Proposal offers penalty-free period for overdue taxes

JEFFERSON CITY, Mo. -- For a limited time only, the state would waive penalties and interest on overdue taxes under a proposal given initial House approval Tuesday.

Gov. Bob Holden has touted similar measures as a way for the state to bring in revenue for public elementary and secondary education -- a theme repeated in debate by House Democrats.

But some Republicans questioned why incentives are needed to get delinquent taxpayers to pay.

"If you know that there are taxes out there that are delinquent, why in the world aren't we going after them?" said Rep. Dan Hegeman, R-Cosby.

The governor's budget office has said the state needs an additional $220 million to fully fund public schools, a top priority of many lawmakers this session.

Budget officials estimated that tax-penalty amnesty might prompt the payment of $15 million.

"It almost defies estimates, so we tried to be very conservative," said Holden's budget director, Brian Long.

Rep. Meg Harding, D-Kansas City, added the tax amnesty plan to a bill that would allow people to negotiate with tax collectors over what they owe. The House passed the proposal by a voice vote. It needs a final vote before it can go to the Senate.

'A big fat zero'

Under the plan, delinquent taxpayers would be able to pay up without penalties during this coming August and September.

The measure would allow the Department of Revenue and the Administrative Hearing Committee to strike deals with taxpayers who might not be able to afford paying all of their late taxes, said Rep. Joan Bray, a co-sponsor of the bill.

Bray said delinquent taxpayers need an incentive.

"Right now we're are getting a big fat zero," she said. "If we get $100, that's something."

As of June 30, 2001 -- the end of the last fiscal year -- the state had $512 million in unpaid taxes. That doesn't include money owed in interest and penalties.