While the Kansas City Chiefs are leaving Missouri and won’t use the incentives lawmakers created for them last summer, the question of whether other tax credits and property tax caps included in the legislation will be used by anyone remains undecided.
Cole County Circuit Judge Christopher Limbaugh after a hearing on Wednesday promised he would rule by Feb. 10 on whether to issue a preliminary injunction to block elections on property tax caps that must be held in April in 97 counties.
A second hearing in the case, originally filed by two taxpayers, six school districts and a fire district, will be held next week as attorneys for the plaintiffs seek a summary judgment in their favor.
And in a Jan. 16 decision certain to be appealed, Limbaugh denied standing — the right to sue — and dismissed a case brought by two lawmakers and a conservative activist arguing the wide-ranging legislation violated procedural rules for passing bills.
The bill approved by lawmakers in a June special session offered up to $1.5 billion in incentives to keep the Kansas City Chiefs and Royals in Missouri. It also expanded a program of tax credits as an incentive for major amateur sports competitions, offered tax credits for disaster relief and set the property tax caps in 97 of the state’s 114 counties.
In 75 counties, voter approval would limit future increases in tax property tax bills to 5% or the rate of inflation, whichever is greater. For 22 counties, voter approval would mean individual property tax bills could not increase.
The tax base would be reset when a property changes hands. The caps allow tax bills to increase when a new or increased tax is approved by voters.
Feb. 10 is a key date because that is when April ballots must be certified by local election authorities. Twenty-seven counties joined the lawsuit after it was filed, arguing that the cost of the election is an unfunded mandate that violates the Missouri Constitution.
Attorney Jim Layton, who represents several of the original plaintiffs, said Limbaugh must decide whether the property tax caps are improperly passed special laws or violate constitutional provisions requiring uniformity in taxation and equal rights.
Lawmakers opted their counties into the legislation during a late-night floor session, deciding what level of relief they wanted for their area. Many of the state’s largest counties were excluded, leaving Boone, Greene, Jackson, St. Louis County and the city of St. Louis out of the law.
“There’s no rational basis for the lines that it drew, or for designating some counties, particular counties, as 0% or 5% or unaffected counties,” Layton said in an interview with The Independent.
The state is defending the law by saying it will provide cover to local assessors who have been reluctant to bring property values up to the current market because of its impact on tax bills, Layton said.
Neither the original plaintiffs nor the intervening counties challenging the tax caps are asking Limbaugh to throw out the entire law. That was the goal of the lawsuit that was dismissed Jan. 16, filed by state Sen. Mike Moon, R-Ash Grove, and state Rep. Bryant Wolfin, R-Ste. Genevieve, and Ron Calzone, a conservative activist who has challenged several laws for violating procedural rules in the Missouri Constitution.
Moon and Wolfin “claim that they have legislative standing to challenge (the law, but) this court is unaware of any Missouri statute or case law conferring such standing upon petitioners Moon and Wolfin,” Limbaugh wrote.
Calzone, who claimed standing as a taxpayer who would be damaged by having public funds spent, failed in that argument, Limbaugh wrote. Tax credits to promote major amateur sporting events are not a “direct expenditure to be made by the state,” and payments for bonds on stadiums are subject to appropriation, which means they are not automatic.
“There is no ‘direct expenditure of funds generated through taxation’ that could confer taxpayer standing,” Limbaugh wrote.
Calzone, in an interview, said Limbaugh made a mistake because the tax credits for amateur sporting events are refundable — meaning the state will write a check if the credits exceed what the taxpayer owes the state.
The ruling also cited an incorrect version of the law on amateur sporting event tax credits, he said. The section cited is the one that existed, with lower credit amounts, before the special session law was enacted.
The options for the plaintiffs are to ask Limbaugh to reconsider based on what they believe are errors in the decision or take the case to higher courts on appeal, Calzone said.
“That is something we are still trying to determine,” he said. “But absolutely, one way or another, we will end up in the Missouri Supreme Court.”
This was first published by the Missouri Independent, a nonprofit, nonpartisan news organization covering state government, politics and policy, and is reprinted with permission.