ANOTHER SUIT SEEKS TO DEFINE HANCOCK LIMITS

Yet another in a long line of lawsuits is in the offing concerning Missouri's much-litigated Hancock Amendment. This is the tax-limitation amendment that provides that if state revenue grows faster than personal income in a given year, refunds are owing to income-taxpayers.

The Missouri Chamber of Commerce and the Missouri Merchants and Manufacturing Association plan to sue state officials to force a change in the way they calculate the refunds. The two groups are asking a judge to certify the case as a class-action in order to represent all Missouri taxpayers. The suit arises out of the controversy over the one-eighth-cent sales tax voters approved in 1976 to fund Department of Conservation programs. The Missouri Supreme Court ruled that because voters had approved the tax, it needn't be counted as total state revenue for Hancock Amendment purposes.

The plaintiffs make two arguments. Chamber officials contend that the state didn't take the conservation money out of the base-year revenue figure used to calculate refunds for 1995, 1996 and 1997. Instead, says chamber president Dan Mehan, the state took those funds out to calculate the taxpayers' refunds only for 1998. So they argue that the formula must be recalculated and additional money refunded for income taxpayers. At stake, they argue, would be $132 million for years 1995 through 1998. Refunds should include another $95 million for 1999 and 2000, they allege.

The second argument presented by the suit concerns tax credits. Since the Hancock Amendment was passed in 1980, many tax credits have been added to the statute books. The plaintiffs argue that these credits prevent money from flowing into the formula used to pay refunds. "The Department of Revenue has calculated the refunds based on the amount of tax paid after credits," said Mehan. "We believe taxpayers shouldn't be punished for properly using tax credits and that their entire tax liability should be used to compute their refund." They are saying the state is artificially reducing the revenue figure on which refunds are based.

Whether these arguments will prevail in court can't be foreseen. What Missourians can do, during this holiday season is be thankful for the vision of a former congressman from Springfield, Mel Hancock, who in 1980 was a private citizen. It was Hancock who took the lead in passing the amendment that bears his name and spearheaded it to passage. You have money back, and state government grows slightly less rapidly because of his splendid efforts. Thanks, Mel.