TIF Reform Gets a Thumbs Up in House Committee

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Construction in St. Louis' central corridor has still resulted in city schools getting the shaft thanks to tax incentives given to developers. - FLICKR/PAUL SABLEMAN
Construction in St. Louis' central corridor has still resulted in city schools getting the shaft thanks to tax incentives given to developers.
Legislation that could curb some of the most egregious TIF deals made by cities cleared a big hurdle yesterday — the Missouri House of Representatives' Local Government committee.

House Bill 1236 seeks to curb tax incentive financing, also known as TIF, a frequent tool to give developers tax breaks to subsidize their projects at the expense of public schools and city coffers. Such financing has become so widely used on new construction in St. Louis, the city gave away nearly $30 million in revenue last year alone.

H.B. 1236 would limit TIFs to 15 years instead of 23. It would also allow school boards to opportunity to veto the portion of the tax break that affects their coffers — and require that detailed information about the deals is posted publicly a full 30 days before they're up for a vote.

By a vote of 7-3, the bill won support in committee yesterday from both Republicans and some key Democrats. From here, it will go to the Rules committee, and if it can find approval, it'll head to the floor of the House for a vote.

The bill has changed a bit, but not in substance. A compromise won the support of Representative Donna Baringer (D-St. Louis) — now school districts can only block 50 percent of their funds from being given away, not 100.

The bill's sponsor, Representative Dan Stacy (R-Blue Springs), said he's optimistic about its chances from here, and confident the reforms are long overdue.

"It's wonderful where you can get into an area of law that gets at the heart of things that need to happen," he says. "These are not partisan. They're common-sense issues. Now, sometimes interests override the common sense. But I think we've got a coalition together where we have the energy to make common sense prevail."

Indeed, the bill has been backed by both Team TIF, a group of progressive reformers in St. Louis, and the right-wing Show Me Institute, as well as the Missouri School Board Association.

The main opponents? The cities of St. Louis and Kansas City. Even as progressives and school board members within their borders are fighting for the bill, Kansas City says it needs tax incentive financing to compete with municipalities just across the border in Kansas. And St. Louis has said it's a matter of local control. (Never mind that the bill would actually increase local control by giving residents more information of TIF plans and letting school boards weigh in.) Earlier in March, the city actually sent its lobbyist to argue against the bill.

Still, even advocates say the reforms won't be a catastrophic blow to the current system.

Says Stacy, "I don't think it'll be an end to TIFs, but it will change the conversation so only the best TIF projects can go forward."

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About The Author

Sarah Fenske

Sarah Fenske is the executive editor of Euclid Media Group, overseeing publications in eight cities. She is the former host of St. Louis on the Air and was previously editor-in-chief of the RFT and the LA Weekly. She lives in St. Louis.
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