The City of Ellisville Versus the Saint Louis County TIF Commission
Last night, Show-Me Institute Policy Analyst David Stokes testified against the use of tax increment financing (TIF) before the Saint Louis County Tax Increment Financing Commission. Ellisville officials are seeking TIF to finance a $49 million redevelopment of 16 acres on the southwest corner of Manchester and Kiefer Creek Roads. Sansone Group, the proposed developer, plans to build a Walmart.
The Commission voted 7-4 against using tax incentives to finance the development, but despite the commission’s opposition, we may very well see a Walmart Superstore in Ellisville. That is because, in this case, the Commission’s recommendation has little practical effect. The Ellisville City Council still has final say and the negative recommendation’s only effect is to require a supermajority vote of the City Council (five of seven members), whereas a positive recommendation would have required just a simple majority (four of seven).
The Ellisville situation exemplifies just how broken the TIF system is in Saint Louis County. Despite overwhelming opposition from the County (all seven negative votes came from County representatives), Ellisville could still easily get its TIF. This approval process favors point-of-sale cities and plays down the importance of the County TIF Commission’s decision.
The Missouri Legislature needs to revisit the TIF approval process in Saint Louis County. In order for a TIF to pass, the local city government and the county commission should each have to approve the project, independent of one another. Independent approval requirements would encourage collaboration between cities and the county, in contrast to the current adversarial process that threatens the sales tax pool and encourages point-of-sale cities to abuse eminent domain.
Charles Pavlack, the Commission chairman and a former Ellisville City Council member, told the St. Louis Post Dispatch: “For us to say we’ll take the moral high ground and make a brave stand to turn down TIF, when others have used the same method to take our business, doesn’t make sense.” But this should not be about Ellisville versus Saint Louis County. After all, there is overwhelming evidence that an Ellisville TIF is bad for everyone, including Ellisville. According to the East-West Gateway Council of Governments, TIF creates one retail job for every $370,000 in taxpayer subsidies. As David Stokes testified last night: “That is not a road to growth — it is a road to poverty.”