Kansas Supreme Court hears oral arguments on Mission’s so-called driveway tax

Mission used its transportation utility fee for street maintenance.
Mission used its transportation utility fee for street maintenance.

The Kansas Supreme Court heard oral arguments Wednesday on the legality of the Transportation Utility Fee imposed by Mission in 2010, often referred to as the driveway tax.

The case, Heartland Apartment Assoc. vs City of Mission, was brought by a group of businesses and private citizens who believed the assessment was an illegal excise tax. The city enacted the TUF to raise money for road repairs based on the concept of the amount of traffic generated by users.

A single-family homeowner paid $72 per year when the TUF was in effect. Businesses that were deemed to generate more traffic paid much higher fees. The TUF proceeds of about $800,000 per year were dedicated solely to street repair and maintenance.

A Johnson County District Court judge ruled in November 2013 that the fee was legal. That ruling was reversed by the Court of Appeals appeals in 2015. The city ended the TUF following the appeals court decision and replaced it in the 2016 budget with a 7-mill increase in property taxes.

At the Supreme Court hearing, Thomas Murray, the attorney representing Mission, argued the appeals court had been wrong to consider the TUF as an an excise tax. In his brief, Murray said Kansas law recognized the legality of special fees “which would encompass the TUF, which is not a tax at all, much less an excise tax.”

Mary Jo Shaney, the attorney representing the plaintiffs, argued the Court of Appeals was correct in deciding the TUF was an excise fee. She described the TUF as “an invalid exercise of the city’s power” in her brief to the judges.

The plaintiffs also had briefs filed on their behalf by Kansas Attorney General Derek Schmidt and the Kansas Association of Realtors.

Resolution of the case may have a profound impact on the Mission city budget. Unresolved is not only the question of whether the fee was legal or not, but also whether the estimated $4 million collected from residents and businesses will need to be paid back.

No date was set for when the Kansas Supreme Court is expected to make its decision.