Audit: Unaccountable tax districts rack up $1 billion Missouri taxpayer debt

Posted at 6:57 PM, Apr 11, 2017
and last updated 2017-04-12 09:01:05-04

Missouri taxpayers are on the hook for nearly $1 billion.

It's for sales taxes they did not approve or likely even know about.

Missouri State Auditor Nicole Galloway looked at Transportation Development Districts or TDDs.

The idea behind TDDs, like ones currently in place in Cass and Jackson counties, are to help local communities with transportation projects for public benefit.

Instead, Galloway said most of those taxing districts have become slush funds for developers with no accountability or transparency.

Specifically, she found state law allows business owners and developers to create and manage the TDDs and then profit from the money collected.

Under Missouri law, businesses charging an extra TDD sales tax must post it at the cash register.

But Galloway found most of the businesses weren't telling their customers about the extra tax.

"Insiders have rigged the system against Missourians to take advantage of them," Galloway said. "It is outrageous that taxpayers are on the hook for nearly a billion dollars in debt without them even realizing it...and it's all allowed under the law." 

Galloway also found people in Missouri are being taxed with TDDs long after projects have been completed and paid for.

"There's no accountability for what these public dollars are being spent on and that's why it is so troubling," she said.

Galloway is calling for a total overhaul of Missouri law to address TDD issues.

She also acknowledges with the current General Assembly session winding down, any changes will likely have to wait until next year.