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Executive Summary (5)

The PFM Group – St. Louis Comprehensive Revenue Study

Evaluation of St. Louis’ Tax Collection System

As noted above, authority for tax collection in St. Louis is highly fragmented. The City needs to centralize tax collection functions, policies, procedures, and methods to achieve higher collection rates and more efficient tax administration. The following are key areas for additional effort:

  • Online Payment Options
  • Lack of Single-Site City Payment Centers
  • Lack of Centralized IT Platform
  • Collection of Past Due Receivables and Taxes
  • Lack of Standardized Accounts Receivable and Revenue Collection Policies

Recommendations/Options

  • Provide Additional and Improve Existing Online Payment Options
  • Set up City Payment Centers
  • Create a Centralized and Sharable IT Platform for Tax Collection
  • Explore Alternative Methods of Past Due Receivable and Tax Collection
  • Establish Standard Accounts Receivable and Revenue Collection Policies
  • Make Greater Use of Performance Evaluation in Tax Collection
  • Make Greater Efforts at Intergovernmental Cooperation on Tax Collection

Tax Incentives

As with most large cities, St. Louis utilizes various tax and other incentives to foster economic development. This can have multiple effects on the City’s revenue structure – both positive and negative. The actual need for economic development tax incentives has been a matter of extensive discussion and debate. While this debate is likely to continue, in practice, nearly every large city utilizes tax and other incentives for economic and community development. St. Louis uses a variety of development incentives, including business development loan programs, industrial revenue bond financing, tax increment financing, and property and earnings tax abatement. These incentives are supplemented by a wide array of state and federal loan, tax
credit, and grant options, often facilitated by the St. Louis Development Corporation, the City’s independent economic development agency.

Tax Increment Financing

Tax increment financing (TIF) is one of the City’s most frequently used economic development tools. Widely used throughout the country and particularly in the Midwest, TIF provides a method for financing development projects by allocating the additional tax revenue generated from increased property and economic activity taxes to a special fund to be used for improvements within the TIF district.



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