Tax increment financing is a popular and often-used economic development tool that unfortunately is being used and abused to the detriment of taxpayers in many 最新杏吧原创 municipalities.
There is no shortage of economic impact studies from across the political spectrum supporting in the 最新杏吧原创 region. They correctly conclude that, most of the time, the only winners are developers of suburban box stores who get to defray costs and risk at taxpayers鈥 expense.
A TIF is a legitimate and even laudable way to subsidize development and stimulate investment, especially in struggling areas where developers are reluctant to go. The municipality typically freezes property taxes for the development area and issues bonds to fund the project. The bonds are backed by anticipated growth in the property鈥檚 value or sales tax revenue.
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In Missouri, TIFs can help fight blight, aid conservation, foster economic development or a combination of the three. The oversight structure can break down, however, when TIF commissions, which weigh the merits before voting on proposed tax incentives, can be overridden by the city councils whose jurisdictions are affected.
The commissions represent libraries, fire, ambulance and school districts that stand to lose future revenue to finance developments. In 最新杏吧原创 and St. Charles counties, municipal governments routinely overturn commission decisions because communities are fighting one another for potential revenue.
, R-Manchester, has introduced a bill to limit the problem. His bill, , would only allow a municipality to subsidize the cost of demolishing buildings and clearing land if a TIF commission rejects a proposal.
The Legislature should approve this measure. It鈥檚 one way of weaning cities from their greedy tendency to use TIF incentives to rob each other of employers and development projects, while leaving taxpayers footing the bill for the concessions needed to make the deal happen.
Previous TIF reform efforts have failed in the Legislature, beaten back by developers. Koenig told the Post-Dispatch鈥檚 David Nicklaus that he鈥檚 optimistic this time, having won support from Schnucks supermarkets and the Missouri Grocers Association.
We鈥檇 like to see Koenig鈥檚 bill become a springboard for real overhaul, which would include making TIFs available only in blighted, low-income areas where they鈥檙e truly needed. Does Maryland Heights really need the TIF sought by Stan Kroenke and a business partner for a retail project?
It鈥檚 time for a skeptical review of various development-inducement strategies. A new study by the left-leaning shows that financial enticements to lure out-of-state companies don鈥檛 lead to significant job creation. New and homegrown companies account for 87 percent of jobs created, the study says.
The conservative also has raised concerns about the raw deal that taxpayers get from many of these arrangements. Clearly, it鈥檚 time for reform.
