MO State Auditor Calls for Reforming CID Laws
Missouri’s auditor is calling for reform to laws governing Community Improvement Districts referred to as CIDs. They are special taxing districts that fund development projects in communities.
The report from Auditor Nicole Galloway shows the state has about two point two billion dollars in CID funds in some four hundred projects across the state. taxpayers are on the hook for most of that project money as the majority are funded by increased sales taxes.
CID’s have boards to oversee spending but those are controlled by developers who stand to benefit from them. Auditor Galloway’s report found more than 80 percent of CID boards are developer-controlled, meaning spending decisions are made by the owners and developers who stand to gain the most from the districts’ tax collections.That has lead to a lack of oversight on how money is spent. And makes CID’s ripe for illegal activity. A case in point is Darrell Gross, a paid consultant for the Big Springs Plaza CID in Neosho, Missouri who was charged and pleaded not guilty to stealing money from that CID. Gross is being investigated for getting funds from a Joplin CID known as Hope Valley.
The state auditor is calling for more oversight as well as input from voters in the creation of CID’s. Currently, municipalities approve CID requests, but state law does not require local governments to evaluate whether a district is in the best interest of the public. Districts can form with vague purposes and time frames and can change their purpose after being established.