What’s in It for Business?

In hydrodynamic terms, the blue-wave election anticipated nationwide for more than a year did indeed lap into Kansas. But it evidently stopped at State Line Road.

To the extent the wave showed up in the two-state area, it made landfallin the 3rd congressional district, wherevoters ousted four-term incumbentRepublican Kevin Yoder in favor ofnewcomer Sharice Davids. And on a statewide basis, it swept Democrat Laura Kelly into the governor’s mansion as she bested firebrand Republican Kris Kobach.

Voters in the two-state region reflected the divided-nation outcomes seen across the U.S., with Kansans electing Sharice Davids to Congress and making Laura Kelly their next governor, while Missourians sent Claire McCaskill packing.

Other than that, as Claire McCaskill might ask, “what blue wave?” She was one of three Democrats in the U.S. Senate to lose re-election bids, allowing Republicans to strengthen their hold on the upper chamber in Washington. That will almost assuredly lead to federal policy gridlock for the next two years, given the Democrats’ ability to narrowly wrest control of the House by a 202-199 margin, with some contents still too close to call.

And the state legislative chambers in Jefferson City and Topeka were well above any blue-wave crest. In each case, Republicans were able to marginally increase their hold on power. Missouri Republicans picked up three House seats to improve their majority to 118-45, while the Senate split remained 24-10 in their favor. In Kansas, the Senate was similarly unaffected, retaining a 30-9 advantage for the GOP. Republicans gained back one of the 12 House seats they lost to Democrats in 2016, ticking their margin in the lower chamber to 86-39. In each case, the numbers are sufficient to keep the new Democratic governor in check with a veto override, assuming if party discipline holds.

Those are the headline-making aspects of the 2018 mid-term elections. For business interests, the evidence of a nation divided presents, somewhat predictably, good news and bad news. The good news? It’s unlikely that major policy shake-ups will come at the federal level; rather, the Trump administration can be expected to keep up the extensive pressure it has put on the regulatory infrastructure as it continues to trim down the Federal Register. And he won’t need House approval to continue stocking the federal judiciary with conservative jurists.

Closer to home, Gov. Mike Parson has spoken frequently about the need to make Missouri more business-friendly and improve the quality of its work force. With a solidly Republican majority in both chambers of the statehouse, any agenda he sets out to improve the business climate is likely to have clear sailing.

In Kansas, things are considerably more complicated. Kelly, working with just a few power-brokers who can prevent veto overrides by breaking ranks with the GOP, could cobble together an agenda that strikes a lot of the right notes with business: the need for a bettereducated work force and higher-education funding, infrastructure spending (particularly on roads) and promoting economic growth in rural areas.

But having just signed off on the largest package of tax increases in the state’s history—under a Republican governor and GOP-controlled Legislature, at that—it will be interesting to see if there is a legislative appetite for further tax increases. And after the hundreds of millions of court-induced funding increases for K-12 education, the stage is set for a serious debate over whether Kansas is getting the correct return on that investment; state test scores haven’t budged despite huge increases in spending over the past two decades.

More than the outcomes of individual races, immediate concerns for business might be the way voters in Missouri addressed ballot initiatives. On one end, they approved phased increases in the state’s minimum wage, which would reach $12 an hour by 2023. Coming at a time when robotics advances are omnipresent, the calculus is already changing for business owners deciding between the costs of manpower vs. machine power.

Perhaps a greater concern to business and civic leaders was voter rejection of a proposed increase in Missouri’s gasoline tax. They have long complained that deteriorating conditions on major highways—Interstate 70, in particular—will seriously crimp economic growth.

About the only business certainty coming out of the ballot measures may stem from approval of use of medical marijuana in Missouri—whoever ends up with one of the few state licenses as a dispensary stands to have a captive market. In the state that gave the nation the Anheuser-Busch dynasty, we’re about to experience a whole new meaning of “this bud’s for you.”