State auditor says developers abuse special sales tax benefit

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ST. LOUIS (KPLR) – Missouri’s auditor issued a blistering report Monday on what are called Transportation Development Districts around Missouri.

Auditor Nicole Galloway released her findings at the Wainwright State Office Building downtown.

Transportation Development Districts or 'TDDs' allow sales taxes to be raised in certain areas to fund infrastructure improvements. There are 205 TDDs statewide.

According to Galloway, property owners and developers abuse and mismanage the funds, and weak state laws allow them to do it legally.

Galloway said TDDs have racked up about $1 billion in outstanding project costs that are going to be repaid with sales taxes.

Galloway points to three TDDs along Washington Avenue, where she said questionable practices have taken place including double dipping on income connected with the sales taxes.

“Insiders have rigged the system to take advantage of Missourians. It’s outrageous that taxpayers are on the hook for nearly a billion dollars in debt without even realizing it. And it’s all allowed by the law,” Galloway said.

Galloway has called for a complete overhaul of 'TDD' laws.