Continued Confusion over Candidate Taxes

15 Apr

The issue of personal property tax payments of local political candidates has popped up again, this time in Crystal City. The day after the election (interesting timing), former councilwoman Debbie McKenna* told the mayor and city administrator, according to the Leader, that re-elected councilman Larry Rice should not have been on the ballot, since he hadn’t paid his 2012 personal property taxes (PPT). Rice later resigned, but he claimed this was due to a scheduling conflict with a new job.

This follows a case in Pevely, back in January, in which candidate JR Graham was removed from the ballot for non-payment of PPT. And of course there were the incidents in Arnold and the North Jefferson County Ambulance District (NJCAD) that I’ve written about.

But here is where a distinction arises. If you search on the JeffCo website for the personal property tax records of a random Arnold resident – say, Bill Moritz – you find this breakdown of the charges (click to enlarge):

arnold ppt bodies 2012

You can see that, next to the city of Arnold line item, it says 0.0%. Prior to 2012, this line item was not found on Arnold PPT bills (at least going back to 2008). This is consistent with Arnold finance director Deborah Lewis’ statement that Arnold gets no direct money from PPT payments (city attorney Bob Sweeney’s claim was that Arnold gets money from the Road and Bridge line item; maybe he should have talked to Lewis).

In Crystal City, however, you see this:

Crystal City PPT bodies

Crystal City PPT bodies

Crystal City does have a PPT line item. Pevely does as well:

Pevely PPT bodies

Pevely PPT bodies

Recall also that incumbent mayor and re-election candidate Susan Gibson from Byrnes Mill (also served by Bob Sweeney) paid her PPT late but was not removed from the ballot. Byrnes Mill gets PPT money:

Byrnes Mill PPT bodies

Byrnes Mill PPT bodies

Finally, recall that NJCAD candidate Ron Woehrle was removed from the ballot over PPT. NJCAD does get PPT money:

NJCAD PPT bodies

NJCAD PPT bodies

However, the circuit court ruled that Woehrle’s removal from the ballot was unlawful, and he was reinstated. The ruling noted that RSMo 115.305 (“This subchapter shall not apply to candidates for special district offices, township offices in township organization counties, or city, town and village offices…”) trumps RSMo 115.342 (“Any person who files as a candidate for election to a public office shall be disqualified from participation in the election for which the candidate has filed if such person is delinquent in the payment of any state income taxes, personal property taxes…”). This ruling would seem to indicate that it doesn’t matter if an entity has a PPT line item; it still can’t eliminate a candidate for non-payment of PPT. But then there’s this statute, RSMo 115.346:

Notwithstanding any other provisions of law to the contrary, no person shall be certified as a candidate for a municipal office, nor shall such person’s name appear on the ballot as a candidate for such office, who shall be in arrears for any unpaid city taxes or municipal user fees on the last day to file a declaration of candidacy for the office.

It appears to be the argument of some, according to the Leader (April 11 issue), that the city line item in the PPT counts as a “city tax.” Under this reasoning, a Crystal City, Pevely, or Byrnes Mill candidate who was late in paying PPT would be in violation of 115.346, but a late-paying Arnold candidate would not be. (At this point, I am surprised Arnold doesn’t levy PPT, and I hope I’m not giving the council there any ideas.)

What is not clear is the enforcement mechanism for 115.346. The PPT statute, 115.342, says that the MO Department of Revenue is the enforcing agency, and they will get involved if a complaint is filed. 115.346 does not say who or how it is to be enforced. Presumably, it is the city clerk. But as Crystal City administrator Jason Eisenbeis made clear, city policies on this matter can vary or be incomplete. In Arnold and Byrnes Mill, for example, enforcement depends on whether you are a crony or not. 

But here’s another wrinkle. The infamous memo (or, to Leader readers, the “I’ve never heard of that” memo) that Bob Sweeney circulated in 2011 (and repudiated in 2013) to justify keeping Randy Crisler and Bill Moritz on the ballot was written by a Kevin O’Keefe. I assume it is this person, “St. Louis Best Lawyers Municipal Law Lawyer of the Year” for 2012. The memo discusses 115.342 and 115.346. He never in the memo discusses the subject of municipalities that levy PPT (assuming Sweeney passed along the memo in full). This despite the fact that several St. Louis County municipalities also levy PPT (see page 8). This leads me to believe that he does not consider these PPT levies to be a municipal tax. This is a supportable position, because it is the counties that assess, bill, collect, and penalize non-payment of these taxes. The cities just sit back and accept their cut. Thus, one could legitimately call PPT a county tax, not a municipal one, even in the cases of Crystal City, Pevely, and Byrnes Mill.

I think it will require some litigation, legislative clarification, or an Attorney General opinion to clear this up (which is part of why I wish we’d seen legal challenges in Arnold or Pevely). Since cities usually seem to want to avoid lawsuits (Arnold being an occasional exception), it would seem that the prudent thing to do would be to not eliminate candidates for non-payment of PPT. Furthermore, since elections and the ballot are so integral to our democracy, in an ambiguous situation such as this, it is better to let the voters decide if they are willing to elect a candidate that is late on his/her PPT.

*McKenna also said in her letter that it was the clerk’s duty to determine that a potential candidate is not a felon. This is a clear reference to RSMo 115.350. I am confident that the 115.305 exemption also applies to this statute, and thus that McKenna is incorrect (also see O’Keefe memo above).

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