The City of Kansas City, Mo., filed a Petition for Declaratory Judgment and Injunctive Relief in Cole County Circuit Court on Friday August 13, 2010 challenging the constitutionality of a recently certified earnings tax initiative petition and asking the Court to enjoin the Secretary of State from taking any further measures to place the issue on the Nov. 2, 2010 ballot.

The lawsuit argues the initiative petition violates several provisions of the Missouri Constitution including the Hancock Amendment.

The lawsuit argues the initiative petition violates the Hancock Amendment, which prohibits the state from requiring any new activities by the City without full state funding, because the measure would require the City to have an election in April 2011 and every five years thereafter in order to continue the tax. A single-issue election will cost the City about $500,000.

The lawsuit also argues the initiative petition violates a provision of the Missouri Constitution which prohibits the use of the initiative for the appropriation of money unless the initiative provides the new revenue, because the petition fails to provide the revenue for the required elections.

The lawsuit argues the petition violates the single subject rule because it involves both the earnings tax and the net profits tax on businesses and also because it prohibits earnings and net profits taxes in the future in cities that do not currently have them.

The lawsuit argues the petition violates the rule that the subject be clearly expressed in the title because the title does not reference the net profits tax.