High court to decide tax protest

Ruling will decide if school district voters get to approve certain tax levy increases.
Friday, September 5, 2003 | 12:00 a.m. CDT; updated 4:11 p.m. CDT, Saturday, July 12, 2008

JEFFERSON CITY — Although arguing for different outcomes, lawyers for taxpayers and schools each urged the Missouri Supreme Court on Thursday to decide whether school districts can constitutionally raise property tax levies to certain amounts without voter approval.

A decision by the state’s highest court could potentially affect at least one out of every five school districts in Missouri. As much as $30 million annually in local school revenues could be at stake. At issue are two constitutional provisions governing elections for school tax levies.

Under the so-called Hancock amendment, approved in 1980, school districts could raise tax levies above $1.25 per $100 of assessed valuation only with voter approval, or if the resulting tax revenues rose by no more than the rate of inflation.

A 1998 constitutional amendment gave school districts the power to set tax levies as high as $2.75 per $100 of assessed valuation without a vote of the people.

School districts across the state have interpreted the 1998 amendment to supersede the 1980 requirement, thus raising tax levies by more than the inflation rate without voter approval.

In 2001 — the latest year targeted by the lawsuit pending before the Supreme Court — 124 of the state’s 524 school districts made use of the 1998 amendment to raise taxes by $30.5 million without voter approval, according to a report by State Auditor Claire McCaskill.

But attorney Craig Johnson, who represents taxpayers challenging the levy set by the Morgan County R-II School District in Versailles, argued that the 1998 amendment did not invalidate the 1980 provisions.

Rather, Johnson said that voter approval still should be required for tax levies of $2.75 or less whenever the resulting revenue increase outpaces inflation as measured by the 1980 amendment’s description of a “general price level.”

Columbia Public Schools have traditionally sought voter approval for tax levies.

“The bottom line is Columbia Public Schools’ tax levies have always been voted on,” said Jacque Cowherd, deputy superintendent for administration.

J.C. Headley, vice president of the Columbia Board of Education, said the board has not discussed the matter.

“I would be reluctant to support tax levies unapproved by the voters because that would not be coherent with the principles of democracy,” Headley said. “I cannot speak for the entire board, but my opinion is that people should have a say about what they pay taxes for.”

If the lawsuit is successful, the 12 plaintiffs who paid their property taxes in protest could be due a refund from the school district. Because the lawsuit is not certified as a class-action, it’s unclear how a successful ruling would affect the thousands of other taxpayers in school districts that did similar things. At the very least, a successful lawsuit would set a precedent for future tax levies.

“The money is not as important as finding out what the constitution means,” Johnson said Thursday. “When the taxpayers voted on the Hancock amendment, they thought they were protecting themselves from the government.”

Missourian reporter Michael Burden contributed to this report.

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