On Thursday, March 4, the Missouri Senate passed Senate Bill 22, which reforms the use of tax increment financing (TIF). Tax increment financing allows a developer to refund or divert a portion of their taxes to help finance their project. Normally, these taxes would have gone to local municipalities to help pay for schools, libraries and other essential city services. To qualify for TIF, the development project must be in an area that is considered “blighted.” Flood plains are considered blighted under current state law, so there is an incentive to develop in these areas despite the potential risks. This legislation modifies the definition of “blighted” so flood plains cannot fall under this designation. As a result, projects in flood plains would not be eligible for TIF.
I believe TIF is essentially a form of corporate welfare, and I want to protect taxpayer’s money in all areas of state government. In some instances, people do not realize their tax dollars are going to private developers that do not need public assistance in the first place. From corporate headquarters and entertainment districts to fancy shopping malls, TIF has earned a reputation as a corporate welfare program.
It is important to note that this legislation does not end development in flood plains, but rather the use of your tax dollars in risky private developments. Incentivizing the use of tax dollars in flood plains is bad policy. It is my belief if a developer wants to gamble and build in a floodplain, they should assume all of the risk — not taxpayers.
Senate Bill 22 now heads to the Missouri House of Representatives for consideration. I have been working on this legislation for several years now, and I am confident we will finally pass this important reform so your tax dollars will not continue being washed down the river.