HANCOCK REFUNDS COST COUNTY

JACKSON, Mo. -- Hancock Amendment tax refunds cost Cape Girardeau County government nearly $20,000 last year in lost revenue, County Auditor H. Weldon Macke said Thursday.

The county saw its revenue from state fees and sales tax on motor vehicles drop by $19,950.

The county will lose another $2,447 this month, Macke said.

Macke said the money would have gone to road and bridge operations in Cape Girardeau County if the state hadn't withheld it.

The money was part of $6.5 million withheld from cities and counties last year to help reimburse the general revenue fund for Hancock tax refunds covering several years dating back to 1995.

Court battle

Pat Gifford, who manages excise taxes for the Missouri Department of Revenue, said the money was withheld over five months after the Missouri Association of Counties lost a court battle to prevent the withholding.

The Missouri Supreme Court ruled against the Missouri Association of Counties in October 1999, prompting the Revenue Department's actions last year.

"We put the brakes on the whole process initially," said Dick Burke, executive director of the Missouri Association of Counties.

"Our argument was this is local money. This is really a pass through," Burke said from his Jefferson City office. The Supreme Court saw it otherwise.

The withholding has carried over into 2001 with $755,404 slated to be withheld from cities and counties this month for Hancock refunds stemming from tax revenue originating in fiscal 1999.

Cape Girardeau County will lose $2,447 from its January check from state motor vehicle fees and sales tax.

Money from each component of total state revenue is used to reimburse the general revenue fund for Hancock refunds.

But under a state law that took effect in the fall of 1999 money earmarked for counties and cities from the motor vehicle fees and sales tax is no longer counted as state revenue.

The Department of Revenue collects the money and puts it in a separate account. The tax money and interest are distributed to city and county governments.

Although it was enacted too late to prevent the latest refund, Burke said the new law should prevent future withholdings. "We hope so," he said.