Tax Increment Financing Reform

Missouri needs TIF reform. House Bill 914 is an important step in that direction. The combination of a very large number of local governments and the inclusion of sales taxation in Missouri TIF law has been a dangerous mixture. By one measure, Missouri local governments use TIF more than all but two other states.1 Missouri’s many cities have readily engaged TIF in order to increase the sales taxes they collect, while leaving other taxing districts, such as school districts — who depend more on property taxation — holding the empty bag. Originally intended (perhaps farcically) as a treatment for “blight,” TIF has been aggressively used throughout Missouri’s wealthier areas. The constant quest by cities to give away more tax incentives in exchange for new sales tax dollars has had a dramatic impact on Missouri.