SUIT MAY DELAY REFUNDS; CONSERVATION TAX MONEY AT CENTER OF DISPUTE

A new lawsuit could delay tax refunds owed under the Hancock Amendment, Missouri's budget director said Friday.

Budget Director Mark Ward also said the lawsuit could reduce the amount of the refunds.

The Conservation Federation of Missouri and a dozen former members of the Missouri Conservation Commission filed a lawsuit against state officials in Cole County Circuit Court this week. Defendants include the Missouri Conservation Commission, Auditor Margaret Kelly and Treasurer Bob Holden, among others.

At issue is whether Missouri Conservation Department money can be used for tax refunds.

Plaintiffs contend that none of the money the Missouri Conservation Department receives from a voter-approved sales tax should be refunded.

About $6.1 million of that sales tax revenue was expected to be refunded as part of approximately $700 million in revenue that the state intends to refund to taxpayers to comply with the constitutional amendment. The Hancock Amendment limits state revenue.

The plaintiffs argue that money the department receives from the one-eighth-cent sales tax shouldn't be included in the state's calculation of general revenue.

They also don't believe any Conservation Department money, whether from the sales tax or other sources, should be spent on tax refunds.

Money budgeted for the Conservation Department should be spent solely for wildlife conservation, said the plaintiffs' attorney, Thomas A. Vetter of Jefferson City.

"We are not trying to stop or delay the income tax refund," Vetter said. "We are simply trying to prevent the use of Conservation Commission funds."

Vetter said, "We have not asked the court to take any action to block the refund."

The lawsuit is the latest in a series of legal obstacles for the Hancock Amendment, which took effect in 1980.

The Missouri Supreme Court last month ruled on two lawsuits, clearing the way for the state to refund the millions of dollars it collected in excess taxes in 1995, 1996 and 1997. The state had planned to begin mailing out refunds to 2 million taxpayers by the middle of next month, Ward said.

"We are going to do everything we can to make the refunds as fast as we can," Ward said. "At this point, there is no court order standing in the way of that." But the new lawsuit could change that situation, he said.

The average refund would amount to $177, state officials have said.

The first refund would amount to $101 on average. The second refund, averaging $76 per taxpayer, currently is scheduled to be mailed in late summer or early fall.

Political leaders, including Gov. Mel Carnahan, have expressed concern that the lawsuit could delay tax refunds.

State Rep. Joe Heckemeyer, D-Sikeston, said the Hancock Amendment doesn't clearly spell out the refund process.

Heckemeyer said lawmakers don't want to see another delay in the issuance of refunds.

"The bad thing is that it is frustrating people now because they want their money back," he said.

"I can't think of one politician in his or her right mind in an election year that doesn't want to give money back to the people," said Heckemeyer.

But he said the Legislature has no control over the courts. "We can't tell them what to do," he said.

State Rep. David Schwab, R-Jackson, agreed. Schwab said he hopes the refunds won't be held up by the latest litigation.

"I would hope we could go ahead and give the refund back. This is the people's money," said Schwab. "This is not the state's money."

Schwab said the continuing legal hurdles over tax refunds make it all the more important for the Legislature to pass major tax cuts.

The Jackson lawmaker said the state shouldn't have to depend on a refund system to comply with the Hancock Amendment.

"Hopefully, we can make enough tax cuts that we wouldn't have future refund problems," Schwab said.