Taxpayers' lawsuit puts schools on trial

JEFFERSON CITY, Mo. -- In 1998, Missouri voters changed the state constitution to allow local school boards to raise property tax levies in certain situations without voter approval.

But in a case the Missouri Supreme Court will hear Sept. 4, a group of Morgan County taxpayers claim the provision conflicts with the constitution's revenue-limiting Hancock Amendment.

If the court follows the taxpayers' interpretation, it could call into question the levies of at least 111 school districts, including 22 in Southeast Missouri, that relied on the 1998 provision to bypass voters and raise a combined $27.7 million in taxes.

The case has prompted friend-of-the-court briefs from business interests that support the taxpayers and education groups that fear the financial losses impacted districts could suffer if their levies are found invalid.

Constitutional Amendment 2, as it was known, gave school boards the power to unilaterally set levies as high as $2.75 per $100 assessed valuation -- the amount needed to qualify for full funding from the state. Voters ratified the provision with 58.8 percent support.

The 1980 Hancock Amendment, however, sets a limit on how much additional revenue taxing entities, including school districts, can raise without voter approval.

Laws in conflict

Craig Johnson of Jefferson City, the attorney for the taxpayers, said the authority to raise rates granted by Amendment 2 doesn't repeal the Hancock Amendment's revenue cap.

"Hancock says that if a school district wants to collect more revenue than the lid allows, it has to get voter approval," Johnson said. "There is nothing in Amendment 2 that says it would take away that lid."

But Alex Bartlett of Jefferson City, the attorney for the Morgan County School District and the other defendants, said that argument would render Amendment 2 meaningless.

"If it doesn't trump Hancock, there was no reason to pass it," Bartlett said. "When you get to the bottom line, it has got to mean something."

Morgan County Circuit Court Judge Mary Dickerson dismissed the case, finding the district acted within its authority. The Missouri Court of Appeals Western District in Kansas City largely disagreed with Dickerson's reasoning but made no ruling on the merits of the taxpayers' claims.

The state's Supreme Court is being asked to reconcile the alleged conflicts between the constitutional provisions.

The taxpayers contend districts are obligated to follow both sections and should receive voter approval if boosting their levies to $2.75 busts the Hancock revenue cap. However, Bartlett argues passage of Amendment 2 itself provided the voter approval needed to satisfy Hancock.

In a written argument filed with the court, Associated Industries of Missouri and the state Chamber of Commerce said ignoring Hancock gives districts a financial windfall at taxpayer expense.

"If the trial court's determination were affirmed, school districts throughout the state would be allowed to evade the requirements of the Hancock Amendment and impose substantial additional taxes upon" property owners, the business organizations claim.

The Poplar Bluff, Kennett, Kelly, Charleston and Dexter school districts are among the nearly two dozen Southeast Missouri schools that have taken advantage of Amendment 2, according to a state auditor's report.

The Missouri Council of School Administrators and Missouri School Boards Association have urged the court, if it can't reconcile the two sections, to give extra weight to Amendment 2 since it was more recently adopted.

"Voters relinquished the right to vote on levy increases up to the $2.75 limit when they amended (the constitution) in 1998," the groups said. "Appellants claims to the contrary must fail."

The case is Thomas Thompson, et al, v. Clark Hunter, et al.

mpowers@semissourian.com

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