Springfield Should Reject Subsidies for Sports Town
A version of this commentary appeared in the Springfield News-Leader.
It is important to learn from one’s mistakes, and when it comes to special taxing districts in the Springfield area, there are plenty of mistakes to learn from. Special taxing districts (SDs) are tax districts established to support one specific function or program, such as a school district. In recent years, however, most new SDs have been nothing more than vehicles for corporate welfare, and their use in Springfield has been anything but an example of good government.
Springfield is now considering a gift basket of new tax subsidies for the Sports Town youth sports complex. This included the recent city council approval of a new community improvement district (CID) to use tax dollars to subsidize the private development. First, the city gerrymandered a map to make sure the new CID didn’t include any voters to get around the voting requirements. Next, city leaders decided to give the developers $2 million in upfront subsidies even though the city’s own guidelines recommend against doing exactly that. The upfront subsidy by the city means that all Springfield taxpayers are paying for this project, not just the ones who may use the facility.
Remaining on this expensive list is a request by the developers for $4 million more subsidies from federal stimulus funds. Shockingly, the developers have decided that their project qualifies for federal funding. Maybe it’s for the sewers, or for tourism, or perhaps this project will help fight the COVID pandemic. Youth sports may be infrastructure now. Whatever the feeble excuse is, the lure of “free” federal money is strong. If a private development such as SGF Sports (the company behind Sports Town) cannot succeed without multiple subsidy programs, it’s not the job of taxpayers to ensure it goes forward.
With such a large subsidy upfront, Springfield is basically trying to be a real estate developer. The city should have learned from Greene County that government real estate speculation is a bad idea. That county previously subsidized the private Jamestown development by creating a neighborhood improvement district (NID) to pay off bonds the county issued in support of the proposal. It assumed the future taxes from the NID would suffice to pay off the bonds. It assumed wrong. When the Jamestown project failed, Greene County taxpayers were on the hook for the unpaid debt. Springfield should have learned from this costly mistake.
This SGF Sports CID would be the 17th CID in Greene County, most of them in Springfield, along with at least four more transportation development districts (TDDs). Despite the public-sounding names, many CIDs and TDDs consist of just a few parcels of property with sales taxes imposed on the public for the private benefit of one property owner. These tax dollars are often used for essentially private purposes, such as retail parking lots or landscaping.
How have these other SDs worked out in Springfield? Not very well. Missouri state auditor Nicole Galloway specifically cited Springfield’s HyVee store CID for improperly collecting almost a quarter million dollars of tax money. Galloway also identified Springfield’s College Station TDD downtown for multiple abuses, including failures to notify shoppers of the tax. Based on research on SDs generally in Missouri, the other SDs are likely functioning as corporate welfare schemes here in the Queen City of the Ozarks.
Springfield is a vibrant, growing community that does not need to rely on tax subsidies to boost its economy. If Springfield wants to help all businesses succeed rather than just a select few, it should work with Greene County to lower its commercial property tax surcharge rate, which is high compared to those of other Missouri communities. The CID for Sports Town was not necessary, and $4 million more from federal funds would be an even worse decision. The evidence is clear that these subsidy programs produce more financial mismanagement than economic growth. Springfield should learn from its history and stop repeating the same mistakes.
