Opponents quickly appealed the ruling, which leaves lawmakers’ description of Amendment 5 intact as a June 9 ballot deadline approaches
BY: RUDI KELLER
Missouri Independent
A proposal to replace the state individual income tax with expanded or increased sales taxes will be on the Aug. 4 ballot and voters will see the description written by lawmakers, a Cole County judge ruled Monday afternoon.
The measure, the top legislative priority for Gov. Mike Kehoe, will appear on the ballot as Amendment 5. In his ruling, Circuit Judge Christopher Limbaugh rejected claims from opponents that lawmakers violated limits on constitutional amendments and it was improper to put it to a vote.
An appeal was quickly filed Monday evening.
Amendment 5 is sure to be one of the most expensive ballot campaigns this summer. It has already drawn nearly $2 million in donations to promote it from a not-for-profit called Missouri Promise, while two campaigns are organizing against it, one called Missourians for Fair Taxation, led by the Missouri Association of Realtors to organize business opposition, and another called No Everything Tax, which is organizing opposition from the left.
If approved by voters, lawmakers would be directed to establish revenue triggers for reducing the top state income tax rate, which is currently 4.7% for taxable incomes greater than about $9,200. It would grant lawmakers five years to change what is covered by sales tax or increase the rate to generate revenue to speed the elimination of the income tax.
The revenue triggers are not specified. If no additional transactions become subject to the sales tax, the current rate of 3% would have to increase to as much as 11.5% to replace the money generated by income tax.
In their challenge to Amendment 5, opponents argued it violated the Missouri Constitution’s requirements that proposed amendments change only a single article and limit the changes to those within a single subject.
During arguments on Friday, Chuck Hatfield, attorney for the plaintiffs, said the proposal’s use of the word “notwithstanding” to override provisions in other articles violated the first rule. By dealing with both sales and income tax, as well as making directives on local taxes, he told Limbaugh, it violated the second.
Limbaugh was unconvinced.
He could not, he wrote, identify any section of the Constitution that the proposal impermissibly altered.
“The court has considered each of petitioner’s article-by-article objections and finds each unpersuasive,” Limbaugh wrote.
The proposal doesn’t violate the single subject requirement either, he wrote. Each of the provisions, such as new duties for the state auditor or the expansion of sales tax, Limbaugh wrote, fit into “the elimination of the state individual income tax through a coordinated restructuring of state and local taxation.”
The ballot language discussion in Limbaugh’s ruling is brief. The legal standard is for the language to be unbiased and sufficient, “not whether the summary drafted is the best summary,” Limbaugh wrote.
The language written by the General Assembly, along with the “fair ballot” summary written by the secretary of state’s office, meet the standard, Limbaugh wrote.
In court Friday, attorneys said they expect appeals arguments late this week.
The legal questions about the ballot measure must be settled by June 9.
The appeal seeks to overturn both the decision that it is written within constitutional standards and that the language is fair.
“Lawmakers failed to tell voters the truth about Amendment 5 – it would mean the largest expansion of sales taxes in Missouri history, while giving lawmakers a license to ignore current constitutional taxpayer protections, including the citizens’ right to vote on big tax increases,” Hatfield said.
The ruling allows “voters to decide the future of tax policy in our state,” Attorney General Catherine Hanaway said in a statement Monday afternoon.
“Liberal activists brought this lawsuit to block Missourians from voting on whether to eliminate the state income tax,” she said. “Judge Limbaugh rightly rejected that challenge.”