Regardless of enhancements, the lax district oversight is costing Missouri taxpayers Missouri

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 Despite improvements, the lax district oversight is costing Missouri taxpayers Missouri

(The Center Square) – The same Wayfair Tax bill that made Missouri the last state in the country to amend laws to collect online sales tax included tax provisions that pertained to CID, redevelopment districts, and redevelopment districts Increased Tax Financing Impact (TIF) districts.

Senate Act 153Pending signature by Governor Mike Parson, the CIDs must include the anticipated funding sources and the terms of such funding in their five-year plans and limit their duration to 27 years.

SB 152 Mandates CIDs submit annual financial reports, meet state standards for competitive offers on contracts, and require at least one independent member on district boards.

CIDs are special districts that finance projects such as land acquisition, infrastructure improvements, corporate loyalty and capital improvements through a special sales tax, assessment, fee or property tax.

As of December 31, 2017 according to a community improvement district dated August 2018 report Missouri State Chartered Accountant Nicole Galloway had 428 CIDs in the state with annual sales of more than $ 74.3 million.

Galloway found in her audit that lax CID oversight has enabled “spending decisions to be made by those who benefit most,” and found that taxpayers were willing to pay US $ 2.2 billion in sales tax -Dollars to be paid for projects coordinated by the 428 CIDs.

“State law allows a CID to be formed and taxes and duties to be introduced without adequate public scrutiny or protection,” wrote Galloway. “State law allows CIDs to overwhelm the public and to transfer the excessive taxes to the parties to the conflict. The annual reports on nationwide CID sales tax collections and distributions published by the Treasury Department (DOR) do not include taxes that are distributed to all counties. “

The growth in the number of CIDs and TDDs across the state since the 1990s has alarmed financial conservatives for a decade.

Economists like those at the Show Me Institute cite inconsistent reporting, lax rules, and the lack of a central database as easily manipulable flaws that make the state’s 600+ CIDs and TDDs “practical, legal tools for targeting tax revenues to private projects. ”

SB 153 helps provide additional transparency about specific district spending, but does not go far enough, writes David Stokes, director of local politics for the Show Me Institute, in an article in a Blog Post.

“We need far greater voter participation, stricter reporting requirements, stricter spending limits, and overall tax caps, to name just a few possible improvements,” writes Stokes. “The most important thing we need is to require an entire city (or county for unincorporated areas) to vote to approve all new CIDs and TDDs. Without major reforms, these particular tax districts will continue to be just the big tax and spending fraud in Missouri. “

The latest confirmation that CID and other special expenses for districts need more scrutiny comes from the City of Kansas City Auditor’s Office, which released an audit in April that found that the city council has approved 77 CIDs since 2002, of which 74 still levy a sales tax on existing sales, with nearly 60% being “CIDs with a single beneficiary” and nearly half overlapping with one or more other economic development districts.

The auditors concluded that the “Kansas City review process does not critically assess the public benefit, purpose and plan of the proposed district, and the impact on sales tax charges (whether it overlaps with other economic incentives)” and with the objectives the city is consistent.

The audit also found that a third of Kansas City CIDs did not submit a proposed budget and more than 25% did not submit an annual report as required by state law. The city also failed to monitor the CID reporting status as required, according to the report.