Chesterfield and the Terrible, Horrible, No Good, Very Large TIF
Chesterfield does not have a municipal property tax. There’s nothing wrong with that. It funds its local government primarily with sales taxes. Again, that’s all fine.
But now it wants to both subsidize and fund a major redevelopment of and around the Chesterfield Mall, and it wants to use property taxes to do so. How do you do that when you don’t have a property tax? Solution: you just take the property taxes from other governments. While that type of stealing would be illegal in many other situations, it is, unfortunately, perfectly legal under the tax-increment financing (TIF) laws of Missouri.
How much tax money is Chesterfield planning to take from other taxing districts should the development be approved and built (no guarantees on either of those)? $300 million. That’s right, $300 million.
The development proposal includes over 3,000 new residential units. Those residential units are going to have families with children. That is obviously wonderful, but what is not wonderful is that the school property taxes from those 3,000 units for the life of the TIF (around 30 years due to the phased in nature of it in this instance) will not go to the school districts (mostly Parkway, some in Rockwood). That tax money will go to Chesterfield and to the developer. The plan includes giving millions of dollars voluntarily to Parkway in an effort to buy the school district’s support, but the school districts have added up the money and concluded it will be short. How far short?
$220 million short. That’s right, $220 million. The school districts have calculated the probable number of extra children who will join the district because of the development, the need for an entirely new school building to educate them, the cost to educate those children on top of the new building, the length of the TIF project, and more, and concluded that they are short $220 million tax dollars in this deal. How are Parkway and Rockwood going to make up that estimated $220 million? They have only a few choices: cut school services in various ways or—more likely, in my opinion—request a tax increase on taxpayers outside of the TIF district.
So let’s be clear: in order for taxpayers to fund the demolition of Chesterfield Mall (instead of having the group that actually owns the mall take care of it) and hundreds of millions of dollars’ worth of other amenities—including $23 million to pay the cost of lawyers, planners, and financiers—the residents of Parkway school district can almost certainly look forward to a tax increase on everyone who is not inside the TIF district. (To be clear, residents inside the TIF district will also pay the higher tax, it just won’t go to Parkway schools.)
Something is deeply wrong with how we fund local government in Missouri.
