It is sad and shameful to see that the students of the Belton School district, just south of Kansas City, have been getting shortchanged to the tune of $500,000 per year—possibly going all the way back to 1991—because of a procedural error that arose from a tax increment financing (TIF) arrangement in the district. Sad, shameful, and entirely predictable. TIF schemes are complicated endeavors that often span 20-plus years and affect all sorts of tax calculations related to school finance and other city and county services. Too often, citizens are kept in the dark. We at the Show-Me Institute have argued for years that Missouri cities should clearly identify in their financial statements the projects that the city is, and will be, subsidizing. Each city should also be required to publish every tax incentive liability that it has incurred, providing this information either as a part of a city’s financial statement or as an annually produced and readily available separate document. Making these data more accessible to citizens might have led to this mistake being caught years ago. Hopefully this embarrassing incident will be a wakeup call for greater transparency.
Michael Q. McShane, Show-Me Institute Director of Education Policy, St. Louis, MO