Mehlville Fire District is Sued Over Tax Rate

The Mehlville Fire District has decided to change their name to Defendant.

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By Tony Messenger
ST. LOUIS POST-DISPATCH
02/09/2010

JEFFERSON CITY — A long-running dispute over a south St. Louis County fire district's ability to cut its local tax rate is heading to court again. And this time, the entire $10 million budget of the Mehlville Fire Protection District might be at risk.

Attorney General Chris Koster asked a St. Louis County Circuit Court judge on Monday to decide whether the fire district collected more taxes last year than state law allows.

The lawsuit, filed Monday, is believed to be the first of its kind in Missouri. Depending on how a judge rules, the district could end up having to pay back most of the revenue it collected in 2009, or voters from the district might be told that their 4-to-1 vote to lower its tax ceiling was an exercise in futility.

Either way, a district split by turmoil between the firefighters' union and its board finds itself in a familiar place: in court.
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At issue is the Mehlville Fire Protection District's vote last year — also a first — to lower its tax ceiling by 36 cents. The move was pushed by fire district board chairman Aaron Hilmer. Hilmer and other board members thought they were lowering their tax ceiling from about 74 cents per $100 of assessed valuation to about 38 cents. A tax ceiling is the highest amount of tax a board has the authority to collect.

The problem is that a new state law that had been backed by St. Louis County lawmakers says that in a reassessment year, such as 2009, the effective tax ceiling for a political subdivision is whatever tax rate was set the year before. That means that Mehlville voters unknowingly lowered the district's tax ceiling from about 37 cents per $100 in assessed valuation to about a penny in 2009. That would have allowed the district to collect only a fraction of its $10 million budget.

State Auditor Susan Montee first brought attention to the taxing discrepancy last October when she told the district she wouldn't certify their proposed tax rate. Montee later referred the matter to the attorney general's office, which ultimately agreed with the auditor's legal reasoning.

As a matter of course, the state auditor refers several political subdivisions each year to the attorney general's office for improperly setting a tax rate. But this appears to be the first time the attorney general has taken a taxing district to court over the issue, officials said.

When the issue arose last fall, Hilmer and his board met at the attorney general's office to discuss their options. Hilmer said that Koster's staff told him they didn't plan to seek legal action, so the district went ahead and set the tax rate. A spokeswoman for Koster disputes that the attorney general's office gave the district the go-ahead.

Either way, Hilmer said he doesn't believe the lawsuit will amount to much.

"It doesn't worry us," Hilmer said. "No one is going to say: 'You have to give the money back.'"

In his petition, Koster asks a judge to rule that last year's tax vote was unconstitutional because it tried to avoid other state law regulating the rollback of taxes in reassessment years. Koster said that state law takes precedence in a dispute over local ballot language.

If a judge were to agree with Koster and overturn last year's vote, then the district would still have enough taxing authority to have collected the amount of money it already has because the vote to lower the tax ceiling would be tossed out.

But there's no guarantee that a judge will overturn the wording of last year's ballot issue. A different circuit court judge already ruled the wording was constitutional after district resident Dennis Skelton sued last year to try to stop the tax decrease vote from ever taking place.

That ruling, however, dealt with the issue of whether the district had the authority to place the vote on the ballot. The judge did not address the wording on the ballot initiative that tries to get around state tax rollback law.

Skelton, a critic of Hilmer and the current board, said he believes that the district should ultimately have to refund the money that it took above whatever taxing authority it had by law.

Hilmer calls that sentiment "disingenuous."

"The same people who said 'you can't cut our taxes' are now saying 'you took too much money,'" Hilmer said.