New: Fire District's 2009 Tax Rate Did Not Violate State Law, Court Rules

MIKE ANTHONY

Executive Editor - Call Newspapers

July 20, 2011 - The Mehlville Fire Protection District's 2009 tax rate did not violate state law, a St. Louis County Circuit Court judge ruled this week.

Attorney General Chris Koster filed the lawsuit against the fire district in February 2010 that asked the circuit court to determine the fire district's 2009 tax rate.

Associate Circuit Judge Patrick Clifford ruled Tuesday the fire district's 2009 tax rate did not violate state law. Clifford's judgment came after the attorney general's office and the fire district's attorney in March signed a stipulation of facts stating they would submit a proposed order to the judge "finding that tax bills issued by Mehlville in 2009 did not exceed what would have been its properly calculated tax ceiling.''

The stipulation of facts agreement was signed by Ronald Holliger, general counsel for Koster's office, and Mathew Hoffman, legal counsel for the fire district.

As first reported by the Call in November 2009, then-Missouri Auditor Susan Montee's office deemed the fire district's 2009 tax rate to be higher than permitted under state law and referred the issue to Koster for further action.

In mid-November 2009, MFPD officials met with representatives of Koster's office and said they were informed the attorney general had no plans to pursue any legal action against the district.

The county collector of revenue levied the tax rate approved by the fire district Board of Directors.

But in late January 2010, Montee released a report citing 12 taxing entities, including the Mehlville Fire Protection District, that levied tax rates in excess of what was permitted by law.

Montee's report stated the fire district had levied nearly $10 million more than the amount legally allowed with its tax rate. In February 2010, Koster filed the lawsuit against the fire district.

At issue was the board's decision in August 2009 to set the district's tax rate at 59.3 cents per $100 of assessed valuation, an amount it contended was the legal maximum it could levy as a result of the passage in April 2009 of two propositions reducing Mehlville's tax-rate ceiling by 40 cents.

The 2009 tax rate was 3 cents more than the previous year's tax rate of 56.3 cents, and board members voted to roll up the tax rate to collect the same amount of revenue as the previous year under the provisions of the Hancock Amendment.

However, Montee contended that because the board voted in August 2008 to levy a tax rate less than the district's tax-rate ceiling of $1.052, Mehlville's ceiling was reduced to 56.3 cents under Section 137.073.5 of Senate Bill 711. Under SB 711, a tax rate set in a nonreassessment year becomes the tax-rate ceiling in a reassessment year.

As a result, the tax-rate-ceiling reduction of 40 cents approved by voters as Proposition 1 and Proposition 2 in April 2009 set the district's tax-rate ceiling at 16.3 cents, according to Montee.

Proposition 1 asked whether the district's general-fund tax-rate ceiling should be permanently reduced by 36 cents per $100 of assessed of valuation while Proposition 2 asked whether the district's pension-fund tax-rate ceiling should be permanently reduced by 4 cents per $100.

The ballot language for both propositions included the phrase: "This proposition is based upon the 2008 assessed valuation for the district. The foregoing shall not be subject to any tax-rate-reduction rollback.''

The judgment states, "On April 7, 2009, district voters approved two ballot measures which purported to avoid the effect of tax rate reductions required by Section 137.073.5 in reassessment years and voluntarily reduced its levies based on no reassessment rollback.

"Political subdivisions are required to apply state law as expressed in Section 137.073,'' the judgment states. "In attempting to calculate the proper rate, the auditor utilized the voluntary rollback reductions but disregarded the ballot's italicized language which would not subject the calculation to any rollback based on the 2008 reassessment.

"Political subdivisions do not have the legal authority to apply rollbacks in a year when reassessment is done,'' according to the judgment.

"If the district's general and pension levy is calculated without the voluntary levy rollbacks and applying the rollback provisions of 137.037.5, the district's proposed tax levy for general and pension purposes did not exceed its tax rate ceiling. Therefore, judgment is entered declaring that the district's propose levy for 2009 did not violate state law. Each party is to bear their own costs,'' the judgment states.

In September, Montee's office certified the fire district's 2010 tax rates.

The district's Board of Directors voted Sept. 24 to approve a resolution setting the district's 2010 blended tax rate at 67.1 cents per $100 of assessed valuation. The blended tax rate is not assessed, but is a combination of four tax rates — residential property, commercial property, agricultural property and personal property.

The blended tax rate of 67.1 cents per $100 is 7.8 cents more than the previous tax rate of 59.3 cents per $100. The 2010 tax rate is the maximum that can be levied by the district.

Certification letters dated Sept. 30 for the fire district's four tax levies — general, ambulance, alarm and pension — were sent by Montee's office to the county collector of revenue. By fund, the blended rates are: general, 39.5 cents; ambulance, 19.5 cents; alarm, 4.3 cents; and pension, 3.8 cents.

Montee was defeated in her re-election bid last November by current Missouri Auditor Tom Schweich.