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Lobbyist Money Help  

Taxpayers could get $244 million refund

November 15, 2000
By: Katy Scott
State Capital Bureau

JEFFERSON CITY - Missouri taxpayers would get almost a quarter of a billion dollars in overdue tax refunds under a ruling issued by a Cole County Circuit Court judge Wednesday.

Judge Thomas Brown ordered the state to pay $244,691,751 to income taxpayers for overdue refunds from 1995 through 1999. According to the ruling, the state misread the law, specifically the Hancock Amendment of 1980. This amendment put a cap on the amount of revenue the state could collect in a given year. Any money over that cap was to be refunded to taxpayers. In calculating the cap, the state did not include a voter-approved tax that was amended on the same day the Hancock Amendment was passed as a source of revenue. This led to miscalculations of tax refunds from 1995 through 1999.

Several Missouri businesses, including the Missouri Chamber of Commerce, brought the case to court. Dan Mehan, president of the organization, said although he is not certain whether the ruling will stand, he is pleased with it.

"For the average taxpayer of Missouri, this means that he or she will be getting another check from the state of Missouri," he said. "They deserve it. It's their money, and we're happy with the ruling today."

However, the ruling leaves several questions for the state to deal with. If Missouri is forced to pay $244 million, it will lose about 3 percent of its $7 billion budget. That loss could cause several state programs to suffer.

But Mehan said he thinks the budget is strong enough to withstand a $244 million cut with few problems.

"We've operated on a solid budget for the last several years, and it should not have an adverse effect on any state program," he said.

Although Judge Brown ruled in favor of the plaintiffs, he also rejected some of their arguments, including a plea for another $284 million in overdue refunds. Mary Still, director of communications for the attorney general's office, said because neither party won all of their arguments, she expects both sides will appeal the ruling.

"It is the goal of the state to establish the correct calculation of total state revenue," she said. "To do that, more than one judge will have to look at the case."