TIF reform could lead to fairer taxes in Missouri
The Kansas City Star
Raytown Superintendent Allan Markley has peeled back the lid on a subject that many mayors and development lawyers don’t want opened up in Jefferson City.
Markley is talking to state legislators about how to reform Missouri’s tax increment financing policies, which cities have used for years to finance a wide variety of projects.
Under current law, the cities control the process. They usually have the most votes on the TIF commissions that review projects, and final decisions rest with elected city officials.
Essentially, state law allows cities to divert millions of dollars in future public revenues from other taxing jurisdictions — such as counties, schools and libraries — to help complete the projects the cities want.
Markley is upset, and rightfully so, that Kansas City wants to take up to $13 million in school district funds created in the Winchester Center TIF district. Much of that money would be used to help build an expanded youth soccer complex in Swope Park.
Under the city’s plan, Jackson County, the Mid-Continent Public Library and other taxing jurisdictions also would lose money that normally would provide services to their patrons.
“This is a poster child for TIF reform,” Markley told The Star earlier this month, pointing out that all taxing jurisdictions except the city oppose using their money on the soccer fields.
Among the superintendent’s excellent reasons: The fields wouldn’t even be built in the 8,550-student Raytown School District; they would be in the Kansas City Public Schools’ portion of Kansas City. The plan is set for a January vote in the TIF Commission.
Markley is hardly alone in opposing the stranglehold cities have on the TIF process.
North Kansas City School District officials earlier this year voted against North Kansas City’s plan to divert millions in educational funds for a mostly residential development.
Webster Groves School District officials in the St. Louis area last week said they will oppose giving $1.5 million of their educational taxes for a CVS store.
State Sen. Will Kraus, a Lee’s Summit Republican, said Friday he’s taking a look at TIF reform language discussed with Raytown School District officials. It would prohibit one taxing jurisdiction’s funds from being spent in another jurisdiction, as has been proposed by Kansas City officials in Swope Park.
This could be an excellent reform, something the Missouri legislature should approve in 2013. But how far could lawmakers go in changing other parts of the TIF statutes?
Mayors and others have pressured lawmakers for years to keep their hands off TIF laws. However, 2013 might see a change in attitude by conservative Republicans looking for ways to streamline the tax system.
Lawmakers should examine ways to eliminate aspects of TIF laws that selectively award public subsidies to private companies. The goal should be to ensure that everyone pays their fair share of taxes.
Another more drastic change would enable all taxing jurisdictions to opt out of allowing some or any of their funds to be used for a city’s tax increment financing plan.
Jurisdictions such as schools, counties and libraries might have more votes on the TIF panel. If the city came forward with a truly good project, no problem: It would proceed as normal. But taxing jurisdictions didn’t like the project, they could have better control over allowing their funds to be plowed into it.
Reform won’t be easy. Missouri Municipal League officials said last week they oppose most changes. So do lots of development lawyers and mayors. But the TIF process has flaws, and they should be dealt with in 2013.