ST. LOUIS • Transportation development taxing districts in Missouri are riddled with conflicts of interest and have no oversight to prevent self-dealing, state Auditor Nicole Galloway said Monday.
Many of them also appear to be in violation of state law when it comes to businesses failing to notify the public of special sales taxes being collected, Galloway said.
“A lot of this isn’t illegal, but it should be,” Galloway said at a news conference at the Wainwright state government building in downtown St. Louis.
The conflicts of interest generally involve district board members being allowed to vote to award themselves contracts for construction development, as well as approving the payments of those contracts. The law does not require the districts to put such contracts out to bid publicly.
“The General Assembly needs to completely overhaul these laws,” Galloway said. “The law as it exists allows for these things to happen.”
Galloway said transportation development districts are the only such political subdivisions in the state in which these conflicts of interest aren’t prohibited by state law.
More than 100 districts out of 205 responded to an auditor’s request for documents for this study, Galloway said. In each of them, at least one business collecting the special sales tax did not provide information to customers that the tax was being charged.
In 2015, the state collected $73 million in TDD sales taxes that were then remitted back to the taxing districts.
Transportation development districts are one of several types of special taxing districts that have become increasingly popular statewide and in St. Louis. Activist and research groups, such as the East West Gateway Council of Governments, have for years been calling for reforms to TDDs as well as community improvement districts —…