The 100-Year Flood Of TIFs
Is there anything the Missouri Legislature could do to both reduce the abuse of tax subsidies in Missouri AND improve the environment? Well, yes, there is. The legislature needs to strongly consider expanding RSMo 99.847, a state statute that prohibits the use of Tax Increment Financing (TIF) in floodplains in Saint Charles County. That law needs to be expanded to the entire state.
Many Missourians recall the flooding in the summer of 1993. (I don’t; I was 5 years old and lived in Chicago.) Enormous floods led to extensive levee failures along the Mississippi and Missouri Rivers, especially in eastern Saint Charles County. Homes and businesses were quickly inundated, leading to millions of dollars in damage. Continued development in flood plains and inadequate levees mean there is a threat of a repeat of 1993. That is a problem, but the fact that we subsidize the development with poorly designed national flood insurance policy and local TIF is even worse.
According to federal law, all construction within flood plains must buy flood insurance through the National Flood Insurance Program (NFIP). However, developments built behind a “100-year flood levee” are not required to own flood insurance, so most do not. (A “100-year flood levee” is designed to withstand flood levels with a 1 percent — or once in 100 years — chance of occurring in a given year.)
As everyone learned in 1993 in Chesterfield, Saint Charles, Jefferson City, and many more parts of Missouri, even levees we think are solid may be no match for nature’s power. To make matters worse, thanks to local TIF-supported development in proven floodways, there are now even more developments in areas that were flooded in 1993. Many do not have flood insurance.
Rather than waiting for a disaster to wipe out millions in investments and property, Missouri and localities should consider disincentivizing further construction in inadequately protected floodways. One good way to do that is to expand the prohibition against TIF in floodplains. If you want to build in a floodplain, fine, but you are going to pay for it, not taxpayers.
Otherwise, Missouri taxpayers will inevitably bear even higher future costs in disaster relief.