Transportation development districts that impose taxes without voter approval are growing in number and operating with little government oversight, according to a July 25 report by State Auditor Susan Montee. At the end of 2006, 120 districts had been established, nearly 70 percent of them in the St. Louis and Kansas City areas. They are expected to collect more than $1 billion combined over the five- to 40-year duration of their taxes.
Under a 1997 state law, developers can ask a judge for approval to set up a special taxing district, which levies sales taxes at retail businesses within a development. The proceeds are supposed to be used to pay for infrastructure at the development.Problems Montee’s report identified include a lack of competitive bids for taxpayer-funded projects, improper documentation of developers’ costs and districts charging higher tax rates than authorized.
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