Apparently, under Missouri law municipalities can establish community improvement districts (CID). Things like sales tax increases in the CID can then be voted by the registered voters living in the CID. If there are no registered voters in the CID measures are instead voted on by those who own property in the CID.
Representatives of the Business Loop 70 Community Improvement District carefully drew the boundaries of a new CID so as to include no registered voters and had this plan approved by the Columbia City Council.
The problem? They missed one voter, Jen Henderson, a 23 year-old college student. She is now the sole eligible voter in a proposed August election to enact a half cent sales tax in the CID.
I’m not even taking sides in this story, but I am curious to see how it turns out.
If I’m following this correctly, the property owners–which is to say, businesses, because as far as they knew, there were no residents–planned some stuff to benefit their businesses. They approved a property tax to pay for a little of it. Then they decided to make their customers pay the rest via a sales tax (which the businesses would get to vote on, but not the customers).
Now, functionally, that doesn’t seem so different from raising their prices a tiny bit, and putting the difference into a common fund to pay for the improvements. Or, if it has to go into government coffers for the project for some reason, increase the property assessment and raise prices just enough to pay it. So, why all the gerrymandering shenanigans?
Prices are generally quoted pre-sales-tax and are often not subject to actual change; plenty of people would notice if prices were raised to cover increased property tax, whereas raising sales tax rates allows you to raise prices without really raising prices.
Also, from what I read, she is a live-in night manager or something at a medical center, and moved in between when the district borders were drawn and when eligibility to vote was determined. It seemed like a fool-proof plan, but they missed a detail about the possibility of someone establishing residence somewhere that no one had previously.
Right. If the sales tax goes up, you just blame it on the city. Most people won’t know that the taxes were the idea of the businesses themselves.
It doesn’t say exactly what these “improvement projects” are, and apparently they didn’t want to reveal them to Henderson. That would be the straightforward way to handle the situation. Sell her on the value of the improvements, so she votes “yes.” Just looking at the district, one has to wonder what it is they want to do with the sales tax money (apart from paying off the CID’s own administrators.
She lives only a hundred or so feet from some homes that were gerrymandered out. Maybe she should see what they think.
Sounds like the should have just made a merchant’s association with dues, assuming that’s legal in their area. One of their costs seemed to be for an ad campaign.
Yeah, they’ve got legal fees also. And a line of credit. And paying the people who are employed by the district. The article is a little short on reporting of what the district actually intends to do with the money besides paying for all this, possibly because the district doesn’t know either.
It’s sort of amusing, really, because it’s a miniaturized version of what goes on in larger cities, with no one batting an eye at all. City councils are constantly fostering these types quasi-political jurisdictions, or development deals, and they always come with huge staffs of administrators who just seem to have lifetime careers doing these things. It’s a whole industry apart from the government itself. This is small-time in comparison, but that just makes it easier to evaluate if it’s really serving a purpose or not.
Couldn’t they businesses just pay a bunch of employees to relocate to district so register to vote in the election? Isn’t that was Disney does with the Reedy Creek Improvement District?
To be picky, there are two districts being talked about. There’s the group of related businesses in that physical location (BG) and there’s the improvement district (CID), which is supposed to be doing things to benefit the BG. I assume that the quote saying that the district won’t be viable without more cash is referring to the CID, not the BG. If the CID is ineffective, it won’t matter to the BG that the CID becomes unviable.
I don’t know of any local improvement districts that have people on salary, but then the only ones I know about are for lighting (the neighborhood wants fancier streetlights) or greenbelt maintenance. City workers do the maintenance and send out ballots to property owners every five years to confirm that the majority of them still want to pay their assessments. There could well be other districts with staff that I just haven’t run across. This district, like I said, sounds more like a merchant association.
By doing it this way, the funding these ‘improvements’ comes from the city government selling bonds, which are (eventually) paid back from that sales tax increase.
Government bonds are generally exempt from at least local & often state taxes, so they can be sold at a lower cost. Also, often they are backed not just by that sales tax increase, but fall back on the ‘full faith & credit’ of the city government – another reason that keeps the cost low. A “common fund” fo a group of businesses would not have any of these advantages.
The work itself may be done thru city bidding processes; volume discounts there may result in bids coming in cheaper. Also, some states allow city governments to be exempt from paying state sales taxes on such improvement projects.
And if you’re real sharp about this, you might find some way to get Federal money for part of this city-government infrastructure project.
There’s lots of reasons to try to hide this as a city project rather than just an association of businesses.
Wasn’t the whole point to transfer a cost from the merchants to their customers?
Yes. Much U.S. governance is designed to transfer money from lower classes to the powerful, as can be seen if one opens one’s eyes. This extreme example should be viewed as a demonstration of that, rather than as just an amusing anomaly.
Well, the customers are going to pay for it one way or another. The only difference is that a property tax would have to be paid for by cutting profits (boo!) or explicitly charging higher prices (which would put the onus on the business owner), while a sales tax would appear as a separate line item that most customers would blame on the local government.
Yeah, I don’t really understand this, and I have no objection in principle to a 0.5% tax rise, but…I want to see her vote no just for the wailing and gnashing of teeth and laptops thrown halfway through drywall.
And y’all know what prolly escalated getting in touch with Miss Henderson from “difficult” to the level of “nearly impossible”? The fact that she was at the meeting.
Wasn’t the whole point to transfer a cost from the merchants to their customers?