Bill aims to widen schools' taxing

Wednesday, February 26, 2003

JEFFERSON CITY, Mo. -- Missouri school districts could ask voters to authorize temporary income or sales taxes as alternatives to further raising property taxes under bipartisan legislation a House committee considered Tuesday.

State Rep. D.J. Davis, D-Odessa, said many districts have already pushed property tax levies -- the primary source of local funding for schools -- as high as they can go.

"Many of us feel like it's time to start looking for alternatives," said Davis, the bill's main Democratic sponsor.

The lead Republican sponsor, state Rep. Roy Holland of Springfield, stressed that the imposition of income or sales taxes would be a local option and one likely attractive only to those with high-income residents or a large retail base.

"If you are a very rural district and all you have are rocks and trees to tax, you are not going to have much in the way of income and not have much in the way of sales," Holland said.

The bill would give systems like the Cape Girardeau School District that receive limited state funding a temporary additional revenue source to address capital improvement needs.

Cape Girardeau schools are one of the state's "hold harmless" districts. These districts receive more per pupil state aid than they would be entitled to under the state system, but their funding is generally frozen at fiscal year 1993 levels.Through the measure, a district could ask voters for either an income tax or a sales tax but not both.

The income tax would be a surcharge of 5, 10 or 15 percent on the amount of state income tax an individual paid. The sales tax could be up to 1 cent on the dollar.

A simple majority of votes cast would be required for passage, and the revenue would be earmarked for a specific purpose, such as purchasing new buses or building improvements, clearly identified on the ballot.

The tax would only be collected for a maximum of three years. A full year would have to elapse after expiration of the tax before a district could ask voters to again consider a similar levy.

Following a failed effort, district officials would have to wait at least 10 months before trying again.

Another provision would allow districts to seek a five-year income tax -- but not a sales tax -- for the purpose of temporarily reducing local property taxes, which would revert to prior levels once the income tax expired. However, the sponsors said the five-year income tax provision may be removed as its implementation could prove cumbersome.

Representatives of the Missouri National Education Association and the Cooperative School Districts of the Greater Kansas City Area testified in favor of the measure before the House Tax Policy Committee.

The Missouri Association of Counties opposes allowing districts to raise sales taxes -- a main source of revenue for counties -- but has no qualms with the income tax component.

The bill is HB 381.

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