Opinion ID: 2332327
Heading Depth: 1
Heading Rank: 6

Heading: Hancock Amendment Claims

Text: The City argues that the trial court erred in entering judgment in favor of the PRS and the FRS because requiring the City to pay the entire amounts certified violates Missouri's Hancock Amendment. [4] In relevant part, the Hancock Amendment states: The state is hereby prohibited from reducing the state financed proportion of the costs of any existing activity or service required of counties or other political subdivisions. A new activity or service or an increase in the level of any activity or service beyond that required by existing law shall not be required by the [G]eneral [A]ssembly or any state agency of counties or other political subdivisions, unless a state appropriation is made and disbursed to pay the county or other political subdivision for any increased costs. Mo. Const. art. X, section 21. Mo. Const. art. X, section 21 prevents the State from requiring local governments to begin a new mandated activity, or to increase the level of a previously mandated activity beyond its 1980-1981 level, without appropriation of sufficient state monies to finance the costs of the new or increased activity. Fort Zumwalt Sch. Dist. v. State, 896 S.W.2d 918, 921 (Mo. banc 1995). This portion of the Hancock Amendment is violated if both (1) the State requires a new or increased activity or service of a political subdivision and (2) the political subdivision experiences increased costs in performing that activity or service without funding from the State. Miller v. Dir. of Revenue, 719 S.W.2d 787, 788-89 (Mo. banc 1986). The City argues that the Hancock Amendment is violated if the City is required to pay the entire amounts certified by the PRS and the FRS for the years at issue because those amounts exceed the amount the City paid in 1981. [5] This argument fails because despite the fact that the dollar amounts certified for the City to contribute to the PRS and the FRS are greater than the dollar amounts certified for the 1980-1981 fiscal year, the City's requirements to pay are unchangedthe City is still required to pay the entire amounts certified by the PRS and the FRS boards of trustees. There is no new or increased activity. The Hancock Amendment is aimed at limiting taxes by controlling and limiting governmental revenue and expenditure increases. See Boone County Court v. State of Mo., 631 S.W.2d 321, 325 (Mo. banc 1982). [6] The amendment's official ballot title stated that it prohibited state expansion of local responsibility without state funding. Id. The increased cost of funding the PRS and the FRS is not an expansion of the City's long-existing responsibility. The City has been required to fund the PRS and the FRS pursuant to an actuarial formula that has not changed since Hancock's adoption in 1981. The City does not challenge the actuarial formula used to calculate the City's payments. Inevitably, the amount required by the formula fluctuates, yielding varying dollar figures at any given actuarial assessment as more police and firemen are employed, as more retire, as wages are altered, and as a function of inflation. Hancock's mission to control taxes is not thwarted if the actuarial formula yields increased certified amounts payable to the PRS and the FRS. The change in the certified amount derived from the actuarial calculations is not the measure of whether Hancock is violated. The question is whether the City has been mandated to bear new responsibilities in relation to this activity. It has not. The City argues that State ex rel. Sayad v. Zych, 642 S.W.2d 907, [7] controls the PRS and the FRS cases. Zych is distinguishable insofar as the arguments in Zych focused on the actual dollar amount appropriated in 1980-1981. [8] In the PRS and the FRS cases, the focus is not on whether the dollar amounts requested of the City have increased, but rather on whether there has been any alteration to the long-used actuarial formula that produces the dollar amounts at issue. Where there is no mandate that the City take on a new responsibility, but only a continued responsibility for it to fund an existing activity according to a previously-existing formula, there is no Hancock violation. See State ex rel. Pub. Defender Comm'n v. County Court of Greene County, 667 S.W.2d 409, 414 (Mo. banc 1984) (finding there was no new or increased activity in violation of Hancock where the county's existing statutory obligation was not changed by the challenged action).