ST. LOUIS (AP) — St. Louis missed out on nearly $17 million in revenue during the last fiscal year because of property tax breaks meant to stimulate development, according to a financial assessment by the city comptroller’s office.
The annual report, which quantified the value of the tax breaks, discloses the value of commonly used tax cuts in order to comply with new government accounting standards, the St. Louis Post-Dispatch reported . The property tax breaks freeze real estate values for about a decade so developers don’t have to pay property taxes on the value of improvements to the property.
The $17 million in forgone revenue over the last fiscal year includes taxes that could’ve gone to other jurisdictions, such as public school districts, according to the comptroller’s office. St. Louis Public Schools collects more than 60 percent of property taxes in the city, which means the district missed out on about $10.3 million.
But economic development officials said the tax breaks help revitalize distressed properties. They also argued the breaks attract new residents who pay city sales taxes and earning taxes to make up for the tax break.
The tax breaks have recently drawn criticism, along with tax increment financing, as the city struggles to retain families who worry about the quality of public schools.
The city is working to reduce the amount of incentives it offers. St. Louis stopped recommending full property tax breaks in more stable neighborhoods this year, often opting to abate only part of the property to immediately boost revenue in the short term.
Information from: St. Louis Post-Dispatch, http://www.stltoday.com