Brownfield Tax Credits
Thu April 10, 2014
Schweich Gives Low Marks To State Brownfield Tax Credits
A new audit says Missouri’s Department of Economic Development did not provide proper oversight to state tax credits designed to help developers clean up contaminated property.
In the report released Thursday, State Auditor Tom Schweich gave the Missouri Brownfield Tax Credit program his lowest rating possible. The program awarded more than $185 million in credits between 2000 and 2013.
"It’s tough work, and not a lot of people want to do it," Schweich said. "And I think the attitude has been, 'Hey, if we found somebody who will do it, let them do it however they want to do it and we’ll pay them a bunch of tax credits.' And there hasn’t been the kind of rigorous oversight you would expect of a program this size.”
Schweich and his staff found several problems, including:
- A failure to follow traditional contracting processes.
- Consultants who helped developers determine the scope of work would submit their own bids to do the work.
- Developers who were not forced to pay back the tax credits even though the clean-up projects did not create nearly the number of jobs forecasted.
- Cases where the credits were awarded even though the clean-up work was not completed.
"But what we did not find was an actionable case of fraud or criminal conduct by any developer," Schweich said. "It was more due to the fact that the rules are so loose that they were allowed to do some of the things that they did."
The state Department of Economic Development said it has submitted new rules to address the auditor’s concerns. The Department of Natural Resources, which is supposed to certify the work is performed, did not return phone calls for comment.
Follow Rachel Lippmann on Twitter: @rlippmann
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