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Government, Politics & Issues

Second Injury Fund among key business issues as General Assembly heads into last two weeks

This article first appeared in the St. Louis Beacon: With only two weeks to go in the Missouri General Assembly's session, those who favor revamping the state's troubled Second Injury Fund -- in limbo for years -- are optimistic.

Dan Mehan, chief executive of the Missouri Chamber of Commerce, and business allies are encouraged that the House acted Thursday to approve, with some changes, the Senate bill (SB1) overhauling the fund. The Senate had approved the bill months ago.

Representatives from both chambers are expected to hash out their differences in conference this week. If agreement is reached, and approved in final Senate and House votes, the final version will be forwarded to Gov. Jay Nixon – a former attorney general who has been calling for changes in the fund for years.

However, it’s not certain that Nixon will go along with the proposed changes – a key reason the conference committee’s work could be crucial.

The Second Injury Fund is one of several business-related issues that hinge on legislative action by the May 17 adjournment.

On Monday, the Missouri House voted 93-64 to approve HB 34, a bill that eliminates the state's prevailing wage requirement  in rural Missouri on publicly financed construction projects. 

The bill already has won Senate approval, and now heads to Gov. Jay Nixon, who can approve or veto it.

The bill had been opposed by labor.  Although the final version doesn't affect heavily union urban areas of the state, the Missouri Chamber on Monday called the General Assembly to eventually act to eliminate the prevailing wage requirement throughout the state.

Other business-related measures still being considered by legislators include:

  • Changing workers compensation to shift occupational diseases back into the workers comp system – and bar lawsuits.
  • Revamping state tax credit proposals to offer tax credits for “new markets’’ and gun manufacturers and to curb the state’s biggest tax-credit programs, which encourage low-income housing and restoring historic structures.
  • Changing the state’s medical malpractice laws to counter court decisions that tossed out some previous restrictions.
  • Making it more difficult for some workers to collect unemployment benefits if their employers say they violated workplace rules.
  • Major cuts in state corporate taxes, coupled with an increase in Missouri’s sales tax rate.
  • A proposed 1-cent increase in the state sales tax to pay for state and local transportation projects. A statewide vote would be required.
  • A proposal to allow utilities to impose a surcharge on customers, estimated to cost up to $125 a year, to pay for infrastructure improvements.

The fate of most of these proposals remain in doubt. In the Senate, for example, filibusters have blocked consideration of medical malpractice changes and the utility surcharge.
Mehan observed that with less than two weeks left, "time is not on the side'' of measures that haven't passed at least the House or Senate by now.

Second Injury Fund at top of list

For many Missouri business interests, though, the fate of the state’s Second Injury Fund is a top concern.

The Second Injury Fund is a special workers compensation program that covers injuries for workers with a pre-existing, permanent disability. It was set up 70 years ago to induce employers to hire wounded veterans from World War II.

Its currently financial problems stem largely from a 2005 action by the Republican-controlled General Assembly, with the approval of then-Gov. Matt Blunt, to reduce the surcharge paid by businesses to cover the claims paid by the fund.

As a result, a recent audit by state Auditor Tom Schweich, a Republican, reported that the fund was broke, with more than $28 million in unfunded liabilities. Attorney General Chris Koster, a Democrat, has stopped paying out benefits until the General Assembly fixes the program.

The changes approved by the state House last week, in effect, phase out the Second Injury Fund and shift the affected cases into the state’s general workers compensation program. However, SB1 also would impose a special surcharge on businesses for several years to cover the Second Injury Fund benefits now owed, but not paid.

The hottest House debate centered on a related workers compensation debate that also moves occupational diseases into the state’s workers compensation program.  Now, some victims of occupational diseases, such as health problems related to job-related exposure to asbestos, are going to court to seek redress from employers.

Some legislators – primarily Republicans -- objected to the change because they believed it was unfair that all employers should pay for those whose workers suffer from occupational diseases, while others – primarily Democrats – contended the change would reduce aid to workers left with permanent job-related disabilities.

Last Thursday’s debate got so heated that House Minority Leader Jason Hummel, D-St. Louis – whose grandfather died of asbestos exposure related to his job – almost came to blows in angry exchanges with Rep. Todd Richardson, R-Poplar Bluff, who was handling the bill on the House floor.

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