Missouri AG dropped Jackson County property tax suit before questioning under oath. Why?

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As Thursday approached, Missouri Attorney General Andrew Bailey reached into a grab bag of legal tactics to avoid answering questions under oath about a meeting with Jackson County Legislator Sean Smith.

He succeeded – but his resistance could eventually affect Jackson County homeowners.

In recent days, Bailey tried to get the Jackson County Legislature dismissed from a lawsuit he filed last year alleging county officials illegally increased property assessments, in turn driving up property tax bills. He asked a judge to set aside her order requiring Bailey to answer questions; she refused. He wanted an appeals court to intervene, with no luck.

On Wednesday afternoon, Bailey moved to dismiss the whole lawsuit — less than 24 hours before a deposition that could have forced Missouri’s top law enforcement official to answer questions about what, exactly, he discussed with Smith, a fellow Republican and a defendant in the lawsuit. Bailey faces criticism over the ethics of the encounter.

A judge dismissed the case, amid an ongoing bench trial, on Thursday morning. It cannot be refiled.

Without the lawsuit, Jackson County homeowners now have one less avenue to fight the assessments, which have roiled local politics and angered an array of residents.

In justifying the dismissal, Bailey pointed to a Missouri State Tax Commission order issued Tuesday – Election Day – mandating that the county roll back the assessment values on 75% of its more than 300,000 property parcels due to alleged errors by the county’s assessment department. He said information obtained from his lawsuit helped lead to the tax commission’s order, which became public on Wednesday.

“Now we have all of our eggs in one basket,” Preston Smith, a former member of the board that oversees Jackson County homeowners’ assessment appeals and who has pushed to overturn the 2023 assessments, said on a local conservative podcast on Thursday.

“Before we had two paths – the trial, which I thought was going pretty good – and now we just have one, the State Tax Commission order,” said Preston Smith, who supported Bailey’s opponent in Tuesday’s Republican primary election.

Jackson County Executive Frank White, a Democrat, and Assessor Gail McCann Beatty are expected to fight the tax commission’s order. They have called it politically motivated and based on inaccurate information, as well as a “litigation tactic.”

Sean Smith, with the support of four other Jackson County legislators, said he will offer legislation to block the county attorneys from using taxpayer money to fight the state order. If all of those legislators maintain their position, they would have enough votes to pass a bill but not enough to override a veto from White.

‘Why did he do it yesterday?’

But if White and McCann Beatty successfully block the tax commission’s order, Preston Smith and other frustrated homeowners won’t have Bailey’s lawsuit to fall back on. “He has totally screwed this whole case up,” Preston Smith said.

Democrat Elad Gross, who is running against Bailey in the November general election, attacked the attorney general’s decision. Bailey had gotten the attention he wanted from the case and was now done, he said. Bailey on Tuesday won the Republican primary for attorney general; he had faced Will Scharf, a former federal prosecutor who had attacked Bailey’s competence.

“He just happens to move to dismiss it right before he’s supposed to sit for a deposition,” Gross said. “I don’t think that’s a coincidence at all.”

Bailey’s office didn’t directly answer a question about the impending deposition on Thursday, saying that the attorney general motioned to dismiss the lawsuit because of the tax commission’s order.

“We would have pushed the lawsuit forward if not for the order, and we would have won,” said Bailey spokesperson Madeline Sieren. She argued that the “evidence in this case was overwhelming.”

“Pushing the lawsuit forward could have jeopardized the much needed relief offered in the Tax Commission’s order and would be counterproductive for Jackson County taxpayers,” she said.

Sieren did not respond to a question about how much communication Bailey’s office had with the tax commission before it issued its order.

Chuck Hatfield, a Jefferson City-based attorney who previously worked for a Democratic attorney general, questioned the decision to immediately dismiss the lawsuit. Bailey, knowing about the order, could have waited another few weeks to see how the lawsuit developed — or asked for a stay in the case, he said.

“Whether you agree with the decision or not, why did he do it yesterday?” Hatfield said.

Sean Smith, the Jackson County legislator, said dismissing the lawsuit was the right decision because if the judge had issued a different order than the State Tax Commission, the county would have had to “go through a process to reconcile” the two decisions.

“By dismissing that case, I believe what they’ve done is streamline us toward getting to a resolution,” Smith said.

Soaring property assessments

Bailey filed the suit against Jackson County amid outrage after assessments jumped significantly last year. Residential property values increased by roughly 40% overall since the last assessment in 2021, according to county data.

The attorney general filed the suit in December alongside the tax commission . The lawsuit came just one day after Missouri Auditor Scott Fitzpatrick, a Republican, alleged Jackson County used a “flawed and inadequate” property assessment process that violated state law, affecting up to 200,000 homeowners.

Property assessments had long been a source of controversy in Jackson County. Many homes were undervalued for years, county officials have said, until they began raising valuations in 2019. The recent uproar even prompted lawmakers to consider legislation this year that would make the county’s assessor an elected position .

A bench trial in the case was scheduled to resume on Friday but was canceled after Clay County Associate Circuit Judge Karen Krauser granted Bailey’s motion to dismiss the case.

Before Friday’s trial, Bailey was scheduled to answer questions under oath about his meeting with Sean Smith, the county legislator, an encounter that could have violated legal ethics rules.

Krauser had ruled last month that Bailey could be deposed about his communications with Sean Smith. She also found that Travis Woods, an attorney in Bailey’s office, violated court rules by holding a separate virtual meeting with Smith.

The judge’s order focused on two separate meetings while the litigation against Jackson County was ongoing. One was an in-person meeting between Bailey and Sean Smith, a Republican who is running for Congress, on April 27. The other was a virtual meeting between Woods and Smith after Smith was deposed in the lawsuit against Jackson County.

Woods’ meeting with Smith violated a Missouri Supreme Court rule that bars attorneys from communicating about the case they’re working on with another person represented by a lawyer in the same case, Krauser said.

While Krauser’s order did not say that Bailey’s meeting with Smith also violated court rules, it allowed attorneys for Jackson County to question him under oath about “the nature of the contacts, who was present for the contacts, and what was discussed during the contacts.”

“The Missouri Attorney General’s Office is not exempt from the requirements of the state ethical rules,” Krauser wrote in the order.

Sean Smith said Thursday that he had no concern about what Bailey would have said if he had been questioned. He said during a campaign meeting at his home, Bailey stopped by but emphasized that the encounter was brief.

“We never sat down, we never got out of basically the foyer of my house,” Smith said. “I said, ‘these are my people’ and introduced them. I said, ‘thank you for pursuing the tax matter’ and I took a picture and posted it, which is what politicians do.”

Rolling back values?

The State Tax Commission’s order requires Jackson County to roll back the assessment values of 75% of the county’s more than 300,000 properties, citing errors by the county’s assessment department.

Specifically, the county violated a state law that requires a physical inspection of all properties when the assessed value is raised by more than 15%, the commission said. The order forces Jackson County to cap increases at 15% since it didn’t inspect all the required properties.

The State Tax Commission, in a statement released by its chief counsel, Gregory Allsberry, said the order was approved at a regularly-scheduled meeting on Tuesday. The statement noted that the Jackson County Board of Equalization, which oversees assessment appeals, is required to complete its business by Aug. 24 and that the commission recognized it was critical to issue the order before the county finalized its assessed values for 2024.

“The Commission reached its decision to issue an Order after examining a substantial amount of information which it has acquired over the last few months, including but not limited to County assessment records and sworn statements of County officials which it obtained through discovery in its lawsuit against Jackson County,” the statement says.

Official minutes show commissioners met on July 23 for a presentation from the Missouri Attorney General’s Office. Preston Smith also participated, and he said during Thursday’s podcast that he had given a detailed slide presentation about the assessments.

County officials on Thursday slammed the order, saying that it would have disastrous consequences for county services and school districts, which rely on funding from tax assessments.

The county estimated that schools and libraries could immediately lose more than $86 million in money they had already received and spent due to the order. And cities and fire districts could lose nearly $20 million, the county said.

“This order is not just bad for our taxing jurisdictions; it’s bad for our taxpayers,” said White, the Jackson County executive. “The process to fix decades of mismanagement and unfairness hasn’t been easy, but we are committed to doing what is right for our community.”

Beatty, the Jackson County assessor and a former Democratic lawmaker, said the issue was about fairness.

“The only way to ensure fairness is to assess all properties at market value, as required by state law,” she said. “We’ve seen that many homes have been undervalued for years, forcing others to overpay. We cannot stand by and allow this injustice to continue.”

But Missouri lawmakers, including some members of both parties, appeared to mostly celebrate the order, pointing to the outcry from property owners over the increases.

House Majority Leader Jonathan Patterson, a Lee’s Summit Republican, on Thursday called on Jackson County to follow the ruling and “make this right with the taxpayers.”

“This order by the Tax Commission confirms what the citizens of Jackson County have been saying for years now, that the assessment process has been unfair, and even unlawful,” he said.

However, some Democrats were quick to question the motivations behind Bailey’s decision to try to dismiss the lawsuit just before he was scheduled to be deposed.

“Timing, you know, I think played a big part in it,” said Rep. Michael Johnson, a Kansas City Democrat.