NEOSHO, Mo. — A lawsuit over a complicated tax issue reaches its end – ultimately costing the Newton County tax payers $700,000 in attorney’s fees.
The City of Neosho was forced to file a lawsuit against Newton County in order to get tax money the county collected between the years of 2017 and 2022.
Neosho sued Newton County and two elected officials in October 2021
The taxes were related to an economic development area known as a TIF district, which stands for tax increment financing. These special tax zones are set up to attract businesses that might not otherwise come to the area.
Newton County collected the special TIF district taxes, then paid them over to the city from 1999, when the TIF was implemented, until 2015.
In 2016 the county stopped paying those taxes to the city, saying it needed invoices from the city in order to pay what was owed.
In total, the city sued the county for non-payment of $1.51 million in taxes. And in April the judge ruled in the city’s favor, ordering the county to pay that amount, plus interest.
Newton County officials released a statement Thursday saying the groups came to a settlement and it was paying $370,000 to settle the suit.
But the Neosho City Manager says the county’s news release is all smoke and mirrors.
“The total due on the TIF was $1.51 Million dollars,” said David Kennedy, Neosho City Manager. “The $370,000, that was final payment. The settlement, was the full amount of that $1.51 million.”
He said that what the city did to get the issue resolved was to waive the interest, which was about $547,000.
Kennedy said the city wanted to end the dispute so they wouldn’t have to continue paying legal fees on either side.
Those legal fees totaled more than $705,000 between the county and the city.
The Newton County Treasurer, Gina Rodriguez, who was also named in the lawsuit, said in an email, that she has “confirmed with the Auditor that we have spent a total of $305,695.65 on the TIF lawsuit to date.”
Kennedy said the city spent over $400,000 on attorney’s fees.
The Auditor, Charlotte Walker Ward, was also named in the lawsuit. Both were sued in their official capacity as the Auditor and Treasurer.
Kennedy says the court issued its ruling in April, awarding the city nearly everything it asked for, plus interest. That’s when the county switched attorneys and continued to rack up additional attorney’s fees, requesting depositions, filing motions, and more. And Kennedy says it never should have come to a court battle, but the city had no other recourse.