Missouri Business Headlines

Supreme Court strikes down unemployment insurance reform law – Missouri Chamber will pursue legislation in 2017

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JEFFERSON CITY – A law to better manage Missouri’s Unemployment Insurance Trust Fund was struck down by the Missouri Supreme Court on July 26, 2016. The High Court ruled that the process by which House Bill 150 was passed was unconstitutional.

Gov. Nixon vetoed the bill on May 5, 2015, while the General Assembly was still in session.  The Missouri House voted to override the veto the bill on May 12, 2015. The Missouri Senate overrode the veto during the September veto session. Plaintiffs argued that the Constitution only allows the legislature to override a veto during the September veto session if the veto occurs within the last five days or after the legislative session. (The governor vetoed the bill before the five day window). In defense, attorneys for the State of Missouri argued that the language in the Constitution creates a veto session, but does not limit what vetoed bills may be considered. The State further argued that any activity not prohibited by the Constitution is constitutional under the plenary powers of the Senate. The Constitution does not explicitly prohibit the Senate’s override vote in September.

As a lead advocate of House Bill 150, the Missouri Chamber strongly supported the bill, which among several provisions, would tie the number of weeks of unemployment benefits that are available to the unemployment rate. The Missouri Chamber will pursue this legislation again in the 2017 Legislative Session.

“The Missouri Chamber is extremely disappointed in the Supreme Court decision. This common-sense measure was designed to protect Missouri’s unemployment insurance system from economic downturns that have repeatedly thrown Missouri’s fund into insolvency over the last decade,” said Dan Mehan, Missouri Chamber president and CEO.

Following the last recession, Missouri’s unemployment insurance system became insolvent and had to borrow money from the federal government to cover claims and employers paid millions in interest alone on the borrowed funds. Many states were faced with the same problem, however, Missouri’s fund is especially unstable. In fact, Missouri is the only state that has had to borrow funds from the federal government to provide benefits to unemployed workers during the last five economic downturns.

 The Missouri Chamber of Commerce and Industry is the largest business association in Missouri. Together, with the Missouri Chamber Federation, the Missouri Chamber represents more than 50,000 employers.

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