Mayor - Jackson settles tax dispute with county

The road and bridge tax dispute between the city of Jackson and Cape Girardeau County that began in 2002 is days from ending in a settlement.

Jackson Mayor Paul Sander said Thursday that the board of aldermen unanimously accepted a settlement offer from the Cape Girardeau County Commission.

Jackson's board met in special session Thursday afternoon to approve the purchase of some electric generators. It then went into closed session to discuss the offer.

"There are some ongoing negotiations, but it's very nearly complete," Sander said. "By early next week, we could have this thing completely resolved. It's a good agreement for the city and the county and for everybody without having to go through two to three more years of court battles."

Since 2002, Jackson and the county have been haggling over the meaning of a state statute that requires counties to pass on 25 percent of the road and bridge taxes they collect from city residents to cities within each county to pay for road and bridge work. Jackson has maintained it is owed money, while the county has said the city is misreading the statute.

The county initially argued that the statute only applies to "special" taxes, which require a vote by the residents of the county. The county later changed its stance, saying the statute only applies to taxes not mentioned specifically in the state's constitution.

Sander said a couple of minor changes in the settlement need to be made, but commissioners have already said the details wouldn't be a problem.

An official announcement to lay out the details is expected early next week.

Sources close to the situation said the county would pay back taxes dating from 1999 to 2003. The county would not be required to pay interest or penalties. That would amount to $345,667, not including tax revenue from 2004, which totals about $90,000.

According to the agreement, sources say, the county will pay installments for five years.

In August last year, Jackson won the first court battle when Associate Judge Byron Luber ordered the county to pay $471,904 to the city. The judge's decision had included tax revenue from 1997 and 1998. The county had appealed Luber's decision.

The settlement will have no legal impact on the city of Cape Girardeau, which is in a special road district. However, some small towns in the county will be eligible for a percentage of the county's road and bridge tax money.The matter has come before the state's attorney general, who gave a nonbinding opinion that sided with Jackson. The county commission, which then included commissioner Joe Gambill, stood firm on the issue.

Gambill and Commissioner Larry Bock wanted to go to court. Presiding Commissioner Gerald Jones voted with the majority but has said he would have preferred to negotiate. There were negotiation attempts, but the two sides found themselves facing each other in court for the first time in history last year.

The county's posture changed Jan. 1 when Commissioner Jay Purcell took office, replacing Gambill. Purcell approached Sander in an effort to restart negotiations, the mayor said.

Bock, sources say, signed the proposal the commission offered to the city.

The commission was in Jefferson City on Thursday attending meetings. In a telephone interview, Purcell said he and Sander have met on several occasions in the last few weeks. Sander has also met with Jones.

"I believe we're almost there," Purcell said. "When I was campaigning, I made a promise that there would be no more bickering. And we're doing that as a group.

"Mayor Sander has been nothing but hospitable about this whole thing."

In May 2004, Jackson made a settlement offer for $282,000. The county rejected that offer.

The news will likely frustrate many county residents who complain about road conditions. Many have complained about the gravel roads in the area and are upset that more roads aren't paved every year.

This settlement would mean about $90,000 less for county roads outside of Jackson. That would pay for about five miles of blacktop.

bmiller@semissourian.com

243-6635

THE ROAD TO COURT

* Oct. 17, 2002: The city of Jackson writes letter of inquiry concerning state statute 137.556 that says that first-class counties must reimburse cities at least 25 percent of the road-and-bridge tax revenue they collect from those cities with the reimbursement to be spent on roads and bridges within the city limits.

* Jan. 31, 2003: The city and county, along with Cole County, seek an opinion from the state's attorney general.

* July 14, 2003: The attorney general sides with Jackson, saying the county should pay the city 25 percent of the road and bridge taxes collected from city residents.

* Nov. 24, 2003: County commission unanimously votes down two offers made by the city. The first, to settle the matter out of court. And the second to jointly petition the supreme court for an opinion.

* Dec. 10, 2003: City offers formal and final demand, a last resort before going to court.

* Feb. 24, 2004: Jackson files a lawsuit, seeking $472,000 in lost revenue since 1997 when the county earned first-class status.

* March 1, 2004: A county commission letter to the city of Jackson dated March 1 includes an offer from the county to pay $466,666 toward the East Main Street interchange if the city would agree to drop the lawsuit.

* May 20, 2004: The commission offers to begin paying the 25 percent beginning with the taxes billed in 2004 if the city would forgive any back payments.

* May 27, 2004: Jackson makes a counter-offer that the county would pay back all future road and bridge tax money and the county would pay back taxes back to 2002 when Jackson was made aware of the statute. The settlement offer was $282,000. The city sets a June 18 deadline for a response.

* June 29, 2004: Jackson and the county find themselves facing each other in court for the first time in history.

* Aug. 26, 2004: Associate Judge Byron Luber sides with the city, issuing a writ of mandamus against the county, ordering the treasurer to set up a road and bridge fund for the city. He also ordered the county to pay $471,904 to the city in back payments.

* Aug. 31, 2004: County commission votes to appeal the judgment.

* Dec. 13, 2004: Jackson Board of Aldermen discusses potential uses for the road and bridge tax money.

* Feb. 3, 2005: Jackson Board of Aldermen in closed session votes unanimously to accept settlement offer from the commission. The commission has offered to pay road and bridge taxes from 1999 until 2003, or about $345,667.

Source: Court documents, public records; Southeast Missourian archives