Pubdate: Sat, 21 Feb 2004 Source: Kansas City Star (MO) Copyright: 2004 The Kansas City Star Contact: http://www.kcstar.com/ Details: http://www.mapinc.org/media/221 Author: Joe Lambe Bookmark: http://www.mapinc.org/corrupt.htm (Corruption - United States) TAX ALLOCATION BYPASSED GUIDELINES Anti-Drug Funds Worth $6.4 Million Jackson County Executive Katheryn Shields acknowledged Friday that she has spent millions of dollars in surplus anti-drug sales tax money without following voter-approved guidelines. The quarter-cent COMBAT tax specifies a formula to allocate the money among police, prosecutors, corrections, drug treatment, courts and drug prevention. That was done for an estimated $19.5 million expected to be collected this year. But Shields said she did not follow that formula in allocating $6.4 million of the surplus tax money this year. She said the money primarily went to law enforcement agencies, but she did not know the exact percentage. Shields provided some records about spending the surplus at the request of The Kansas City Star. The administration was still compiling records on Friday to present to the county Legislature. Shields said she did not believe the guidelines applied to the tax surplus. She also noted the expenditures were on county budget documents. Shields said she did not think it made sense to allocate the surplus funds according to the percentages specified by the tax. "I think what you need to do is base it on need," she said. But next year, Shields said she will hold public hearings on spending of the surplus money and consider dividing it among all recipients. The vice chairman of the county Legislature, Henry Rizzo, said her spending raises legal questions and prompted him to call for an audit. "I'm wondering whether the ordinance allows discretionary spending," he said. Friday's development follows a week of turmoil in the county courthouse. County Prosecutor Mike Sanders called for an audit and announced a criminal investigation into possible conflict of interests regarding the county's anti-drug tax. Sanders subpoenaed records for county officials and employees. Shields said the investigation was politically motivated. Earlier this year, agencies that receive the tax money were told revenues were down, no extra money was available and cuts were made in some programs. Yet records provided Friday showed the discretionary spending of the surplus has gone on for years. The county has spent or appropriated $12.4 million of the surplus since 2002, records show. Since 1996, the largest amounts of surplus funds went to police and prosecutors, giving them money well above their allotted percentages of 9.5 percent each. The largest amount of extra money in that time - more than $7 million - went to the prosecutor's office, the report stated, with about $2.4 million of that while Sanders has been prosecutor. Sanders said Friday he did not know of the surplus fund, doubted his office received that much and added, "I think that ought to stop, too. It should all be divided according to the percentages." Voters approved the tax formula because they were afraid politicians would determine where the money was spent, Sanders said. "Now it appears that may be the case," he said. Sanders said the records show the need for the audit, and he plans to address the issue Monday at the Legislature's Finance and Audit Committee. Shields said she would not oppose an audit. Rizzo said he did not know of the surplus until this week and wondered whether the years of discretionary spending were legal. At the very least, he said, all the spending should be listed and carefully accounted for. Rizzo also said the Legislature should audit the money regularly through its own independent auditor. The county charter states that the legislature "shall provide the scope" of an audit of all departments at least every three years. Rizzo said the Legislature has not done its job in auditing COMBAT. Police have complained this year about not receiving enough tax money and have talked of an audit. News about the discretionary fund caused concerns. Independence Police Chief Fred Mills said Friday that a $50,000 cut to the Drug Abuse Resistance Education budget forced him to cut an officer, and he was turned down in a request for money for more drug officers. "I was told there were no reserve funds and my budget cuts were due to reduced revenues," he said. Shields said that the budget review Friday showed that DARE was mistakenly cut and $112,000 in funding would be restored. Police and prosecutors may not have realized they were getting extra money from the reserve fund because the funds are automatically forwarded to them, she said. The fund is mentioned in a line item on paperwork and in yearly county budgets, she said. "If they didn't know it existed they certainly should have," she said. "Most if not all of them have received money out of it." For next year's budget, she said, she would support public hearings before the COMBAT commission that allow citizen input on how a specified amount of reserves should be spent for all recipients of the money, including law enforcement, treatment and prevention. The reserve fund dates from the early years of the tax when money was collected and few programs were in place. It also accumulates over the years from unspent appropriated money; it amounted to $10.4 million two years ago. Legislator Ronald Finley, chairman of the Finance and Audit Committee, said he knew the reserve fund existed because it was listed as a line item in the budget, but he knew little beyond that. As to whether he would support an audit, he said he is waiting to see the county figures and hear the prosecutor's concerns on Monday. "I'm not sure where this is going," he said. - --- MAP posted-by: Jay Bergstrom