MoSDA Advocacy & Legislative Affairs

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Missouri lawmakers and agencies are in need of ongoing “Special Districts 101” to understand how Missouri’s 1,800+ districts factor into the state’s local governance landscape. This includes, but is not limited to, the difference with the special district structure of government, benefits and challenges with the style of government, general needs, and more.

MoSDA promotes awareness among policymakers on the differences between special districts, school districts, cities, and counties, and how certain laws and regulations can disproportionately impact special districts. Accordingly, a top goal of MoSDA is to protect the state’s special district from unintended financial consequences that state policies otherwise have intended for general units of governments.

Special districts are founded on the principle of local control and are designed to deliver services efficiently within their communities. They are the most local of local governments, established and led by their community members. These districts are best positioned to understand the demands of their constituents and frame services to meet those needs. 

Each type of special district plays its own role as outlined across more than 35 enabling statutes in state law. MoSDA advocates to ensure these statutes are clear, strong, and preserve the principle of local control.

Overall, MoSDA favors policies that strengthen special districts’ ability to deliver efficient, robust, and high-quality public services in their communities. MoSDA strives to educate stakeholders on downsides to policies that pose obstacles to independently exist on a local basis.

District revenues are primarily expended on critical infrastructure and community resources. Unlike general units of local government, special districts rarely have a range of funds or accounts at their disposal to supplement or offset the ever-rising costs to provide public services. Further, most special districts (with limited exception) source revenue from state foundation funds.

Further, most special districts are restricted in how they can raise revenues, have levy ceilings and Hancock Amendment restrictions, and are particularly susceptible to small adjustments or tweaks to taxes and rates – whether by economic force or act of the legislature.

Accordingly, protection and sustainability of local revenue sources are together a key issue impacting all of Missouri’s special districts. MoSDA works to promote among lawmakers the significance of property taxes and sales taxes for district services, ensure governance structures to levy rates and fees for service are sustained, foster a favorable atmosphere for alternative revenue sources (such as impact fees or benefit assessments), and to maintain access to municipal finance tools. 

Bonds are a fundamental tool for special districts to operate, and to construct and maintain facilities (including libraries, hospitals, water systems, and more). Twenty-seven (27) of the state’s enabling statutes outlining districts governance structures authorize special districts to issue bonds, and nearly one-third of local debt issued by non-education agencies is sourced from special districts.

Districts confidently issue bonds upon the approval of their voters and responsibly plan to meet debt service obligations over time with the understanding that local revenue gleaned to pay for the bond is not subject to revenue ceilings.

Accordingly, it is paramount that debt service continues to be exempt from the Hancock Amendment, and that voter thresholds to approve bond measures are not amended to special districts’ detriment. 

Many of Missouri’s counties have failed to achieve target assessment rates in the post-pandemic era, as set forth by the State Tax Commission. Artificially low assessments undermine, and passively robs, special districts’ revenues.

MoSDA supports measures to advance County Assessor Offices’ capacity to accurately and fairly assess property across the state. This includes additional tools, education requirements, and even reforming the position to be non-elected.

Counties and municipalities have leveraged economic development tools authorized under state law, such as Tax Increment Finance districts and industrial development bonds, that have diverted local property tax revenues from special districts. In many instances, there is no recourse for special districts to recover lost revenues resulting from unilateral decisions to issue industrial development bonds. This can cause affected district services that heavily depend on property taxes to be stretched thin.

MoSDA advocates for reforms to tax abatement policies that drive greater transparency, oversight, and the ability for special districts to recover lost revenues over time – just as fellow local governments benefit from increased sales tax receipts resulting from the approved bonds/TIFs.  

The Hancock Amendment has limited growth in local government revenues since Missouri voters adopted the measure in November 1980, capping tax revenue growth at 5 percent or indexing to annual adjustment in the consumer price index (whichever is lower). This landmark tax policy has not aged well over a half-century of economic evolutions, populations growth and migrations, and has prevented special districts from keeping pace with service demands in their communities.

MoSDA principally favors reforms to the Hancock Amendment that would foster greater flexibility for special districts to provide robust public services, better accommodate for growth within districts’ service territories, and de-complicate the mechanisms behind Hanock limits.

Missouri’s special districts often struggle to recruit and retain employees – especially those serving rural areas, economically disadvantaged communities, and in regions lacking economic activity. District leaders have expressed widespread concern with hurdles to compete with wage and benefit packages that fellow units of government offer their employees, frustration with being a constant “stepping stone” for new hires, and some (particularly in rural communities) struggle to convince recruits to sacrifice modern conveniences of urban and suburban living.

MoSDA advocates in favor of polices that ease employment burdens that often keep district managers and leaders in a spin cycle, investments in workforce and volunteer development initiatives that create a pipeline to public service, and enhance access to programs necessary for specialized special district positions (such as water operators, emergency service providers, etc.)

Missouri’s special districts have generally been hindered in their access funding streams available for other units of local government, especially those that are based on population such as the Community Development Block Grant or other opportunities for which special districts must depend on city or county partners to apply on their behalf. 

MoSDA advocates for districts fair access to funding streams, as necessary.