Reason Magazine: St. Louis Schools Lost $260 Million to Economic Development Subsidies
From Reason:
Governments love to give out taxpayer money to private companies in an attempt to spur economic development. But what about the state and local agencies who miss out on that revenue? A new report suggests that schools bear the brunt of the loss.
The Governmental Accounting Standards Board (GASB) is a private independent organization that “establishes accounting and financial reporting standards for U.S. state and local governments.” One such recommendation, issued as GASB Statement No. 77, “requires state and local governments to disclose key information about their tax abatement agreements,” in which state and local governments agree to reduce an individual person’s or company’s taxes, typically in exchange for some sort of economic development project.
Good Jobs First, a nonprofit organization that supports transparency in economic development deals, used these tax-abatement disclosures to examine their effect on school funding, specifically in St. Louis.
“Local governments in Missouri have complied with Statement 77 (unlike some other states), making it straightforward to track revenue lost to economic development tax breaks and compare among jurisdictions,” wrote Good Jobs First research analyst Anya Gizis in a new report. This allowed Gizis and two co-authors to compile financial disclosures from St. Louis Public Schools, plus 23 school districts from suburban St. Louis County, and compare the lost tax revenues in each.
Read the full story at Reason.
Read the full report here.