St. Louis Public Schools Lose More than $200 Million to Tax Abatements

May 10, 2024

In the past seven years, St. Louis Public Schools (SLPS) have lost more than $200 million to corporate tax abatements. In fiscal year 2023 alone, the school district lost $34.3 million – or nearly $1,750 per student. For context, the district spent $31 million on food and community services in the same year.

Empty classroom, full of desks
Photo by Pixabay, via Pexels

Tax abatements show no sign of slowing down, further harming thousands of students every year. SLPS’ losses grew by 8% from 2023 to 2022. At the same time, the district has more than 3,000 unhoused students.

In 2023, the largest loss came from Tax Increment Financing (TIF), a controversial economic development program created to improve “blight,” a dubious definition that in St. Louis has led to the development of luxury housing and high-end hotels. The program cost SLPS $13.5 million in 2023.

Earlier this year, Good Jobs First reported that SLPS lost more than any other school district in the St. Louis metro area, both on a total-dollar and per-student basis. The study looked at the 24 school districts in St. Louis City and St. Louis County from 2017 to 2022. In total, these districts lost hundreds of millions to costly tax abatement and subsidy programs, revenue that could have gone to teacher pay, improved facilities, and community programs.

We also found that the distribution of tax abatement losses was incredibly uneven, and disproportionality harmed low-income and Black and brown students. SLPS, a district with a large minority and low-income student population, lost far more than any other school district, $167 million in only six years, or $1,634 per student per year.

The newly released FY23 data, available to the public thanks to a relatively new accounting rule, show the district’s revenue losses are continuing to climb.

The rule – Governmental Accounting Standards Board Statement No. 77 on Tax Abatements – requires most government bodies in the U.S. – including independent school districts – to disclose how much revenue they lose to economic development tax abatement programs.

For school districts, these are often “passive” losses, or foregone revenue caused by tax-break deals awarded by other governments, including cities, counties, or even the state itself. For SLPS and other Missouri school districts, all the money lost is caused by awards made by cities or counties. The school districts have no say.

It’s a highly undemocratic way of policy making – can you imagine the outcry if the school district could unilaterally take money from public safety or sanitation?

There is a fix for this. SLPS’s school portion of tax abatements could be taken off the table, so any agreement leaves its funding alone. Shy of that, school boards should get a vote to control their share of the tax revenue.

A longstanding body of scholarship tells us: great public schools are a cornerstone for successful economic development while corporate tax breaks generate few new jobs in a community; they often pay a company to do what it would have done anyway; and the subsidies benefit big developers and companies while small businesses suffer.

Properly resourced schools have been proven time and time again to improve students’ educational outcomes, but improvements cannot occur when districts lose money every year to abatement programs in which they have no say. Students deserve fully funded public schools, which means reining in costly subsidy programs.

GASB 77 data is compiled in our database, Tax Break Tracker from Annual Comprehensive Financial Reports. When available, we collect these entries from each state’s government, along with the five largest counties, cities, and school districts.