Though this year’s legislative session was a little different than most, Missourians did get some legislative wins. A provision in House Bill 1854 is one of those wins. Amongst various other things (some good and some not so good), the bill includes important reforms for community improvement districts (CIDs) and transportation development districts (TDDs).
Show-Me Institute researchers have pointed out numerous problems with these small taxing districts. One big problem is that many of these taxing districts were not subject to a broad-based, representative vote for approval. Previously, these districts could impose a tax on purchases within the district if the tax were approved by voters within the district. However, these districts can be so small that they sometimes only contain one commercial building, which means that a tax could be approved by one commercial landowner’s vote. It’s sometimes the case that these taxing districts are enacted through private interest and increase costs for taxpayers without their permission.
The new legislation attempts to fix that problem, adopting a policy solution that Show-Me researchers have previously suggested. The bill requires that new taxes created by CIDs or TDDs be approved by the majority of the voters within the municipality that contains the taxing district, not just the voters within the taxing district.
This legislation gives voters more of a say when it comes to tax increases and could also increase transparency by bringing tax increases to the attention of the public. If the costs of projects funded by CIDs and TDDs are going to be externalized to taxpayers, it’s only fair that taxpayers get a say in the process. This law gives taxpayers more representation and could help slow the growth of special-taxing districts in Missouri—and that’s a clear win for taxpayers.