Citing retroactivity, Dooley comes out against override of vehicle tax bill
This article first appeared in the St. Louis Beacon, Sept. 11, 2012 - In less than a day, Missouri lawmakers will take up vehicle tax legislation that could have a profound impact on local government coffers.
But after expressing concern about vehicle owners getting an after-the-fact tax bill, St. Louis County Executive Charlie Dooley says state legislators should hold off on overriding Gov. Jay Nixon’s veto on the measure.
The General Assembly will convene Wednesday at noon for its annual veto session. And many are closely watching a bill abrogating a Missouri Supreme Court decision that tossed out local taxes on vehicles purchased out-of-state unless a jurisdictions had voted for such a tax.
Gov. Jay Nixon vetoed the bill earlier this year and has made several public showcases about how an override would result in tax bills for over 120,000 people who purchased a vehicle out of state or through a person-to-person transaction. But local governments and vehicle dealers are pushing for an override, arguing inaction would hurt their bottom lines.
Dooley said in an interview on Tuesday that Nixon’s contention about the bill’s retroactive nature should compel legislators to vote to sustain the governor’s objection. And like other political figures – including Lt. Gov. Peter Kinder and state Sen. Rob Schaaf, R-St. Joseph – Dooley said he was concerned that a successful override could prompt a lawsuit.
The legislation at hand will affect St. Louis County, because many counties and municipalities before the Supreme Court decision placed taxes on out-of-state or private vehicle sales under the sales tax umbrella. The state Supreme Court struck down that process, but the decision added that jurisdictions could utilize voter-approved “use taxes” on those aforementioned purchases.
Use taxes can apply to purchases by county or city residents made out of state. Unlike St. Louis City and St. Charles County, St. Louis County does not have a use tax.
St. Louis County residents voted down a use tax ballot initiative in 2008 by a 55.4-44.6 margin. And Dooley said another vote on the use tax is “not on the horizon.”
One hypothetical possibility, Dooley said, is for the governor to call a special session on a different piece of legislation. Lawmakers cannot amend legislation that's being considered during a veto override.
Municipal league on watch
Municipalities are also watching the veto session closely, mainly because numerous towns and cities haven't implemented a use tax.
Tim Fischesser, executive director of the St. Louis County Municipal League, said in a telephone interview that “hundreds” of municipalities across the state would have to put forward ballot items to recoup revenue without an override.
“The governor seems to think it should stay under the use tax umbrella and everybody should vote on the use taxes,” Fischesser said. “But obviously those are going to pass some places and fail other places. So you’re going to have places that do tax the vehicles and places that don’t tax the vehicles, which would incentivize those shoppers to go buy a vehicle out of state and cause those dealers to lose those sales.”
Fischesser said his group would be in favor of a “tax holiday” for people who bought a vehicle during the time period between when the Supreme Court decision went into effect and the date of a hypothetical override. Rep. Ryan Silvey - a Clay County Republican who handled the bill in the House - said last week that the governor could hold off on sending the tax due notices and the legislature could pass a bill next year implementing an amnesty.
“We understand that dilemma and we would support a ‘tax holiday’ for those folks,” Fischesser said. “I don’t think the governor has to be that draconian about it. It’s up to the executive branch how they want to handle that, but we would certainly support not going back and collecting it from the people who paid what they were due.”
Some opponents of the override – including former state Rep. Carl Bearden, R-St. Charles – have argued that local jurisdictions had several opportunities to ask voters for a local use tax since the Supreme Court decision.
Bearden – the executive director of United for Missouri and a former St. Charles County councilman – noted in a recent blog post that “local government elected officials who didn’t ask have failed in their duties and have absolutely no right to complain about any lost revenues or to blame anyone but themselves!”
“Counties and cities should show the necessary leadership and courage to ask their local taxpayers whether or not they want to have a local use tax,” Bearden wrote. “Some are doing so but many more are not. This is a vast failure of leadership.”
Nixon's office pointed out a recent news release that several jurisdictions recently rejected a use tax, perhaps indicating that overriding the veto would go against their will.
Pins and needles
In any case, it's open question on whether the bill will be overturned. Some conservative and Democratic lawmakers have indicated they may side with the governor. And it’s not uncommon for Democrats to go against overriding a veto from a governor of their own party.
One indication of the pressure over the bill: The Kansas City Star reported recently that a group funded by the Democratic Governor's Association was sending out mailers targeting lawmakers, including state Rep. Genise Monticello, D-St. Louis.
But pressure from municipalities and counties could be a compelling factor for lawmakers. The Columbia Tribune reported earlier that a unanimous vote from the Columbia City Council was a compelling factor toward a Democratic legislator override Nixon’s veto.