A version of the following commentary appeared in the St. Louis Business Journal.
There is a proposal for a $39 million tax-increment financing (TIF) district in the Midtown area of the City of St. Louis. The forces behind the TIF proposal include the area’s commercial and artistic associations. The backers are claiming that because the redirected taxes will go toward “public” items such as infrastructure improvements for sidewalks, crosswalks, and streets, that this is a responsible use of TIF. They could not be more wrong.
This TIF plan will work just like all the others do. If the appointed TIF commission approves it, up to $39 million in future increases in property, sales, and earnings taxes within the boundaries of the Midtown TIF district will be redirected away from City Hall. The funds will be given to the TIF district itself to privately allocate towards the projects that it chooses. The St. Louis school district, the city itself, and other taxing districts will still collect what they do now, plus a portion of increased taxes over the next 23 years. But most of the increased revenues will go toward projects chosen by the leadership of the TIF district.
Before you think that this sounds fair, please do a mental exercise with me. What if the residents of the wealthiest neighborhoods in St. Louis city, let’s say the area roughly surrounded by Lindell, Skinker, the Forest Park Parkway/Waterman, and Kingshighway, put together their own TIF district. Those residents could make the same argument. The city and the other taxing districts can keep what they get now, we just want the increased revenues for the next 23 years to come under our control, not the control of the various elected boards. We promise to spend it on better sidewalks, private security, public art along Lindell, and more. It’s only fair that we get to keep the increased revenue for our own community. Who are you to oppose this request?
I would hope that one would look at a request by the owners of the beautiful mansions along Lindell to keep their own taxes for their own, preferred purposes to be a ridiculous proposal. We pay taxes (at least we should) for public purposes and in a manner determined by elected officials who are responsible to voters. The request by the backers of the Midtown TIF proposal—including the Kranzberg Arts Foundation, Grand Center Inc., and the Locust Central Business District—is every bit as absurd as the theoretical example I gave for Lindell Boulevard.
This is not to defend, in any way, the other TIF arrangements used throughout the City of St. Louis and the rest of the region. They have been a failure from top to bottom. But at least the other TIF plans attempt to grow the overall economy through the tax incentives. This Midtown TIF proposal doesn’t even bother with that. The Midtown TIF district’s proponents just want to keep more of their own taxes for their own uses. I can’t blame them for wanting that; don’t we all wish to do so? But the idea that an unelected group would get to privately decide how its future taxes are going to be used makes a mockery of democracy itself.
Investments in the infrastructure serving the theatres and restaurants along Grand may well be necessary and beneficial investments. More police in North St. Louis may also be a good investment. A new fire house in South St. Louis may be a good investment. We elect people to make these decisions and answer to voters for the outcomes. Turning the entire process over to a private group is the exact opposite of everything we are supposed to be celebrating on this 250th anniversary of our nation.
