Opinion ID: 1355183
Heading Depth: 2
Heading Rank: 3

Heading: Estimated excess taxes collected

Text: Taxpayers argue that the undisputed evidence established that the tax levy would produce substantially more revenue than budgeted. School District's 2001-2002 budget declared needs of $56,232,505 in local tax revenues. The total assessed valuation of the taxable property in School District was $1,281,852,353. The tax rate set by School District was $4.7544 per $100 assessed valuation. [14] Assuming a collection rate of 100 percent, the rate set would produce revenues of approximately $60,944,388, or $4,711,883 (7.73 percent) more than the budgeted figure for local tax revenues. School District, however, formulated its budget with the assumption that its tax collection rate would be only 94 percent, which lowered local property tax revenues to $57,287,725, or only $1,055,220 (1.88 percent) more than budgeted. Taxpayers' arguments to this Court use calculations based on a 100 percent collection rate, yielding an excess taxes figure of $4,711,883 (7.73 percent) more than budgeted. Collector and School District, however, challenge Taxpayers' use of the 100 percent collection calculations. They correctly argue that Taxpayers are barred by Rule 83.08(b) from presenting a new argument based on the 100 percent collection rate to this Court because Taxpayers used School District's 94 percent collection rate in their arguments to the trial and appellate courts. Taxpayers' amended petition used calculations based on School District's assumption that 6 percent of the 2001 billed property taxes would be uncollectible. Taxpayers argued: Utilizing the School's budget figure, the total assessed valuation figure, and the six percent uncollectible rate, complying with [section] 67.110 RSMo, and complying with [section] 137.073.6 RSMo requiring the tax rate to be expressed equal to the nearest 1/100th of a cent, [15] the correct levy rate to produce the same amount of revenue called for in the budget would be $4.6668 per $100.00 of assessed valuation of property. (emphasis added). Taxpayers' amended petition argued that the tax levy violated section 67.110.2 in that it would produce $57,287,725, or $1,055,220 (1.88 percent) more than the local property tax need of $56,232,505 declared in School District's budget. Taxpayers' amended petition sought a refund based on the 94 percent collection calculation of $1,055,220 in excess revenues. Like Taxpayers' amended petition, their arguments to the court of appeals were based on a 94 percent collection rate and asserted that School District's levy rate produced excess revenues of $1,055,220. School District argues that this Court should evaluate Taxpayers' claims based on calculations using the 94 percent collection rate, or the $1,055,220 excess revenue calculation. School District argues that Rule 83.08(b) prohibits Taxpayers from arguing that School District collected $4,711,883 excess taxes because they cannot alter the basis for their claims on appeal. Rule 83.08(b) provides in relevant part: A party may file a substitute brief in this Court ... [which] shall include all claims the party desires this Court to review, [but] shall not alter the basis of any claim that was raised in the court of appeals brief. The record on appeal and Taxpayers' brief at the court of appeals do not reflect that Taxpayers challenged School District's use of the 94 percent collection rate in its budget process or in its levy determinations. In the trial court and the court of appeals, Taxpayers claimed that the $57,287,725 in revenue produced by the levy was not substantially the same as the $56,232,505 budgeted by School District such that the levy violated section 67.110.2, thereby triggering a refund under section 139.031.5. In contrast, they ask this Court to determine whether the revenue produced was substantially the same by weighing a figure that is $3,656,663 more than the original challenged difference. Taxpayers argue that they have altered their first point only with respect to the tax rate and revenue amounts driven by the uncollectible issue. This alteration, however, is significant in the analysis of whether the collected revenue and the budgeted revenue figures are substantially the same pursuant to section 67.110.2. This calculation is central to the determination of the issues presented in this case. Taxpayers' alteration of the challenged amount has altered the basis for their claim in violation of Rule 83.08(b). Despite the violation of Rule 83.08(b), this Court finds that the use of the 94 percent collectible figure does not violate existing case law in that School District presented evidentiary support for the use of that collection rate. In Southwestern Bell Telephone Co. v. Feuerstein, 529 S.W.2d 371 (Mo.1975), this Court was asked to determine whether the trial court had erred in ordering a refund to certain taxpayers from their school district, pursuant to section 137.073, RSMo 1969. 529 S.W.2d at 372. That statute required a reduction in the local tax rate levied by the district based on certain instances of increases in assessed valuation of real or personal property. Id. at 373. This Court resolved the issue in favor of the taxpayers and affirmed the trial court's judgment, ordering a reduction in the district's levy. Id. at 374. This Court also addressed the district's argument that the reduction ordered by the trial court was incorrect in that it was based on a 100 percent collection rate of the levy, rather than the lesser collection rate employed by the district. Id. In ruling against the district on that issue, this Court stated: [T]here is no statutory authority which allows a school district to estimate and assume a rate of collection and state their needs on that basis. Id. In addition to pointing out the lack of statutory authority for using a collection rate other than 100 percent, this Court also noted the lack of any evidentiary support for the district's use of the lesser rate. Id. In this case, however, there was evidentiary support for School District's use of a 94 percent collection rate in calculating its 2001-2002 budget. Treasurer testified at trial that School District calculates the collection rate by taking the total current taxes [to be distributed to School District that year] and dividing by the taxes levied. He further testified that the 6 percent uncollectible rate includes the 1.5 percent fee that School District pays the county collector and the county assessor from its tax revenue. The 2001-2002 budget included a schedule of School District's collection rates for the budget years 1993 to 2001, and then listed the projected 2002 collection rate as 94 percent. This collection rate schedule also shows School District's five-year average collection rate was 94.62 percent and its three-year average was 94.02 percent. Given that School District does not lack evidentiary support for its use of the 94 percent collection rate, Feuerstein does not dictate that School District's use of the 94 percent collection rate was improper. This case is properly analyzed by using the calculations based on a 94 percent collection rate, which reflect that School District collected $1,055,220 more taxes than its declared needs.