TDDs are often abused by private developers as a means to expand corporate welfare under the pretext of “infrastructure improvements.” Most TDDs are created simply by the signatures of the property owners (often just one developer) who want to establish them. The TDDs are then governed by a board (affiliated with the property owner) that treats the tax funds as private money rather than public tax dollars. Missouri state auditors have consistently documented problems with TDDs for the past two decades.

Kirkwood city leaders deserve credit for putting this TDD to a vote of the entire city. They also made the right choice by ensuring that city leaders will have primary control of the future funds. Kirkwood residents can be confident that the taxes raised would be properly accounted for and spent on public needs, not private wants.

The main argument against this TDD is that sales taxes are not, generally speaking, the preferred way to fund transportation projects. Kirkwood should consider a local gas tax (which is allowed, yet admittedly rare in Missouri) before it commits to a sales tax for its roads. And, while nobody wants to hear it, property taxes are a better way to fund sidewalks in a community. General sales taxes are a way to push local costs onto visitors instead of having local people pay for the public services in their own neighborhoods.

Kirkwood voters face a tough decision tomorrow, but whatever the result of the vote, residents will benefit because the most harmful aspects of TDDs have been properly addressed by the city.

The post A Fork in the Road in Kirkwood appeared first on Show-Me Institute.

The post Olia Village Transportation Development District Proposal appeared first on Show-Me Institute.

Fast forward to today and nothing has changed. Property assessment data received from Jackson County through an open records request show the aggregate annual market value of Kansas City’s downtown streetcar Transportation Development District (TDD) is largely growing at the same rate as the county as a whole.

In other words, the streetcar is still not driving economic development in any substantial way. Were that the case, you’d see market values in the TDD rising at a much faster rate, as properties are quickly snatched up and redeveloped to take advantage of all that commerce and excitement.

There may be arguments for expanding the Kansas City streetcar. But those arguments aren’t about transit (all the streetcar routes were once and could be again served much more economically by buses) and they aren’t about economic development. And because 66% of Missouri electricity is generated by coal, the streetcar isn’t green, either.

Unfortunately, as the FTA reported, few streetcar operators actually check to see if their claims are true. That remains the case in Kansas City.

The post The KC Streetcar Still Isn’t Driving Economic Development appeared first on Show-Me Institute.

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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.

The post Special Taxing District Don’t Stop Coming appeared first on Show-Me Institute.

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.

The post Springfield Should Reject Subsidies for Sports Town appeared first on Show-Me Institute.

There are ways to fund local road maintenance other than sales taxes. As the National Surface Transportation Infrastructure Financing Commission has noted, paying for road maintenance with taxes largely unrelated to road usage creates problems. If people aren’t charged for using roads directly, people will drive more, which in turn leads to higher road maintenance costs.

A local fuel tax is a good solution to the problem of paying for road maintenance—a fuel tax is directly related to driving. Additionally, local fuel tax revenue is constitutionally required to be spent on local road maintenance, decreasing the risk of financial misuse.

Seven Missouri cities already have local fuel taxes; none are higher than 2 cents per gallon. According to my calculations, Kirkwood could raise over $266,000 per year from a 2 cent per gallon local fuel tax on gasoline and diesel fuel. A downside of a local fuel tax is that you don’t collect any revenue from large trucks that may not stop to buy gas in Kirkwood, but still damage the roads when passing through.

No matter how Kirkwood residents and officials decide to raise money for local road maintenance, the city should carefully manage the money raised and ensure that all proper reporting, transparency, and auditing rules are observed. The proposed TDD has redeeming qualities and could be a viable option for funding needs. Nontheless, Kirkwood officials and residents should also consider other transportation policy options.

The post Kirkwood Should Consider the Pros and Cons of All Transportation Funding Options appeared first on Show-Me Institute.

The fact that the developers have requested eminent domain should disqualify it from the start. From the article about the proposal (emphasis added):

The developers have asked the city for the power to use eminent domain to force property owners to sell, but said they are not considering it now.

So they want the power of eminent domain, but as of now they say they don’t plan to use it. Until they deal with a property owner who does not feel like selling, of course. Just the threat of eminent domain impacts the entire process negatively.

They also want tax subsidies:

They need approval for $35 million in tax incentives, plus an extra sales tax.

So, a big TIF, plus a CID or TDD (to be determined), so that average people throughout the region can subsidize this development.

I don’t know if there is a real market for new apartments, condos, shops, etc. in this part of Webster Groves. There may well be. But if the project has to have huge tax subsidies and the threat of eminent domain, then I would doubt it.

The TIF commission should deny the TIF and the Webster Groves City Council should refuse the eminent domain and oppose any CID, TDD, etc. Then the developer can talk with the property owners and move forward or not.

The post Webster Groves Has Some Decisions to Make appeared first on Show-Me Institute.

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Dierbergs has decided instead to use the TIF that was approved for the site in 2016 for a different developer but was never acted on. The previously approved TIF is for $15 million, a slightly higher amount than the one in Dierbergs’ proposal. But TIF projects can only be active for a maximum of 23 years, and because this one was approved in 2016, it will only have 18 years available. It appears that there will still not be a request for funds for the residential portion of the development

The 2016 proposal also included a $5 million CID and $5 million transportation development district (TDD). A Dierbergs representative said the company will be asking for a CID that is less than $5 million and will not use both a CID and TDD to develop this site. If this remains true, the overall size of the subsidy package will be slightly smaller than the overall $25 million proposal in 2016. But it’s possible that this new avenue will give Dierbergs access to even more taxpayer dollars than its proposal from a few months ago.

It’s unfortunate that taxpayer dollars are being used to develop this area at all. Sure, there’s a shorter timeframe for the TIF and no subsidy for the residential portion, but that’s small consolation. What was true in 2016 is still true today: A TIF at this location is just a way for lawmakers to look like they are “doing something” about this long-empty location at the expense of taxpayers.  Hopefully in the future, Crestwood can do better for taxpayers by not offering their dollars to developers at all.

The post Crestwood TIF Update appeared first on Show-Me Institute.

Numerous state audits over the past decades have identified the shortcomings of these districts. Now, the Kansas City Auditor has reviewed the use of CIDs in Kansas City and found many of the same issues. Show-Me Institute analysts have written about the problems with CIDs and TDDs for years. Common problems with these special taxing districts include financial abuses, lack of transparency, egregious boundary drawing to avoid voter participation, and much more.

The recent audit of CIDs in KC found many of the same things. From the article in the Kansas City Star (emphasis added):

In recent years, however, several CIDs have been created to benefit a single property owner or developer. In 2016, for example, the Intercontinental Hotel at the Country Club Plaza created a CID for itself to raise taxes earmarked to pay for upkeep of deterioration that the ritzy hotel argued had created blighted conditions. A similar CID was approved for the Romanelli Shopping Center in Waldo in 2019.

Both were criticized for using taxes to subsidize property maintenance. More than half of the existing CIDs in Kansas City benefit a single owner or developer, as opposed to community-based districts like those covering Westport or downtown.

The audit also noted that several CIDs — more than a third — have not submitted their annual budgets to City Hall, a requirement under Missouri law.

Legislation just passed by the state legislature makes some modest reforms to CIDs. These reforms include mandating annual financial reports, competitive bids for contracts, and requiring at least one independent board member. Hopefully, the governor will sign it. But we need to go much further and ensure these taxing districts cannot abuse the public trust for private gain, which is all many of them are good for. (Yes, there are exceptions to that.)

We need far more voter involvement, stricter reporting requirements, tougher limits on which expenditures are allowed, and total tax caps, just to name a few potential improvements. The single most important thing we need is a requirement that a full city (or county, for unincorporated areas) vote to approve all new CIDs and TDDs.  Absent greater reform, these special taxing districts will continue to just be the great Missouri tax-and-spend deception.

The post More Evidence of Failures of CIDs appeared first on Show-Me Institute.

Currently, local roads are funded by a combination of fuel taxes and local property and sales taxes. Sales taxes are the worst way of the three to fund road maintenance.

Paying for roads with taxes only tangentially related to road usage promotes inefficient vehicle and travel choices, which leads to faster road deterioration, wasted fuel, congestion, and air pollution. If people aren’t exposed to the true cost of something, they will overconsume it. For a market to work properly, true price signals are needed.

Instead of a TDD, Kirkwood officials should consider implementing a local fuel tax. Local fuel taxes allow markets to work by connecting how much you drive with the cost of driving. Buying a gallon of gasoline has more to do with driving than buying a TV or a loaf of bread.

Additionally, money raised from local fuel taxes is constitutionally required to be spent on road maintenance and safety, reducing the risk of the money being spent on other, potentially wasteful projects. The biggest challenge in implementing local fuel taxes is that they require a two-thirds majority among voters to pass. Kirkwood’s TDD would only need a simple majority.

Seven cities in Missouri currently have local fuel taxes. Most are just one cent per gallon and, depending on traffic, can raise hundreds of thousands of dollars annually. Kirkwood is significantly larger than any of these cities and thus may be able to raise even more money.

If Kirkwood officials want to raise money for local transportation fairly, they should kick the TDD to the curb and become the eighth city in Missouri to adopt a local fuel tax.

The post Kirkwood Should Consider a Local Fuel Tax to Fund Its Transportation Needs, Not a TDD appeared first on Show-Me Institute.

When troubled or sickly aristocratic English youth needed a place to recuperate in private away from their cruel stepparents, they would go to Secret Gardens, where magic and mystery would solve all of their problems. We don’t need mysterious places to address our transportation needs in Missouri, and most of our “Secret Gardens” are actually illegal meth labs. But, amazing as it may seem, there really is a local transportation funding option that is unknown to most municipal officials in Missouri. Local gas taxes are a little-used yet very efficient method of funding important local transportation priorities for cities like Lake Ozark as it considers ways to improve Bagnell Dam Boulevard and Valley Road.

I know what you’re thinking. If there is tax that most politicians don’t know about, why would you tell them? Our gas taxes are low in Missouri, and Missouri voters clearly like them that way, as attempts to raise our second-lowest-in-the-nation rate have consistently failed at the polls.

That low tax rate has benefits and costs. If you stop at a gas station near the state border, you can’t help but notice the large percentage of license plates from border states gassing up over here in Missouri. Those drivers do much of their driving in other states but choose to give us their tax dollars for Missouri roads.

But the low gas tax has costs, too. Missouri’s roads and bridges could certainly be in better shape. A 2019 report from the Federal Highway Administration ranked our roads as 8th worst in the nation. We don’t want to commit the logical fallacy of drawing causation from correlation, but there might be a connection between those 2nd-lowest taxes and those 8th-worst roads. Even for roads in good condition, increases in population, tourism, and more can burden a system.

The fact is, we need to invest more in our road and bridge system in Missouri, and our local roads are no exception. Local roads are maintained by cities and counties, not the state, and are funded by a mixture of the state gas tax, local property taxes, and sales taxes. Unfortunately, local sales taxes are the mechanism most frequently expanded to fund local roads, and they are the worst option of the three. Funding roads by sales taxes subsidizes the act of driving by charging shoppers in a manner unconnected to driving. Walkers, bikers, or carpoolers will pay just as much as solo drivers for road improvements. People who can drive on roads without directly paying for their upkeep will drive more than they otherwise would, with the resulting extra traffic, pollution, and other road issues.

Ideally, the cost of driving should be connected as closely as possible to the act of driving. Lake Ozark city leaders are currently considering a sales tax-based transportation development district (TDD) to fund improvements to Bagnell Dam Boulevard and Valley Road, both key roads for the region. A better option for funding local roads like these would be a local gas tax. A local gas tax fixes the discrepancies that sales tax funding methods generate and, more importantly, can raise substantial money for road improvements.

Seven cities in Missouri have adopted local gas taxes. By law, the money raised from these taxes can only be spent on roads within those communities. All of the local gas taxes enacted have been very low—none higher than two cents per gallon. Even at that low level, they can raise significant money, but none of these seven cities have the combination of local population and tourism that Lake Ozark has. With those tourists, a local fuel tax of just two cents per gallon could potentially bring over one hundred thousand dollars per year on top of the existing road revenue sources. That money would fund a substantial amount of road improvements for Lake Ozark, all while properly maintaining the connection between the act and cost of driving. Or, if Camden and Miller county leaders have similar concerns, countywide gas taxes could be implemented that would raise even more money.

Lake Ozark is the heart of an area vital to our state. The residents who live there and the tourists who visit need and deserve quality roads. A local gas tax would be an efficient and beneficial way to fund road maintenance and improvement. Community leaders and residents should strongly consider passing one this year. Lake Ozark does not need a hidden code or a secret garden to deal with its transportation issues, just community support to address these key improvement needs.

The post Local Gas Taxes Are the Secret Garden of City Road Funding Options appeared first on Show-Me Institute.

But what many Missourians don’t know (and even many local leaders) is that cities and counties can implement their own fuel taxes to raise money for local roads. Seven cities in Missouri currently use local fuel taxes to supplement what they receive from their distribution of the state fuel tax (cities get about 16 percent of state fuel tax revenue). These taxes raise up to hundreds of thousands of dollars each year and the cost rarely exceeds 1 cent per gallon for drivers.

Here are Missouri’s seven cities with local fuel taxes:

Why should more Missouri localities consider local fuel taxes? The most common method of increasing local road funding is sales taxes levied through transportation development districts. But funding roads through sales taxes is fundamentally unfair—people who use the roads should pay for them. People who drive on roads without paying for their upkeep also have no incentive to reduce their driving, resulting in extra pollution, traffic, and road deterioration.

As my colleague David Stokes and I wrote recently, local fuel taxes do a better job of connecting the act of driving with paying for road upkeep. Buying a gallon of gasoline is more associated with driving—and thus how much damage a car does to the road to necessitate its upkeep—than buying a TV or a loaf of bread. Moreover, the money raised by local fuel taxes is constitutionally required to be spent maintaining local roads.

Local fuel taxes are a secret weapon that cities and counties have for adequately funding their roads. They allow municipalities to raise money for local road maintenance responsibly with little room for playing fast and loose with the money.

The post What to Know About Local Fuel Taxes appeared first on Show-Me Institute.

The city claims it needs $3 million to repair an important local road but lacks the funding to do so. The city’s leaders are considering a transportation development district (TDD) to raise money for the road through an extra sales tax, which would effectively subsidize road maintenance via shopping. My colleague David Stokes has already written about why a TDD is a poor remedy for this problem.

Fortunately, there is a better solution—local fuel taxes. Fuel taxes can be an economically sound and fair way to raise money for roads. They ensure that those who benefit from the roads also pay for them.

As the National Surface Transportation Infrastructure Financing Commission has noted, funding roads through methods not related to their use (such as sales taxes) promotes inefficient vehicle and travel choices. This, in turn, leads to faster road deterioration, wasted fuel, traffic congestion, and air pollution. If the sales tax (via the TDD) is a ploy to get tourists to help foot the bill for road maintenance, it should be noted that the same tourists would also pay the fuel tax. However, fuel taxes connect the cost of driving and the cost of using the roads.

Local fuel taxes allow localities to raise money for roads within their jurisdictions. When enacted, an additional fee is added to the price at the pump in a given jurisdiction. And since the Missouri Constitution requires that money raised from local fuel taxes be spent only on road construction and maintenance, it reduces the risk of this revenue being spent on other, potentially wasteful projects.

One potential challenge is that local fuel taxes can be tough to enact. The Missouri Constitution requires that local fuel taxes be passed with a two-thirds majority among voters. If it chooses to pursue it, Lake Ozark would be one of the first localities in Missouri to enact a local fuel tax. Foristell tried to enact one several years ago, but the measure fell just short with 65 percent voter approval. However, it was able to pass a 1 cent local fuel tax the following year.

Ultimately, before sales or other tax increases, local fuel taxes are an option worth considering as a fair solution to the City of Lake Ozark’s funding predicament.

The post The City of Lake Ozark Should Consider a Local Fuel Tax appeared first on Show-Me Institute.

A recent state audit of TDDs highlights the problems with these districts. Five of the twelve TDDs mentioned in the report collected incorrect tax amounts. I’ll let you guess as to whether they collected more or less than authorized. (Hint—it was more.) Statewide, 92 percent of TDDs have been formed by developers and were not subject to any votes or public involvement. Not surprisingly, when you allow private developers to raise tax dollars for private purposes (like improved parking lots for their own developments) they are going to act like it is private money, not tax money, and often spend it improperly. Audits on these types of special taxing districts by state auditors of both political parties have consistently found that they frequently violate the Sunshine Law, do not competitively bid out contracts, make errors in tax collections, and more. They are designed in the first place to act like fiefdoms, with little oversight of the tax dollars being collected and spent for private purposes by the developers that almost always dominate the board. The problems with these districts are, in fact, so consistent that they must be considered a feature, not a bug.

This proposed TDD will require voter approval in the April 2021 elections. Seeking voter approval here is, obviously, a good choice. However, only voters who live within the TDD itself can vote on the proposal, not all  Lake Ozark voters. I would expect the district to be gerrymandered until it looks like the lake itself in order to limit voter participation and help guarantee passage of the TDD. That is the prior experience in Missouri.

In a news story on the new TDD, supporters cite the “high quality of roads within the Horseshoe Bend Special Taxing District” as an example of why the TDD would be beneficial. The high quality of roads in that district may well be true, but Horseshoe Bend is not a TDD—it is a traditional, property tax-based special road district. The distinctions are important. Special road districts like Horseshoe Bend are subject to voter input, property tax rollback mandates (when assessed valuation increases), and much more comprehensive budgeting and financial reporting requirements. If Lake Ozark residents want better roads along with oversight, transparency, checks, and balances, the creation of a taxing district like Horseshoe Bend is a legitimate option. Other good options include passing a local gas tax to pay for the road improvements or simply raising city or county property taxes to fund the road improvements.

Honesty demands that I admit the Lake Ozark Community Toll Bridge is a TDD and has been successful for the community. In this case, the tolls collected pay for the bonds that built the bridge, and most importantly, the act of driving is connected to the cost of driving. Sales tax TDDs, such as this proposal, do not have that connection.

If people want a new taxing district with questionable dealings, little oversight, and limited voter involvement, then a TDD is the way to go. While Marty Byrde might approve of that, I trust the rest of the residents and taxpayers of the Lake Ozark region do not.

The post Lake Ozark Area Going in the Wrong Direction with Transportation Funding appeared first on Show-Me Institute.

As the process currently works, CIDs and TDDs are approved by a vote of only people within the proposed taxing district. This bill would have subjected CID and TDD approval to a vote of the people in the city in which the district is located. This would have solved one of the biggest problems with these taxing districts: Many are not subject to a broad-based, representative vote for approval. Some districts can even be approved by only a handful of property owners if the district is small enough, yet the costs are externalized to all taxpayers who spend within the district.

As Show-Me Institute researchers have mentioned before, special-taxing districts like these are on the rise. According to financial reports received by the Missouri State Auditor, there are 495 CIDs and 237 TDDs in Missouri. CIDs collected over $56 million and TDDs collected more than $73.5 million in 2018. Hundreds of districts are taking millions away from Missourians, and they may not have had a say in it.

The problems with CIDs and TDDs are clear, and lawmakers should act. There is still an opportunity to give taxpayers increased representation in a special legislative session, but it seems that for now, the problems with CIDs and TDDs will continue.

The post Districts Denied Once Again appeared first on Show-Me Institute.

Show-Me Institute researchers have pointed out numerous problems with these small taxing districts. One big problem is that many of these taxing districts were not subject to a broad-based, representative vote for approval. Previously, these districts could impose a tax on purchases within the district if the tax were approved by voters within the district. However, these districts can be so small that they sometimes only contain one commercial building, which means that a tax could be approved by one commercial landowner’s vote. It’s sometimes the case that these taxing districts are enacted through private interest and increase costs for taxpayers without their permission.

The new legislation attempts to fix that problem, adopting a policy solution that Show-Me researchers have previously suggested. The bill requires that new taxes created by CIDs or TDDs be approved by the majority of the voters within the municipality that contains the taxing district, not just the voters within the taxing district.

This legislation gives voters more of a say when it comes to tax increases and could also increase transparency by bringing tax increases to the attention of the public. If the costs of projects funded by CIDs and TDDs are going to be externalized to taxpayers, it’s only fair that taxpayers get a say in the process. This law gives taxpayers more representation and could help slow the growth of special-taxing districts in Missouri—and that’s a clear win for taxpayers.

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By state law, local taxing jurisdictions can opt out of the annual sales tax holiday. This year, 50 counties, 156 cities, and 90 Special Taxing Districts decided not to give Missouri families a tax break. Of the 90 Special Taxing Districts, 83 were either community improvement districts (CIDs) or transportation development districts (TDDs). But unlike taxes collected by cities and counties, most of these districts’ sales tax revenues help the private interests that set up the districts rather than funding public services. Many of these districts are found in the most popular shopping areas in the state and encompass large retail stores like Walmart and Target. Some examples include the Arnold Retail Corridor, the Delmar Loop, and the Hanley Road Corridor in Maplewood/Brentwood.

These overgrown microgovernments have already taken over a billion dollars in taxes from Missourians to fund the development or redevelopment of commercial districts, with privately owned businesses reaping the benefits. One 3-day weekend without sales tax revenue would hardly put a dent in the millions collected the other 362 days of the year.

Absent any action from a special taxing district’s board of directors, the district, by default, participates in the tax holiday. However, the board of each of these districts—usually elected by a small number of property owners—instead voted to keep charging the district sales tax rather than give Missouri families a break. Unlike state, county, and city sales taxes, the taxes collected from the special taxing districts formed by developers do not contribute to the funding of public services for the average taxpayer. Instead—perhaps due to the lack of accountability and oversight—they go toward subsidies that primarily help big businesses.

So if you found yourself confused by the presence of a tax amount on your receipt this past weekend, thank the misguided laws that govern special taxing districts.

The post Eighty-Three Special Taxing Districts Opted Out of Tax-Free Weekend appeared first on Show-Me Institute.

Because of special taxing districts like community improvement districts (CID) and transportation development districts (TDD), many shoppers pay up to an extra two percent in sales taxes.

Over the past few years, my colleagues and I have written extensively about CIDs, TDDs, and other special districts. In short, most special districts are created by developers to funnel additional sales tax revenues into developments. Most shoppers don’t know about the taxes because they never voted on them and because many businesses in CIDs and TDDs don’t post statutorily required notices.

In a recent paper, Patrick Tuohey and I detailed the growth of these districts and their tax collections. But more recent data on last year’s collections provide even more evidence that CIDs and TDDs have gotten out of control.

The graphs below depict revenues for CIDs and TDDs. From 2017 to 2018. Statewide CID revenues jumped nearly $10.7 million, the single highest year-to-year increase in Missouri’s CID history. Over the same period, TDD revenues jumped a more modest $2.5 million, but are nonetheless at their highest levels to date, at $73.5 million.

In our paper, Patrick and I detail reforms to help curb CID and TDD abuse. I would encourage readers to learn more about them here. Policymakers should recognize the sizable burden these districts place on taxpayers and enact reform sooner rather than later.

The post CID, TDD Collections Jump by More than $13 Million appeared first on Show-Me Institute.