Special Taxing District Don’t Stop Coming
Thanks to the Walt Disney Company and the State of Florida, special taxing districts are in the news. Florida is set to repeal the Reedy Creek Improvement District, which is the special taxing district that underpins local government—for lack of a better term—at Disney World. (I can envision various anthropomorphic cartoon characters sitting around a dais arguing about quorum calls and motions being properly seconded, but I digress.)
Special taxing districts are generally defined as public entities that are created to do one thing only, such as a street light district, as opposed to general districts such as cities or counties. Obviously, the latter get much more attention than the former. We discuss Kansas City far more than we discuss the Cape Girardeau–Bollinger County Joint Recreational Lake Authority.
What does this debate in Florida have to do with Missouri? Well, we actually have an enormous number of special taxing districts in Missouri, although none as large and all-encompassing as Reedy Creek in Orlando. Special taxing districts fall into two broad categories in Missouri: ones that perform a single public service, such as fire, ambulance, street light, and road districts, and ones that essentially funnel corporate welfare to various private entities under the guise of public improvements. The latter are primarily Community Improvement Districts (CIDs) and Transportation Development Districts (TDDs).
The latter two are also the ones expanding most rapidly in Missouri. Right now, there is a debate in Jefferson County about the Bear Ridge Community Improvement District, which is essentially a taxing district that, according to my sources in Jefferson County, will fund infrastructure improvements for a new subdivision. What’s wrong with that? Well, until very recently developers would fund these improvements themselves and recoup their investment and profit upon sales of the homes, rental of the office buildings, etc. Now, developers have figured out that they can transfer many of these costs to taxing entities, based on either property or sales taxes, and use these public tax dollars for what are essentially private services.
Missouri Auditors from both parties have documented the abuses and mismanagement that inevitably come with so many tiny taxing districts with hardly any oversight. Show-Me Institute analysts have covered this issue for years. There is at least one bill before the legislature this session that has needed changes to many special taxing districts. Hopefully, the dispute at Disney World can help shine some light on special taxing districts in Missouri.
Why? Because we need reform, too.