided over the crucial Senate vote later that morning. "On this matter, my
conscience is conflicted."

On one hand, Durbin said in his speech before the vote, the plan will avoid default and its
consequences, including higher interest rates. But the Illinois senator also warned that the plan "will
reduce spending on critical programs ... fewer children from poor families will be enrolled in early
childhood education; working families and their children will face even more debt to pay for college
education; medical research will likely be cut."

He said his troubled conscience in voting for the bill recalled a line from William Shakespeare's
"Hamlet" that he struggled to understand: "Thus conscience does make cowards of us all." In this
case, Durbin said, both the debt-ceiling plan and the alternative of default would have
"consequences on innocent people across America."

Sen. Roy Blunt, R-Mo., was less dramatic and more upbeat in discussing his vote, and he took a
different point of view of the plan's impact. "It changes the way Washington does business," he said.
"I hope that, for the foreseeable future, it becomes the pattern that we look at every time we have to
deal with the issue of debt. We need to ask ... why do we have this problem and what are we going
to do to solve it."

Blunt thinks that the plan's new super committee -- technically, the congressional Joint Select
Committee on Deficit Reduction -- "creates a real opportunity to deal with some of the big issues
that Washington has a hard time dealing with." He added: "The right time to deal with difficult
problems is when you have divided government."

The Missouri Republican said that "no party is going to be entirely happy with this agreement.
However, this legislation is the best we can do right now, and it begins the process of changing
Washington's spending behavior. We need to use it as a first step to ensure that we continue to rein
in federal spending and focus on policies that help spur private sector job creation."

Although she did not deliver a Senate speech Tuesday, Sen. Claire McCaskill, D-Mo., said in a
statement that she voted yes because "it was unacceptable for the U.S. government to default on its
debts. Some took an extreme position and said 'no,' but at the end of the day there were a lot of
leaders that came together in this democracy and forged a compromise."

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McCaskill added, "It's not a perfect package, but I'm proud that we were able to find compromise
and avoid what would have been irreparable damage to our economy."

On Monday, McCaskill told St. Louis Public Radio that there were enough good aspects of the plan
to warrant her support, even though "there are many things about this ... I don't particularly like."
Overall, she said, "we got some things that are very important to working class people and to the
middle class." At the same time, she said, "we are going to be able to make some real progress on
our debt structure."

Sen. Mark Kirk, R-Ill., said in a Senate speech that the compromise represented "the best deal that
we can get. ... This bill prevents a crisis from breaking out this week. It also begins to control
automatic spending programs, many of which have run without much accountability since the
1960s." Kirk called the changes "a down payment on further ways to bring common sense,
accountability and control to the spending of our government."

Kirk and Durbin disagreed on the need for higher taxes as part of a budget deal. Kirk said
Americans "tell us that they are not undertaxed. They tell us that Washington overspends." He
argued that the way to pay government debts "is to generate more jobs, creating more taxpayers
who will provide additional revenue -- not new federal, job-killing taxes."

But Durbin said more revenue needs to be part of the super committee's proposal for balanced
deficit reduction that does not unfairly hurt underprivileged and middle-class Americans. "If we are
going to be honest about reducing our debt, we have to be honest on how it will happen," Durbin
said. Everyone agreed that spending needs to be reduced, he said, but we also "have to be
prepared to raise revenue."

Durbin added that a "fair" deficit-reduction plan must tackle entitlement reform and find a way to
raise revenue by asking Americans "who have profited so well in America" to pay higher taxes.
"That is the stark reality."

A competitive auto industry is important
to our area’s future

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By SHEILA TRACY - Special to The KC Star

In the four years since the national economy went into a recession, analysts have speculated about
the future of the job market in the United States. Perhaps most troubling has been the prediction
that domestic manufacturing cannot survive long-term in an increasingly global economy.

My concerns were put to rest when Marty Mulloy, Ford Motor Company‘s vice president of labor
affairs, spoke to the Northland Chamber of Commerce last month. We at the Northland Chamber
now think the recent history of the auto industry can provide an effective guide for creating and
sustaining jobs in what has become a highly competitive marketplace.

In 2007 and 2008, we faced the potential loss of the domestic auto industry. In a weakened
economy, following decades of excess, the domestic automakers found it increasingly difficult to
compete against non-unionized foreign automakers with manufacturing operations in this country.

Let‘s face it, when companies like Ford have labor costs that are $20 to $30 more per hour per
employee than the competition, competitively building product in this country becomes more
difficult, if not impossible.

The prospect of Ford moving out of Missouri for any reason would have had severe consequences
for Kansas City. For more than 60 years, Ford‘s Claycomo plant has been one of the centerpieces
of our city‘s economy. Losing that plant along with its nearly 4,000 jobs, the support it provides to
100 Missouri-based suppliers and the $2 billion in annual purchases made from those Missouri
suppliers as a result of local production, would have been a terrible blow to our state‘s economy.

Fortunately, Ford and the United Auto Workers were able to come together as partners in the last
few years to negotiate new contract agreements that provide a stronger foundation for long-term
competitiveness. As a result, the wage gap has shrunk considerably and the two parties are working
together to grow jobs.

Financially, Ford is enjoying its best year in more than a decade, and earlier this year it paid its full-
time hourly workers an average of $5,000 in profit sharing.

Locally, Ford committed to maintain current employment levels at Kansas City Assembly Plant after
Escape production ends by investing $400 million to upgrade the facility and ready it for production
of a new vehicle line. While that will require almost a full year of construction, in the end, the area
will have a premier manufacturing facility that keeps people employed and continues to support the
local economy and businesses throughout the state.

All of this is fantastic news for us. But Ford has to remain diligent in following its turnaround plan, as
many of the economic pressures the automaker confronted in recent years have not changed. Now
is not the time for the company to revisit the days of excess, and working to improve
competitiveness is more critical than ever so as not to lose the ground gained.

But we‘ve seen firsthand that the cooperation between Ford, the UAW, and the state of Missouri is
making a real difference in helping the automaker compete, and I hope the framework they created

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together will continue in the coming years so that Kansas City remains an important part of the
company‘s manufacturing outlook.

Sheila Tracy of Richmond is the president of the Northland Regional Chamber of Commerce.

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EDITORIALS … & Letters to the Editor
Rep. Long comes through on budget deal
Vote for budget deal was best for all of his Ozarks constituents.
Springfield News-Leader

No one said compromise would be easy, or that the result would make anybody happy.

But Congress and President Obama have done what was necessary, agreeing on a deficit-reduction
plan and an increase in the debt ceiling on the last day to avoid what could have been a catastrophic

We are particularly pleased that Springfield Republican U.S. Rep. Billy Long was able to set aside his
concerns and vote in favor.

He joined other conservatives in declaring victory over a bill that "might not be perfect, but it's a step in
the right direction."

Earlier, it seemed Long had aligned himself with a group of hard-line congressmen who were willing to
risk the consequences of leaving the government to choose which bills to pay today.

In our July 24 editorial, we argued such a move put the government's credit rating -- and perhaps our
whole economy -- at risk. We urged Long to use his proven business skills and pursue common-sense
solutions that looked out for the best interests of his constituents, not just make statements that appeal
to people at the extremes.

In explaining his support for the compromise, Long said: "It has real spending cuts, tough spending
controls, a balanced budget provision and no tax increases."

Senators Roy Blunt, a Republican, and Claire McCaskill, a Democrat, joined in the bipartisan Senate
vote in favor of passage.

Blunt explained: "I don't believe this is the best possible bill; it is the best bill possible at this time."

The bill sets up a two-step process, including some reasonable immediate savings and the promise of
more to come.

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That will require a 12-member committee, evenly divided among Republicans and Democrats, to find at
least $1.5 trillion in additional deficit reductions -- either through spending reductions or changes in the
tax code that would lead to higher revenues over the next 10 years.

It could get messy again when that committee's report comes due at Thanksgiving, but we don't think
it's too much to ask this:

Use common sense and find some common ground. The country needs it.

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Editorial: Local control bill should be part of special
St. Louis Post-Dispatch Editorial Board – Wed., August 3, 2011

There is no good reason why 150 years of state control of the St. Louis police department shouldn't
come to an end this September.

One obstacle, however, stands in the way of this historic change to city governance from becoming a
fait accompli.

His name is Gov. Jay Nixon.

A special session of the Missouri Legislature can consider only matters included by the governor when
he calls it. When Republican legislative leaders announced last month that they were ready to go into
special session to pass a jobs bill, they made it clear that they expected a local control bill to be on the
agenda, too.

City leaders long have sought to wrest control of the police department away from the board appointed
by the governor that has run it since the Civil War.

Last spring, after months of hand-to-hand combat over who would wield power once the city finally
regained control, lawmakers came to agreement. The principal opponents of the bill, the St. Louis
Police Officers Association, backed a compromise based on further assurances that their pensions
would be protected.

Opponents of the bill stood down, and legislative leaders signed off on the pact. But the bill was held
hostage to horse trading between the House and Senate on unrelated legislation. It didn't pass.

Now, the police officers association, long an opponent of local control, is pushing to get the deal done.
In a letter sent to lawmakers this week, the association argues that if the Legislature doesn't pass the
local control bill in a special session, they will face the unwelcome likelihood that it will instead be
foisted upon them by a ballot measure that doesn't properly address all of their concerns.

"For the good of this state and its citizens, we implore you in the strongest possible terms to pass the
provisions of the city control compromise during the upcoming special session of the Legislature," the
association wrote.

The officers should copy the governor on their letter.

Mr. Nixon held up a stop sign when asked about local control during the legislative session, repeating
the insulting canard that local politicians would somehow meddle in police affairs.

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Well, of course they will. So has the governor, and most Missouri governors before him. Such is the
nature of politics. The only question here is whether it makes sense for voters statewide to have the
ultimate say over which politicians will meddle, or whether that power properly belongs to local

That's easy. It may be a dysfunctional City Hall at times, but it's our City Hall.

Political influence slices like a double-edged sword. We have no doubt that some city politicians will
stick their noses where the don't belong. They already do — ask any cop. But, if not politics, what has
stopped the governor from ceding control of the department?

We're way past the point of consensus on the local control bill. Democrats and Republicans support it.
Rival city politicians support it. Business interests and unions are on board.

All are sitting on the local-control bandwagon, just waiting for the traffic-cop-in-chief to wave them
through the intersection.

The light is green. It's time for the governor to get on the local-control bandwagon or get out of the way.

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The Star’s editorial | End state control of
Kansas City Police Department
Kay Barnes didn‘t do it when she was mayor of Kansas City. Unfortunately, neither did Mark
Funkhouser. So now it‘s up to Mayor Sly James to finally provide the leadership required for the city to
manage its own Police Department.

―I do believe that, inevitably, we will have local control,‖ James said in an interview Tuesday. That‘s a
start to eventually wresting powers from state officials.

Yet it‘s disappointing that James doesn‘t plan to directly tackle the issue if it comes up during a special
legislative session that Gov. Jay Nixon has called for this fall.

St. Louis Mayor Francis Slay, in contrast, is leading the charge, along with his city‘s police officers, to
convince the General Assembly to approve a bill that would quickly give St. Louis control of its

Kansas City ought to be standing shoulder to shoulder with St. Louis at the special session. These are
the only two big cities in the nation that don‘t run their own departments. The people elected by voters
to lead the two cities can‘t be held accountable for police staffing, crime-fighting programs, police
budgets or almost anything else having to do with protecting the public.

Because Kansas City and St. Louis have some of the country‘s highest violent crime rates, state-
controlled police organizations clearly are not a panacea in providing high-quality public safety.

On Tuesday, James said he wants to have a ―long conversation‖ with some skeptical civic and city
leaders about how to handle such a major change, including budget issues and who ultimately would
be responsible for overseeing the department.

Of course, if Barnes, Funkhouser and many others hadn‘t sidestepped the issue for so many years,
those questions easily would have had answers by now.

James and others must make sure Kansas City doesn‘t spend much time, if any, in the embarrassing
position of being the only American city not considered responsible enough to run its own Police

              D AILY N EWS C LIPS
                                  C o l l e c t e d / A r c h i v e d f o r W e d n e s d a y , A u g u s t 3 -- Page 37 of 37

Monday, August 1 — No update

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