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Corporate Welfare / Special Taxing Districts

Community Improvement Districts Aren’t

By David Stokes on Oct 19, 2021
Downtown St. Louis
CE Photography / Shutterstock

The community improvement district (CID) that funds several programs in downtown St. Louis is having trouble. Big trouble. As in it may-not-continue-to-exist-type trouble. Many people who live and work in the area are not satisfied with how the CID has been operating, and that dissatisfaction is threatening its renewal.

The downtown St. Louis CID has to be renewed at various intervals, and renewal requires the signatures of the property owners within the district. This includes all property—condos, businesses, parking lots, etc. Because this CID actually serves an area where people live (which is one of the good things about it), renewal requires lots of signatures. COVID-related changes and restrictions have complicated this process. In addition, an organized group of downtown residents and property owners has been opposing its renewal.

The downtown CID collects money via special property taxes. If the CID does not get renewed soon, those taxes won’t be on the 2021 property tax bills sent in a few weeks to property owners. That could be the death of the CID right then and there.

What a special taxing district like this CID really forces one to admit is that the local government is failing. City businesses and residents pay property taxes, sales taxes, income taxes, payroll taxes, utility taxes, occupancy fees, business licenses, and more. Yet those taxes are not enough to keep the trash off of the streets and help maintain law and order (the two main uses of the CID funds, along with downtown “marketing”). So the business owners and residents decided to tax themselves more to address some of these issues. Clearly, many of them do not feel that those additional taxes ($3.6 million each year, to be precise) are paying off, and a termination date and renewal process gives a clear path for ending a CID, which isn’t often the case for many taxes.

The problems with these types of special taxing districts have been well documented around the state. While this CID does not share some of the most egregious characteristics of other special taxing districts, it is great to see people fighting back against government that is not serving their needs. That is what this country was founded on, whether we are talking about tea in Boston, or CIDs in the historic Village of Ballpark.

It should be noted that the leading proponents of getting rid of the current CID want to replace it with a new and differently organized CID, but that would require a separate and independent process with no guarantee of success. In any case, downtown property owners may soon see whether those extra taxes they were paying were really worth anything or not.

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About the author

David Stokes

Director of Municipal Policy

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