The road to court?

A financial tug of war between Jackson and Cape Girardeau County has city and county government officials from all over the state watching.

Although the state's attorney general's office has put its weight behind Jackson, the Cape Girardeau County Commission has dug its feet in on its own interpretation of the law.

In the center of the tugging is $80,000 in annual road and bridge funds.

The matter has one mid-Missouri county holding money from its towns until the matter is resolved. Other counties have reacted to the attorney general's opinion. And the whole issue hinges on the interpretation of one word: special.

As it stands now, Jackson residents pay property and real estate taxes that go into the county's road and bridge fund. And currently, all of that revenue goes to roads and bridges outside the city limits.

Several months ago, the Missouri Municipal League -- an organization established to look out for the interests of cities -- sent a memo to Jackson saying all counties were required by state law to pay back 25 percent of the revenue they collected from their cities.

In Cape Girardeau County, that would mean the city of Jackson would be owed about $80,000 this year for the purpose of maintaining roads inside Jackson.

The statute that the city of Jackson is leaning on says that first-class counties without a charter form of government, like Cape Girardeau, should spend at least 25 percent of the "county's special road and bridge tax" that is received from a city in the county.

The city sees the language as being clearly in its favor.

"I'm not a lawyer, but it doesn't seem that complicated to me," said city administrator Jim Roach.

But the county commission, acting upon the legal advice of its prosecutor, Morley Swingle, does not read the statute the same way that Jackson, the municipal league and many other counties do. And it's the phrase "special road and bridge tax" that gives the county its ammunition.

Defining 'special'

The county's opinion is that a "special road and bridge tax," and the 25 percent payback that goes with it, only applies to taxes that require a special election, which would be the case if the county wanted to collect more than 35 cents per $100 assessed valuation.

All three commissioners believe strongly enough in that premise that they have said Jackson will have to take them to court on the matter -- despite the recent opinion from the state attorney general that sided with Jackson.

It's not yet clear whether the city will take the county to court. City officials don't want to comment on the issue, other than to say they hope for a compromise.

Jackson city attorney Tom Ludwig sent a letter to the county commission this week, asking if he and Mayor Paul Sander could meet with Presiding Commissioner Gerald Jones to discuss the issue and work out a settlement. Jones said he thinks there will "probably be benefit" to meeting with the Jackson officials and said he will arrange a meeting with them soon.

While the county is firm in its belief, many other counties do not agree with the commission's stance.

Of the 14 first-class counties that do not have a charter form of government, only Callaway and Cape Girardeau counties do not share road and bridge revenue with the incorporated towns.

Callaway County, which became a first-class county as of Jan. 1 this year, is holding back money in an escrow account until Cape Girardeau County's matter is settled.

Cole County, where Jefferson City is located, teamed up with Jackson in requesting an opinion from the attorney general.

In 1997, Cole became a first-class county. In 2002, the county discovered the 25 percent payback statute, the result of an outside audit.

The county then began paying the incorporated towns 25 percent of their revenue back -- $450,000 annually for the state capital -- but Jefferson City officials wanted to collect back payments.

After the attorney general's ruling, the two sides agreed on a $1 million settlement to be paid at $100,000 per year for the next 10 years.

Buchanan, Cass, Camden, Greene, Platte, Boone, Franklin, Jefferson and Cole counties all reimburse their towns at least 25 percent of the road and bridge revenue collected from property and real estate taxes.

In fact, the county auditor of Cass County was writing out checks to towns and cities in that county on Thursday. Cass County was holding back the 25 percent reimbursements until it heard the attorney general's opinion, which came out last month.

Jasper, Boone and Taney counties pay for their county roads with sales tax, at least the county roads that aren't located in a special road district.

According to Bill Johnson, deputy director of the municipal league, the statute doesn't talk about sales taxes.

"Having said that, if you're going to collect sales taxes within a city for roads and bridges, it only makes sense that some of that should come back to the city," Johnson said.

Working together

Jan Blase, the city administrator for Forsyth, the county seat in Taney County, said the county government voluntarily works with the cities and some money goes to city roads.

Most of Jasper County's roads are contained in special road districts and the few that aren't are maintained with sales tax money.

In Boone County, the county government wanted to raise its sales tax to pay for the roads, but the commissioners knew the levy would need the support of the city's residents. So it promised Columbia that it would roll back the assessed valuation from 29 cents to 5 cents per $100 assessed valuation. In turn, it would give the cities 1.5 times what they would have collected were the 29-cent valuation still in place. The voters of Boone County passed the tax increase.

"We exceed the attorney general's opinion," said Skip Elkin, Boone County associate commissioner.

Clay County is different than the other first-class counties in that all of the cities are in special road districts. A different statute allows the county to collect the special road district money and keep 20 percent of it, while 80 percent goes back to the special districts. Jackson is not in a special road district, unlike Cape Girardeau, so that statute does not apply.

In Cape Girardeau County, Jackson paid $319,000 into the county road and bridge fund in 2002, or 22 percent of the county's $1.4 million road and bridge budget. None of that money came back to Jackson.

The city of Cape Girardeau and a large rural area outside the city do not pay into the county road and bridge fund. Instead, they pay taxes into the Cape Special Road District.

Aside from the meaning of "special" and the legal issues at hand is a broader issue of taxation without representation. Some Jackson residents say that if they're going to pay taxes, they want to see the results of those taxes in their town.

"If I'm going to pay taxes in the city of Jackson, I think the money should go to the city of Jackson," said Gary Fann.

Joe Kluesner, another Jackson resident, agreed.

"I'd just as soon see it come back to the city," he said. "The city could use it just as well as the county."

Commissioner Larry Bock would argue that county residents pay a half-cent transportation sales tax in Jackson. The city of Jackson budgeted for $1.3 million in transportation sales tax receipts for 2003.

Roy Davault, who lives near Gordonville, agrees with Bock.

"Jackson has a sales tax to support their roads," he said. "We pay their sales tax."

Kelsey Kelly, who also lives near Gordonville on a county road, said he didn't think it was fair for Jackson residents to pay for taxes and not reap the benefits. But he also knows the county needs the money.

"The county roads are in bad shape," he said. "Even if they have to raise taxes, they need to do something to take care of the roads."

Bock said $80,000 per year is the equivalent of two bridge replacements.

The city has a big motive to keep a solid relationship with the county. The city will need cooperation from the county in order to carry out its plans for the East Main Street extension to Interstate 55.

Should the issue go to court and should the county win, the ruling could have ramifications across the state.

"It's a big deal for the cities and the counties statewide," said Richard Sheets, a senior staff associate with the Missouri Municipal League.

But for those governments that already divide money, it's not such a big deal.

"For us, it wouldn't make a difference," said Platte County second district commissioner Steve Wegner. "Our concern is to make sure the money is spent on roads and it doesn't matter if it's in the city or in the unincorporated county. As long as it's going to roads in the county, that's what it's intended for."

bmiller@semissourian.com

243-6635