Should Mission residents get refunds from an illegal driveway tax? It’s complicated

The people of Mission face an interesting and potentially expensive problem.

Seven years ago, the Mission City Council passed what it rather grandly called a transportation utility fee. The idea was to try to calculate the number of “trips” generated by a property in the city, then impose a tax on the owner of the property based on that estimated use.

The city wanted the money for road and sidewalk repairs. It thought a user fee would be a good way to raise the funds.

No one saw it as a user fee. Everyone called it a driveway tax.

It wasn’t very popular. The formula was confusing — a gas station with a car wash faced higher taxes than a gas station without one.

Business owners didn’t like it. The public seemed befuddled. Talk show hosts howled.

This being America, the driveway tax soon ended up in court. A Kansas judge approved it, but an appeals court threw it out. Finally, last April, the Kansas Supreme Court settled the matter: The driveway tax was illegal.

Usually, that would be the end of the story. Mission actually stopped collecting the driveway tax a few years ago, in part because city officials were worried about the courts, in part because some council members thought it was a bad idea.

So the court’s decision didn’t blow a hole in the budget.

Not yet, anyway.

As it turns out, the plaintiffs in the case want a refund for the driveway taxes they did pay for about five years. They’re arguing their case in Johnson County District Court.

The case isn’t a class action, so any refunds would go to the plaintiffs, not the general public. If the court orders refunds, though, other Mission residents could seek their own driveway cash as well.

And that would be some serious money. The tax raised about $800,000 in 2013; multiply that by five years, and it’s $4 million. That’s the bill Mission might face if everyone who paid the tax sought a refund and got one in the same year.

Mission’s 2017 general fund is about $11.6 million. Perhaps you can see the problem.

But it gets even more complicated because Mission would almost certainly have to raise taxes to pay the refunds. So driveway taxpayers who wanted their money back would essentially have to pay more money from one pocket to put their refund money in the other.

Mission Mayor Steve Schowengerdt said his city is aware of the issue. He didn’t want to say too much more because the refund request is in court.

In any case, the driveway tax money isn’t sitting in the bank. It was spent on better streets and sidewalks. Can’t really tear up the asphalt.

The plaintiffs’ lawyer said his clients — the Heartland Apartment Association and others — believe they’re entitled to a refund of an illegal tax. And it’s difficult to argue with that, on principle at least.

The judge and maybe courts of appeal will have to sort it all out. There may be other remedies, in law or in practice, that would reduce or eliminate the threat to Mission’s budget while making the plaintiffs happy. Or the courts might simply say Mission residents aren’t entitled to their money back.

Is there a lesson here?

One seems clear: Stay away from goofy taxes and fees. Mission wanted a driveway tax because it wanted to keep other taxes low and because city officials thought road users should pay for roads.

But everyone uses roads, even people who don’t drive. Ambulances and fire trucks need a way to get to your house, even if you never leave it. Asking all taxpayers to chip in for road maintenance seems reasonable.

The other lesson is how tough it is to be fair. Who has the better argument here — the apartment owners, who want their money back, or the residents of the city, who will have to pay it?

A judge will have to decide.

The Mission driveway tax drew statewide attention when it became law in 2010. It’s gone now, but its effects linger — on Mission’s streets and at its city hall.

This story was originally published August 19, 2017 at 3:30 PM with the headline "Should Mission residents get refunds from an illegal driveway tax? It’s complicated."