Some communities in Saint Louis County are attempting to alter the sales tax distribution system within the county and greatly reduce, or eliminate, the pooled sharing of sales taxes among municipalities. The thinking is that a city somehow deserves all the sales taxes collected within the city just because the shopping center happens to be there.
As the members of this committee are well aware, Saint Louis County has 90 municipalities for 1 million people. That is among the highest per-capita rates of municipal governments for any large county. By comparison, Jackson County (Kansas City) has just 18 municipalities for approximately 700,000 residents, and Jackson County’s rate is average, not low, by national comparisons. With so many cities and counties imposing various sales taxes, tax competition can be a major factor in Saint Louis and throughout Missouri. Competition is good, but as with many things, it can be taken too far. When it comes to municipal sales tax competitions (i.e., Tax Increment Financing, TIF), Missouri has gone too far. The sales tax pool system in Saint Louis County has been one way to address that problem. The elimination of the pool would make the overall problem of incentive abuse worse, not better, for taxpayers.
Read the full testimony: Take This TIF And Pool It!
