HANCOCK RETURNS DEBATED; BUDGET DIRECTOR SAYS IMPACT ON STATE'S BUDGET REMAINS UNCERTAIN

A recent Missouri Supreme Court ruling should generate greater tax refunds, two Republican lawmakers say.

But state Budget Director Mark Ward said he doesn't know yet what impact the ruling will have on the state's budget or tax refunds.

"We are reviewing it," he said. "It is a complicated issue."

The Supreme Court ruled last week that money from a voter-approved conservation sales tax can't be counted as part of total state revenue as part of the spending lid calculations of the state's Hancock Amendment.

The ruling came in a lawsuit brought by the Conservation Federation of Missouri.

The one-eighth cent conservation sales tax was approved by voters in 1976.

The state's Hancock Amendment was adopted by voters in November 1980. In that same election, voters approved a measure that earmarked conservation sales tax spending for conservation uses only, the two GOP lawmakers said.

In a 6-0 ruling, the justices said none of the conservation tax money should be used for tax refunds.

The two lawmakers -- Reps. Charlie Shields, R-St. Joseph, and Delbert Scott, R-Lowry City -- said the ruling means conservation tax money should not have been included in the original formula for the state spending limit.

Changing the formula would reduce the base-year ratio on which state revenue and personal income calculations are made to determine the spending lid for Missouri's state government, Shields said.

The result would mean greater refunds for taxpayers, the lawmakers said.

They estimated taxpayers are owed an additional $51.9 million or $12.5 million a year in Hancock tax refunds for every fiscal year since 1995.

In addition, Missourians are owed another $18 million in tax refund checks scheduled to be mailed in October, Shields said.

"What we're going to get is $245 million," he said. "What we should get is $263 million."

Shields said the conservation tax brought in $31 million in fiscal 1981, the year the Hancock Amendment spending lid was first calculated.

Today, the sales tax generates nearly $80 million a year.

Scott, House minority leader, said the fiscal 2000 budget approved by the Legislature includes a set amount for Hancock refunds.

The October refund can't be increased without legislative approval. Scott said additions to the refund probably wouldn't be addressed until next year. At that time, lawmakers could approve a supplemental appropriation.

Scott said it could take a lawsuit to clarify the Supreme Court's latest ruling and force Gov. Mel Carnahan to refund more money to the taxpayers.

"I don't anticipate him being friendly to the taxpayers," said Scott.

The Supreme Court decision could impact the budget that begins July 1.

Carnahan could withhold some of the money budgeted for capital projects, Scott said, but increasing the refunds won't necessarily cut into state agency budgets.

Scott said past history shows there has been plenty of money in the state treasury.

"The budget is a moving target," he said, and the Carnahan administration has routinely underestimated state revenue.

"With a billion-dollar-a-year growth every year for the last five years in the state budget, don't tell me you have to cut programs," Scott said.