What was the Hancock Amendment?In 1980, the Missouri constitution was amended to include a taxing and expenditure limitation, Mo. Const. Art. X, § 18, which is commonly known as the Hancock Amendment.
The Hancock Amendment requires the state to refund money to income tax payers when revenues are in excess of a percentage based upon the personal income of Missourians. If, in any given year, there is a revenue surplus greater than 1% of the revenue limitation, the state must refund the money to taxpayers.
There were refunds in the late 1990s, but it is unlikely that the refund provision will be invoked any time soon because the state is at least $3.9 billion dollars below the revenue threshold.
Further, the Hancock amendment limits the overall amount of new annual revenue that the legislature may raise in any one year without voter approval.
Because Missouri currently only raises about $8.75 billions in total state revenue, Audtior Thomas Schweich has calculated taxes would need to be raised about 40% to reach the 1980 Hancock base year ratio of Missouri personal income of 5.6395 %.
How does the Hancock Amendment limit the power of the General Assembly to tax?The Hancock Amendment, as amended in 1996 ( Mo. Const. Art. X, § 18(e)), also limits the power of the General Assembly to tax.
Missouri State Auditor The Hancock Amendment also requires voter approval before taxes or fees can be increased by the General Assembly beyond a certain annual limit.
Based upon the calculation provided by the Office of dministration,
Division of Budget and Planning, the relevant annual revenue limit for fiscal year 2012 was $80.2 million.