JEFFERSON CITY, Mo. -- Special transportation tax districts are proliferating around Missouri, generating a projected $800 million in taxes -- often without a public vote or even public awareness, State Auditor Claire McCaskill said Wednesday.
"For a state that prides itself on voter approval of tax increases, this is a unique situation and one that bears a lot of scrutiny," McCaskill said.
Transportation development districts are allowed to charge special taxes -- typically sales taxes at retail businesses -- to help pay for the construction of roads, bridges or other transportation infrastructure needed for the developments.
None existed until 1997, when legislators amended state law to allow property owners to seek the creation of tax districts whose boundaries included no registered voters, McCaskill's audit said.
From 1997 through 2004, 69 transportation tax district were created, 66 of which were at the initiative of the landowners. A court approves the organization of such districts, then the district's landowners serve as the voters to authorize the special tax. The sales taxes now in place range from one-eighth cent to a full penny on each dollar.
McCaskill's audit found that in the 66 districts established at the request of landowners, 60 included four or fewer property owners.
"Bottom line: A developer in this state can go to court and form one of these districts, and without any input or oversight or accountability from the public -- or from any elected official -- they can increase taxes," she said.
McCaskill's audit suggested legislators should consider enacting more public awareness, accountability and compliance requirements for transportation development districts.
Some of those suggestions are similar to provisions in an unsuccessful bill last year, including the publication of newspaper notices when court petitions are filed to create the districts. Among other things, those notices would have included the amount of tax being proposed.
Public notice of the extra tax also could be provided at the businesses in the district, McCaskill said, and some form of independent oversight should be required of the districts' project costs before they are paid from the tax revenues.
Senate Transportation Committee chairman Bill Stouffer, R-Napton, said he sees no urgency to pursue legislative changes, but would look into McCaskill's suggestions.
"For the most part, this is a good way to develop communities and develop infrastructure," Stouffer said. But "I do see there might be a need for more oversight."
House Transportation Committee chairman Neal St. Onge, R-Ellisville, said he had not seen the audit but would look into allaying McCaskill's fears. Providing additional public notice sounds like a reasonable step, he said.
Additionally, "we do need to make sure developers and property owners aren't making a windfall profit off these things," St. Onge said.
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