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Pritzker pushes measure to change Illinois pension funding plan

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SPRINGFIELD, Ill. — With a month-and-a-half left in the Illinois General Assembly’s spring session, Gov. J.B. Pritzker’s administration is readying its proposal to address the state’s chronically underfunded pension system.But the governor last week also acknowledged in the strongest terms yet that any plans to finally get the state on track toward fully funding retirement plans for public school teachers, university employees and state workers could be derailed by a looming legal fight over a 14-year-old law.Pritzker’s comments came as Illinois’ two influential statewide teachers unions were wrapping up a “week of action,” encouraging their members to call and email lawmakers and urge them to essentially “undo” a 2010 law that created a new less generous pension system for those who began their jobs after Jan. 1, 2011.The General Assembly and then-Democratic Gov. Pat Quinn quickly approved that law in the wake of the Great Recession, which forced state leaders to grapple with decades of underfunding in Illinois’ pension systems.But in the years since, economists and labor leaders have repeatedly warned that the retirement benefits in the Tier 2 system are so low, they might violate federal “Safe Harbor” laws. Those laws dictate Social Security replacement plans, like pensions, can’t offer benefits that don’t at least match Social Security.Lawmakers – the majority of whom were not in the legislature when Tier 2 was passed – have picked up on those warning signs, and in the last few years have been studying the issue in occasional committee hearings. In February, Pritzker signaled his willingness to get ahead of the looming legal issue, and on Thursday he took a big step forward in his position.“We need, obviously, to make some changes to Tier 2 to make sure that we’re meeting the Social Security Safe Harbor,” the governor said at an unrelated news conference late Thursday night in his Capitol office. “We don’t yet really know what that’s going to cost.”Earlier in the day, Pritzker’s top budget advisor, Governor’s Office of Management and Budget Director Alexis Sturm, told a House committee that the governor was “open to that conversation” about increasing the cap on Tier 2 pension earnings to match Social Security.Ahead of Pritzker’s annual budget address in February, Sturm and other top staffers laid out a larger plan to address Illinois’ underfunded pension systems, which included a nod to the Social Security issue.Read more: With budget proposal and fiery address, Pritzker paints himself as progressive pragmatistAt the time, the plan merely encouraged the boards of the state’s retirement systems for teachers, university employees and state employees, along with the legislature, to “review and adjust, if necessary, the structure of the Tier 2 pensionable earnings cap.”But in acknowledging the Tier 2 issue on Thursday, the governor also signaled to New York-based credit ratings agencies that he was still committed to fiscal moves that would earn the state further credit upgrades. Pritzker said state leaders “just need to be exceedingly careful” about pension “sweeteners” – including any fix made to Tier 2 pensions.“So that, in a way, is a sweetener in the sense that it’s going to cost taxpayers something,” Pritzker said. “But we have to do it because the alternative would cost the taxpayers much more.”There is no official price tag on tweaking the law to comply with Social Security rules, but one analysis run for the state’s Commission on Government Forecasting and Accountability last year estimated it could cost the state $5.6 billion through 2045, or about $255 million annually.Path to 2048Sturm’s appearance in a House committee Thursday was intended to sell lawmakers on the governor’s plan to fully fund Illinois’ pensions by 2048. Pritzker’s team had laid out the proposal ahead of his budget address in February, and one credit rating agency immediately signaled its approval.Read more: Pritzker proposes over $2B in spending growth, backed by tax increases for corporations, sportsbooksThe plan would alter a 1995 law signed by then-Republican Gov. Jim Edgar that put the state on a 50-year ramp to get Illinois’ pension systems to a 90 percent funded level by 2045.Pritzker wants to extend that deadline three more years, but up the funding goal to 100 percent. He’s also pushing to keep spending half of the amount of money Illinois is currently spending on debt repayment for old bonds taken out in 2003 and 2017 when they’re retired in the early 2030s and put that money toward the pension systems.The 2003 bonds were taken out to pay for pensions during Democratic Gov. Rod Blagojevich’s administration, and the 2017 bonds were sold in the aftermath of the state’s two-year budget impasse under Republican Gov. Bruce Rauner to help pay down Illinois’ record near-$17 billion backlog of unpaid bills accumulated during the political struggle.Sturm called the plan a “balanced” way to address Illinois’ longstanding practice of not paying enough into its pension systems, creating an ever-growing sum of unfunded liabilities.“It was there in the ‘90s, it was there in the ‘70s and the ‘40s,” Sturm said of the pension debt.She also clarified that Pritzker is “not interested” in issuing any bonds to put an infusion of cash into the state’s pension systems, a move made under Quinn in 2010 and 2011 several years after the state borrowed $10 billion in the 2003 bond sale under Blagojevich.Thursday’s discussion on the pension plan was subject matter only, meaning it did not receive a vote from the committee. It’s unclear if the measure will pass before lawmakers adjourn their spring session in May.Just as in the past, public employee unions will likely have tremendous influence over whether the legislature approves the governor’s pension plan.Pat Devaney, the secretary-treasurer of the Illinois AFL-CIO organized labor umbrella organization, told the panel Thursday that the We Are One Illinois coalition – a group of unions that formed after the Tier 2 pension system law passed – was not yet taking a stance on Pritzker’s plan.“It is difficult to provide comprehensive comments on the governor’s proposal without having specific legislative language and funding projections to review,” he said. “That said, the problematic nature of the current funding ramp is well-documented.”The coalition, Devaney said, “generally” supports making larger-than-necessary contributions to the state’s retirement systems.“The state has always set forward with a plan to underfund the pension systems,” he said. “We’re encouraged that the governor has a plan to actually fund it to 100 percent and come out with a deliberate, responsible way to provide that funding.”Tier 2 historyBut Devaney had a much more strident position to share with House members about Tier 2 pensions.“We can do that,” he said of Pritzker’s plan to shore up Illinois’ pension systems. “But we can also address the illegal, immoral, and, frankly, things that are hurting the operations of government at every level with the Tier 2 benefit level.”After a long pause, state Rep. Steve Reick, R-Woodstock, signaled his agreement – with a big caveat.“Yeah, but how?” Reick said. “That’s the thing that we need to get people together in a room and talk about because this isn’t gonna get any better for the next 20 years. I’m not going to be here 20 years from now but…I’d like to leave knowing that we started something that would get us to where we want to be.”Reick said his email inbox has been inundated with messages about the Tier 2 pension system. The Illinois Federation of Teachers and Illinois Education Association – the state’s two largest teachers unions – have encouraged their members to flood their local lawmakers with requests to address the Tier 2 pension system.As of Thursday evening, union members had sent more than 55,000 letters this week to lawmakers urging them to “fix” Tier 2 pensions, according to the Illinois AFL-CIO.“I mean, I get a lot of emails from people who demand that we do away with Tier 2 altogether and go back to Tier 1,” Reick said later on during the hearing. “Um, that’s not going to work.”As Illinois began its slow recovery from the Great Recession, lawmakers were facing a sudden jump in unfunded pension liabilities, due in part to poor investment returns as the stock market hobbled its way to recovery. But the General Assembly also felt the squeeze from decades of decisions from their predecessors shorting the state’s pension systems.Beginning in 2009, credit rating agencies began a series of downgrades to Illinois’ ratings of creditworthiness, making it more expensive for the state to borrow money via bond sales. In explaining their reasoning at the time, the influential agencies repeatedly noted the state’s pension systems were underfunded.The financial downturn came not long after the state skipped out on paying half of its pension obligation for two years under Blagojevich, which came on the heels of more than 11,000 state workers taking early retirement under Republican Gov. George Ryan. Both moves increased the liability to the state’s pension systems by billions of dollars.So in 2010, the Democratic-controlled General Assembly created the new Tier 2 system, which nixed the Tier 1 practice of 3 percent compounded annual cost of living adjustments for retirees, raised the age for retirees to get full benefits from 62 to 67 and changed eligibility for full benefits from five years of service to 10 years.Tier 2 also caps the maximum salary a pension can be based on and changes the calculation of the base salary to discourage a practice known as pension “spiking,” wherein those close to retirement age would seek raises to substantially increase their pension under the Tier 1 system.Because it takes a decade to “vest” in the Tier 2 pension system, those who made late-career switches to government employment have begun to be eligible for retirement only in the last few years.Capitol News Illinois is a nonprofit, nonpartisan news service covering state government. It is distributed to hundreds of newspapers, radio and TV stations statewide. It is funded primarily by the Illinois Press Foundation and the Robert R. McCormick Foundation, along with major contributions from the Illinois Broadcasters Foundation and Southern Illinois Editorial Association.



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Missouri Legislature passes fix to property tax freeze law

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One year after they passed the original legislation, Missouri legislators have approved a fix to a law allowing property tax freezes for seniors.Members of the House voted 139-0 Friday to pass the bill. Since it has already gone through the Senate, it now goes to Gov. Mike Parson.The current law allows local governments to pass ordinances that would freeze property taxes for seniors. It also would allow voters to approve such an ordinance.St. Charles and St. Louis counties, as well as the City of St. Louis, have already passed their own ordinances on the issue.The way the law is structured now, only seniors who receive Social Security would be eligible for a property tax freeze. That requirement has left out seniors who are on pensions like police officers and firefighters.Sen. Tony Luetkemeyer, R-Parkville, sponsored both the original bill and the changes this session.“Rather than tying eligibility of the property tax freeze to Social Security eligibility, we instead tied it just to age,” Luetkemeyer said.Rep. Ben Keathley, R-Chesterfield, said the legislature did the first part of the job last year.“Now it’s time to make sure that this language clarifies and we can properly expand this to make sure all our seniors can benefit,” Keathley said.The freeze would still only be applicable in municipalities that have approved an ordinance.One provision that some Democrats wanted to add this session was a means test, under which seniors with higher incomes would not qualify for the freeze.That language was not added to the final bill.



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Missouri legislature passes anti-ranked choice voting resolution

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The Missouri legislature has passed a proposed constitutional amendment that, if approved by voters, would prohibit ranked choice voting in most of the state.Members of the House voted 97-43 Friday to pass the resolution. It has already cleared the Senate and does not need the approval of Gov. Mike Parson.The resolution states that under no circumstances “shall a voter be permitted to cast a ballot in a manner that results in the ranking of candidates for a particular office.”The resolution has a carve-out for St. Louis, which implemented an approval voting system in 2020 for its municipal elections.Through this system, voters can select as many candidates as they want in a primary. The top two candidates then go to a runoff election.The proposed constitutional amendment would not affect St. Louis’ system.Rep. Ben Baker, R-Neosho, sponsored the House version of the resolution. He said he was not in favor of the exception for St. Louis.“I’m not OK with it, but this is where we’re at with this language of what we can get done in the body. I think it’s still a big step in the right direction,” Baker said.In speaking against the resolution, Rep. Eric Woods, D-Kansas City, said it was unnecessary and not the way to reassure people about election results.“There are other ways, other systems, other ideas that we can adopt to keep our democracy or our republic, whichever word you want to prefer to use, vibrant,” Woods said.In addition to the ban on ranked choice voting, the resolution states that the candidate who receives the most votes in a political party primary will be the only candidate on the ballot for November for that party.The resolution states that all elections will be by paper ballot or by “any mechanical method prescribed by law.”Included within the proposed resolution is language stating that only U.S. citizens who are 18 or older, residents of Missouri and residents of the political subdivision they vote in are entitled to vote in elections. That language does not make any changes to existing law.Similar language has been a point of contention all session, where it has been in the same conversation as an amendment that sought to make it harder to amend the constitution.Democrats have stated all session this language was being added by Republicans to trick voters into approving it. Senate Democrats filibustered for about 50 hours, eventually killing those proposed constitutional changes.



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Missouri session ends without constitutional amendment changes

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Missouri’s chaotic and divisive legislative session sputtered to a close on Friday with the inability to pass a measure making it harder to amend the state’s constitution.The failure of constitutional threshold boost, precipitated by a marathon Democratic filibusters and GOP infighting, is seen as a major win for abortion rights proponents. And some lawmakers see the end of this session as an end of an era where a GOP supermajority could impose its will.Since the beginning of the year, Republicans have struggled to pass a measure that would require any constitutional amendment to pass in five out of eight congressional districts in addition to a statewide majority. The big sticking point was whether to include other provisions, such as a measure banning noncitizens from voting — something that’s already illegal in Missouri.After a record-setting Democratic filibuster, Senate Republicans threw in the towel on having other items in Sen. Mary Elizabeth Coleman’s resolution when they couldn’t get enough members to force a vote. House Republicans rejected any proposal that didn’t include the noncitizen voting, and the Senate adjourned shortly after 10 a.m. — effectively killing the proposal for this year.Senate President Pro Tem Caleb Rowden, R-Columbia, issued a Tweet on the social media platform X saying that the other provisions, dubbed ‘ballot candy’ by both critics and supporters of the constitutional threshold boost, were “unnecessary” and “deceptive” additions aimed at misleading voters.
This week, the Missouri Senate spent almost 50 straight hours attempting to pass IP Reform. Unfortunately, we were unsuccessful and sent the bill to the House.Late yesterday, the House attempted to pass the same bill back to us. There’s no way the Senate can get done in 8 hours…— Caleb Rowden (@calebrowden) May 17, 2024

He reiterated that message in his end of session press conference.“I think the entire fact that had to be in there is a slap in the face to Missourians,” said Rowden. “I think that Missourians are absolutely smarter than they give them credit for.”Democratic Senate Minority Leader John Rizzo, D-Independence, said the demise of the bid making it harder to amend the Missouri Constitution helped preserve Senate traditions — including an aversion to forcibly ending debate using what’s known as the previous question motion.“Democrats and Republicans came together this past week, and said enough is enough of this hyperbole,” said Rizzo, D-Independence.Rizzo also said it was likely that Republicans would try again at some point to reign in the initiative petition process. “And it might come back with a vengeance honestly,” he said.Some Republicans contended that the only way to raise the bar for constitutional amendments would be to include other items, especially since any proposal would face a torrent of expensive and well organized opposition. Similar measures to boost the threshold to pass constitutional amendments failed resoundingly in Arkansas and Ohio.Sen. Rick Brattin, R-Harrisonville, said if the proposal went down in flames this year, it could shelve the idea of making it harder to amend the Missouri Constitution for the foreseeable future — pointing to how GOP leaders abandoned ‘right to work’ as a priority after it was overwhelmingly repealed in a statewide referendum.“I would rather see that we’re able to cover a multitude of areas that are important to voters to protect our election process, and that’s what we’re attempting to do,” said Brattin, the head of the Missouri Freedom Caucus.

Brian Munoz

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St. Louis Public RadioMissouri House Speaker Dean Plocher, R-Des Peres, speaks to Majority Floor Leader Jon Patterson, R-Jackson, on Thursday during the waning days of the legislative session at the state Capitol in Jefferson City.

Abortion vote looms largeHouse Republicans, such as Speaker Dean Plocher, expressed exasperation that the Senate couldn’t get their act together on what they dub ‘IP reform.’ The Des Peres Republican has contended that the failure to get it done could make it more likely that a proposal legalizing abortion will pass.“We the House are not responsible for abortion that may pass in Missouri. I blame that squarely on the Senate,” Plocher said.Plocher and other Republicans wanted the constitutional threshold boost on the ballot in August — with the hopes it would pass and create a tougher standard for the abortion initiative to pass in November. But Senate President Pro Tem Caleb Rowden questioned whether that would actually happen, adding that it’s possible that any initiative in November would only need a majority.“The notion that IP reform being on the ballots is the magic bullet to make sure that the abortion IP doesn’t pass is ridiculous,” Rowden said. “It’s going to take Republicans and conservatives and folks who disagreed on IP folks who disagreed on any number of things to get out to the ballot and vote against that thing in November.”Sen. Andrew Koenig, R-Manchester, strongly disagreed with Rowden’s interpretation.“The plain reading of the constitution says it goes into effect 30 days after. So if it was on the August ballot, then that means per the plain reading of the constitution, it would be in there the first week of September,” Koenig said. “Now, how would the courts rule on that? I’m sure there’d be lawsuits and sure there’s a chance. … But the plain reading of the Constitution says 30 days.”Sen. Bill Eigel, of Weldon Spring and a member of the Freedom Caucus and a candidate for governor, said “I still have confidence that Missouri didn’t become any less pro life as a result of the failures on the Senate floor.”“We’ve been winning that fight for two decades in this state,” Eigel said. “And I think that a lot of folks, no matter how many failures we see from all these politicians, I think a lot of folks are going to be surprised by a whole bunch,” he said.But House Minority Leader Crystal Quade not only expects for voters to find favor with the abortion legalization measure, but for it to help elect enough Democrats to break the GOP supermajority.“This is something that Missourians want, because they’re tired of Republican overreach,” Quade said. “They’re tired of politicians in their doctor’s offices and telling them how to live their lives.”

Brian Munoz

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St. Louis Public RadioMissouri Senate Majority Floor Leader Cindy O’Laughlin, R-Shelbina, pauses while giving closing remarks on Friday during the last day of the legislative session in Jefferson City. O’Laughlin gaveled the Missouri Senate out minutes after gaveling in and a week of disfunction.

Session personified by bitter GOP factionalismFriday’s Senate adjournment marked a somewhat anticlimactic end to a session that was highlighted by bitter fighting between Senate GOP leadership and the Missouri Freedom Caucus.The disarray included protracted clashes between the two factions over a multitude of issues, including the reauthorization of a tax known as the FRA funding the state’s Medicaid system. That led to an unprecedented situation where lawmakers ended up approving the budget without going to a conference committee.Senate Majority Leader Cindy O’Laughlin adjourned the Senate much earlier than usual on the last Friday of session — and said she did so because she didn’t want to exacerbate tensions. Thursday featured bitter public sniping between Eigel and Freedom Caucus critic Sen. Mike Cierpiot.Plocher alluded to how the Senate didn’t approve a single bill during the last week of session — something that hasn’t happened in recent memory.“Every year is unusual,” he said. “But this has been a less productive year on the other side of the building when the House has put its foot forward for the state of Missouri.”Quade pointed out that, excluding budget bills, this was the least productive session in terms of legislation passed in recent history.“It is an interesting feeling as a Democrat here in Missouri when we are relieved that they aren’t able to get their act to get together enough to actually do something,” Quade said. “There were so many terrible bills that did not pass, not only because of their infighting, but because of our Democrats doing such an amazing job of understanding how to navigate that.”

Brian Munoz

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St. Louis Public RadioMissouri House Minority Leader Crystal Quade, D-Springfield, wipes a tear away after giving her farewell address on Friday during the last day of the legislative session in Jefferson City.

But Quade added that lawmakers also didn’t act on things with bipartisan appeal, including increasing the age that someone can get married from 16 to 18 years. Sen. Lauren Arthur, D-Kansas City, also noted that an effort to provide tax credits to help child care centers also faltered.“That is the major disappointment of session for me. And just because we didn’t pass legislation doesn’t mean that the issue has gone away,” Arthur said. “If anything, it’s going to get worse, because there hasn’t been legislative action taken.”Rowden said that the fighting masked some successes, including the passage of wide-ranging education legislation.“The noise gets a lot of attention around here, and it probably will always be that way,” Rowden said. “But it isn’t the thing that at the end of the day defines this place. And it shouldn’t be the thing that motivates us. I make decisions not about not based on what people are going to say about those decisions on Twitter, but about what is in the best interest of the state and what’s in the best interest of this institution.”Brattin, though, said the session showed how ineffective Republican leadership can be — even when they have overwhelming supermajorities.“When you’re not doing what you said you were going to do when you are elected, people are going to be angry and mad at you for not doing what you said you were going to do,” Brattin said. “And that’s what the Republican Party has turned into: Feckless, spineless, ambassadors of nothing, and not fighting for what’s right.”

Brian Munoz

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St. Louis Public RadioMissouri Sen. Rick Brattin, R-Harrisonville, and Freedom Caucus member speaks on Friday during the last day of the legislative session in Jefferson City.

This session also marked a rare instance where Democrats, who have been outnumbered for years in both the House and Senate, played a major role in killing a major GOP priority. That came after Senate Democrats played a crucial role in passing the budget and the authorization of the FRA — and letting bills they oppose, like a ban on state funding for Planned Parenthood, go to Gov. Mike Parson’s desk.But Rizzo said the ultimate failure to get a constitutional threshold ballot item to voters was less about growing Democratic influence in the General Assembly — and more about a rejection of what he called ‘bullying.’“I don’t think that this body wanted to give certain people in that chamber a win when they’re in the throes of session after the way they were treated all year. And I truly am proud of all the Democrats and Republicans that stood up to that, truthfully.”Rep. Ashley Aune, a Kansas City Democrat who may succeed Quade as minority leader, added that the prospect of more Democrats could change how the legislature operates.“We’ve been left out of the room, but we proven time and time again, even with a supermajority of Republicans, that they still need us to pass priorities,” Aune said.See photos from the end of the 2024 Missouri Legislative Session by STLPR’s Brian Munoz below:

Brian Munoz

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St. Louis Public RadioMissouri State Rep. Adam Schwadron, R-St. Charles, reacts while talking to colleagues on Thursday during the waning days of the legislative session at the state Capitol in Jefferson City. Schwadron is sporting first-place medals for winning the legislature’s annual trivia showdown.

Brian Munoz

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St. Louis Public RadioMissouri Rep. Kemp Strickler, D-Lee’s Summit, speaks with Rep. Emily Weber, D-Kansas City, on Thursday during the waning days of the legislative session at the state Capitol in Jefferson City.

Brian Munoz

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St. Louis Public RadioMIssouri House Speaker Dean Plocher, R-Des Peres, looks over Majority Floor Leader Jon Patterson, R-Lees Summit, on Friday during the last day of the legislative session in Jefferson City.

Brian Munoz

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St. Louis Public RadioMissouri Senate Majority Floor Leader Cindy O’Laughlin, R-Shelbina, reacts while speaking to Sen. Bill Eigel, R-Weldon Spring, on Thursday during the waning days of the legislative session at the state Capitol in Jefferson City.

Brian Munoz

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St. Louis Public RadioMissouri State Rep. Jeff Myers, R-Warrenton, launches a rubber chicken slingshot on Thursday during the waning days of the legislative session at the state Capitol in Jefferson City. Republicans and Democrats took turns shooting rubber chickens across the floor in reference to a piece of legislation that bans Homeowner Association-led bans on chicken ownership.

Brian Munoz

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St. Louis Public RadioNaomi Groce, 2, presses a button held by Missouri State Sen. Rusty Black, R-St. Louis County, that makes his tie pig noises on Thursday during the waning days of the legislative session at the state Capitol in Jefferson City.

Brian Munoz

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St. Louis Public RadioMichele Shanahan DeMoss, of Peculiar, Mo., hugs Missouri State Rep. Yolanda Young, D-Kansas City, on Friday during the last day of the legislative session in Jefferson City. DeMoss’ daughter, Blair, was killed by celebratory gunfire in 2011.

Brian Munoz

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St. Louis Public RadioMissouri State Rep. Justin Hurlbert, R-Smithville, holds his 2-year-old daughter Rebekah on Friday during the waning hours of the legislative session in Jefferson City.

Brian Munoz

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St. Louis Public RadioMissouri State Rep. Ben Baker, R-Neosho, fans himself on Thursday, May 16, 2024, during the waning days of the legislative session at the state Capitol in Jefferson City.

Brian Munoz

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St. Louis Public RadioMIssouri House Speaker Dean Plocher, R-Des Peres, wipes away tears while giving his farewell address on Friday during the last day of the legislative session in Jefferson City.

Brian Munoz

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St. Louis Public RadioMissouri House Minority Leader Crystal Quade, D-Springfield, wipes a tear away after giving her farewell address on Friday during the last day of the legislative session in Jefferson City.

Brian Munoz

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St. Louis Public RadioThe Missouri House of Representatives votes on a piece of legislation on Friday during the last day of the legislative session in Jefferson City.

Brian Munoz

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St. Louis Public RadioThe sun sets on the Missouri State Capitol on Thursday in Jefferson City.



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