In 1984, lawmakers replaced the merchants and manufacturers inventory tax with a surtax on commercial property. In 1989, the Cole County Collectors Office changed the way it assessed and collected the surtax.
Then for the next 20 years, Jefferson City government received less money than it was supposed to.
"The City of Jefferson has done without those funds, Jefferson City Mayor John Landwehr said. We did not know that we deserve those funds,
Millions of dollars went to the wrong taxing authorities. Under the statute of limitations, only about $800,000, money collected in the last three years is recoverable. Most of that amount went to the Blair Oaks School District.
Blair Oaks Superintendent Jim Jones said the school board will have a special meeting to consider the repayment of some tax money it should have never received.
Ironically, it was Jones who brought the mistake to light by questioning a dramatic increase in his surtax allotment. He said he was assured the calculation was correct and the school board budgeted the hundreds of thousands of dollars that should have gone somewhere else. Now, the district has to pay that money back.
"The challenges that we're facin' now are through no fault of our students, so that's what we wanna make sure we protect as we move forward, Jones said.
Tax collector Larry Vincent proposed an interest-free payback over 52 years for Blair Oaks, cutting only their future commercial surtax revenues.
"I didn't want 'em to have to take money from their other funding sources, revenue sources, to pay back surtax, Vincent said.
"The 52-year plan? We really didn't take it seriously because it's such an extended time frame to where it almost becomes meaningless, Landwehr said.
The city has proposed a 10 year, interest-free payback. That would cost Blair Oaks in excess of $60,000 a year, not to mention the loss of surtax revenue they expected to receive down the road. Vincent is the go-between in the negotiation.
"I don TMt have the authority to enforce anything, Vincent said.
Jones was not sure exactly when the Blair Oaks School Board would meet.Landwehr hopes the matter can be resolved within the next couple of weeks.