Officials from ºüÀêÊÓƵ and St. Charles counties are pushing for changes in state law that would give more control to voters and less to municipalities over the issuance of lucrative tax increment financing benefits.
Bills pending in Jefferson City could curtail city council authority to pass TIF plans for Walmarts and other projects by giving the public a vote on the proposals. The votes could involve school, fire and other districts and sometimes the entire county.
The county leaders contend that the otherwise estimable theory behind TIFs — that they bring development and jobs to troubled neighborhoods — has been hijacked in favor of an every-municipality-for-itself pursuit of tax revenue.
They cite a Walmart project under way in Bridgeton and expected overrides by city councils in Ellisville and Maplewood in favor of TIFs for retail developments as evidence that the law needs to be changed.
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Four years ago, the Legislature changed the makeup of the local commissions that rule on TIF proposals. The law requires county executives in ºüÀêÊÓƵ, St. Charles and Jefferson counties to appoint six members of the 12-member commissions.
The change in 2008 was intended to prevent municipalities from grabbing private retail developments from one another, thereby simply shifting the tax revenue around the county.
But if those commissions reject a proposed TIF, a city council can override that decision.
Last week, a House committee endorsed a bill to change that. Its backers say they are hopeful for its passage this year. According to that bill, a TIF commission's rejection could be overridden only by two-thirds of the voters in the taxing districts.
St. Charles County Executive Steve Ehlmann, long an opponent of the way some TIFs have been used, testified last week in the Legislature on behalf of changing current law.
"We think we're winning in the court of public opinion," he said. "We think people are finally realizing what's going on (and that) government shouldn't be picking winners and losers."
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.
The Ellisville City Council is poised to vote March 21 to overturn a TIF commission recommendation against an $11 million TIF request by Sansone Group to build a $49 million Walmart at Manchester and Clarkson-Kiefer Creek roads. Sansone also has requested $4 million in other tax-supported financing mechanisms. Mayor Matt Pirrello, a strong supporter of the TIF project, said there are enough votes on the City Council to support the TIF.
In Maplewood, the City Council is expected to proceed with TIF incentives to help the developer of the languishing Deer Creek Center. A TIF commission opposed it.
Currently, each TIF commission has six members appointed by a county executive, three municipal appointees, two from school districts and one from a taxing jurisdiction such as a fire or library district.
A municipality can overturn a negative recommendation with a 'super majority" of council members or aldermen. For example, in Ellisville, five of seven council members would need to vote yes on the Walmart TIF request for it to pass.
TIF incentives allow developers to divert part of the new local tax revenue that a development generates to pay for development-related costs. Local governments and schools receive the same base taxes as before, but forgo part of the revenue generated by the development for up to 23 years.
Supporters say the long-term benefits are great.
In some cases, TIF commissions and city councils or boards have been on the same page.
Thomas Curran, director of intergovernmental affairs for ºüÀêÊÓƵ County, emphasized that the intent of the new state legislation is not to stop TIFs altogether. In some blighted areas, a TIF may be needed, Curran said.
"I don't want people to think this would be the end of TIFs," Curran said. "Hopefully, people would view it as the greater community being truly involved in the TIF decision-making process."
MUNICIPAL OPPOSITION
The ºüÀêÊÓƵ County and state municipal leagues oppose any bill to take away municipal control.
Ellisville Mayor Pirrello said the proposed Walmart Super Center is expected to bring in $600,000 a year in tax money to Ellisville, money that he said the city needed to pay for services.
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."
He noted that the site of the new Walmart was a building that had been vacant for years.
Tim Fischesser, executive director of the County Municipal League, has testified against the bills in the Legislature, saying that the TIF money helps to revitalize once-occupied properties that are abandoned.
In most cases, "the cities wouldn't be trying to do these incentives if they weren't dealing with abandoned properties and trying to get something back on the tax rolls," he said. "I'm frustrated that critics won't come forward with constructive suggestions for renewal that needs to be done."
He said a bill requiring countywide elections on TIFs would kill the projects.
"The cities couldn't afford to pay for countywide elections," Fischesser said.
He pointed to a regional study that found that TIFs and other incentives have produced 5,400 net new regional jobs.
However, that study, conducted by East-West Gateway Council of Governments in 2009 and expanded on in 2011, was sharply critical of the way TIF is generally used. The study found that TIFs create only one retail job for every $370,000 in taxpayer subsidies.
All three pending state bills, which are almost the same, were introduced by St. Charles County legislators.
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.
The St. Charles City Council has not yet voted on overturning that recommendation, but the mayor has indicated the required two-thirds majority is there.
Since the 2008 law took effect, TIFs granted in ºüÀêÊÓƵ County have included the Bridgeton Walmart, a local small business in Valley Park and a mixed-use planned development known as Kingsland Walk in a poorer area of University City.
In University City and Valley Park, the TIF commission and local government both supported the projects.
Glenn Powers, planning director for ºüÀêÊÓƵ County, said that even if the 2008 law has not been perfect, "it has given us the bully pulpit to raise the issue of whether we're just using taxpayer dollars to subsidize moving around sales tax revenue from one municipality to another, or whether we are creating developments that bring in new tax revenue."
Mark Schlinkmann of the Post-Dispatch contributed to this report.