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Tax Increment Financing (TIF) – Who should Have the Final Say?
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This Discussion Guide is part of Community Conversations at FOCUS St. Louis.  It is meant to initiate civil discourse around the policies that affect the St. Louis region; to hear each other’s perspective. As is the case with all public policies, this issue is complex and multi-faceted, with many stakeholders. Please keep this in mind as you discuss tax increment financing in your community. 
Tax Increment Financing (TIF) – Who should Have the Final Say?

Last spring, officials from St. Louis and St. Charles counties pushed for changes in state law that would give more control to voters and less to municipalities over the issuance of lucrative tax increment financing (TIF) benefits. None of the proposed bills passed into law.

Currently, any project receiving TIF support in St. Louis County or St. Charles County needs to be reviewed by a County-level commission, and approved by the local municipal council. The County-level commission is a requirement introduced into law in 2008 in an attempt to ensure that TIF-supported projects are not only good for the local municipalities, but also are not harmful to other taxing entities or municipalities in the region. However, if the County Commission votes against a TIF, a municipality can overturn a negative recommendation with a "super majority" of council members or aldermen.

Each County TIF Commission has six members appointed by a county executive, three members appointed by local municipal officials, two from school districts and one from a taxing jurisdiction such as a fire or library district.

The legislation introduced last spring would curtail city council authority to pass TIF proposals over the objections of County TIF commissions.  According to one of the pending bills, a TIF commission's rejection could be overridden only by two-thirds of the voters in the taxing districts.

The debate over TIF in the St. Louis region has been long and robust. Supporters say it's an essential tool to finance urban redevelopment. Critics agree, but say that it is too often misused to pay for shopping centers in affluent communities.


There are three cities in St. Louis County that have drawn the most attention to the issue of TIF recently. In July, Maplewood approved TIF incentives to help the developer of the struggling Deer Creek Center even though a TIF commission opposed the project.

In Bridgeton, a Walmart is under construction even though the Bridgeton TIF commission recommended against giving a $7.2 million tax subsidy to the developer. The City Council voted 6-1 to overturn the commission's recommendation. Bridgeton Mayor Conrad Bowers says city governments should have the final say. "Cities have a legitimate right to do what they think is in the best interest of their community and it certainly was in our best interest to keep Walmart in the City of Bridgeton," Bowers said. The TIF-assisted Walmart set to open this summer will replace a Walmart that lies primarily in Bridgeton but is partly in St. Ann. If that store had closed and re-opened elsewhere, Bowers said, "We would have taken a real hit."

In Ellisville the City Council approved an $11 million TIF request by Sansone Group to build a $49 million Walmart at Manchester and Clarkson-Kiefer Creek roads. The TIF Commission opposed this TIF subsidy, and there was considerable local residential opposition as well.

St. Charles County has had only one TIF Commission since the 2008 law. It recommended against a request by DESCO Group for a $9.6 million TIF for a Schnucks-anchored commercial complex near Lindenwood University. In June 2012, the St. Charles City Council voted to approve the TIF subsidy.

Much of the discussion about TIFs takes place within the larger context of public subsidies for private developments, especially retail developments. In 2011, the East-West Gateway Council of Governments issued a report detailing more than $5.8 billion in development subsidies, largely to build retail spaces. The report concluded that the subsidies largely do not add jobs or significant economic activity to the region, but instead, serve largely to relocate retail outlets from one location to another. 

Who else is involved with this issue?

The St. Louis County Municipal League and the Missouri Municipal League are both heavilyinvolved with this issue and oppose any bill to take away municipal control. Most local municipalities in the region also oppose these efforts.

St. Louis County and St. Charles County governments favor the more rigid regulations. The Show-Me Institute, not in favor of TIFs under any circumstances and, citing a negative relationship between TIF adoption and growth, also favors these tougher regulations for adopting TIFs.

Three Possible Perspectives:

Person A believes that state law should be amended to keep city councils from overturning TIF Commission recommendations. "Trading” Walmarts is not a good economic development strategy and is harmful to the region.

Person B thinks the law is okay as currently stands. As Mayor Bowers indicated, city governments should have the final say. The proper checks and balances are in place with the super-majority requirement. 

Person C believes there could be a compromise to this dilemma, perhaps by imposing certain restrictions if a TIF proposal is overturned by a city council. This keeps the ultimate decision in the local government’s hands while satisfying some members of the TIF Commission that voted against the plan.

Discussion Questions:
  1. Which of the three people in this scenario do you most closely align with A, B, or C?  Why?
  2. Should this issue be entirely within control of the local government?
  3. Is it possible to compromise on this issue? Cities in the St. Louis region rely heavily on retail tax revenue to survive- is there a regional answer, at least one that cities will support?
Links for further reading:
  1. January 26, 2011 St. Louis Post-Dispatch article: Report: $5.8 billion in development incentives net little for St. Louis region.
  2. November 11, 2011 St. Louis Post-Dispatch article: St. Charles TIF panel declines to back Schnucks project subsidy.
  3. March 7, 2012 St. Louis Post-Dispatch editorial: TIF commission on right track in denying Ellisville subsidy.
  4. March 12, 2012 St. Louis Post-Dispatch article: Some officials in St. Louis area want TIF restrictions.
  5. March 14, 2012 St. Louis Post-Dispatch editorial: Giving TIF commissions more power protects voters.
  6. March 15, 2012 St. Louis Post-Dispatch article: St. Louis developer offers plan to revamp Northwest Plaza.
  7. March 22, 2012 St. Louis Post-Dispatch article: Ellisville council delays vote on proposed Walmart.
  8. May 3, 2012 St. Louis Post-Dispatch article: Ellisville approves TIF funding for Walmart.
  9. January 20, 2011 East West Gateway Council of Governments Final Report: An Assessment of the Effectiveness and Fiscal Impacts of the Use of Development Incentives in the St. Louis Region.
  10. March 5, 2012 Show-Me Institute: Testimony Before the St. Louis County TIF Commission on the Proposed Ellisville TIF
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