‘Light years ahead of where we were’: St. Louis close to adopting tax abatement policy

By on October 9, 2018

From St. Louis Post-Dispatch:  A new map designed to guide St. Louis’ use of residential property tax abatements — a key piece of a larger effort to develop policies for the city’s development incentives — could finally win adoption by the Board of Aldermen on Friday.

While not binding, the map would provide a consistent policy to a commonly used development incentive in the city that historically has been set by the whims of a neighborhood’s alderman.

“I think we need to recognize it is light years ahead of where we were just a few years ago,” Alderman Scott Ogilvie said at a committee hearing last month, calling decisions on incentives in the past “ad hoc.”

In the city, tax abatement is a frequently granted developer incentive that exempts from real estate taxes a portion of added property value created by new investment. Homebuyers and rehabbers can also apply for abatement, but some abatements are approved even in well-off neighborhoods. Critics say that’s an unnecessary incentive in a city hurting for revenue.

The city has spent the last few years re-evaluating how it doles out developer tax breaks after credit rating agencies cited their prolific use here and a city-commissioned report found hundreds of millions in forgone revenue over the last 15 years due to incentives.

Last year, abatements resulted in almost $30 million in forgone revenue for St. Louis. More than half of that would have gone to St. Louis Public Schools, which has no say on abatements.

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