The St. Louis Public Schools district is losing about $2,360 per student each year due to tax incentives, according to a new report.
Good Jobs First, a nonprofit research group focused on economic development, released its annual report, which examines the impact of tax abatements and tax increment financing on public services like schools.
Tax incentives are often awarded to companies that are looking to put down roots in St. Louis in hopes of bringing more economic development to the city.
The findings were the focus of a recent town hall held at Vashon High School by the American Federation of Teachers Local 420, which has long advocated against the overuse of tax incentives due to what it sees as a negative impact on public schools.
Otis Williams, interim director of the St. Louis Development Corporation, attended the event and rebuffed the report’s findings.
“We are wanting to ensure that we have redevelopment and jobs available for our citizens, and so we don't really have people knocking our doors down to come,” Williams said. “So the idea is, how can we incentivize those things to occur? And I realize that we just need to be smart about how we do that, but having a moratorium, or not doing something to incentivize them, I wildly disagree with that approach.”
The sparsely attended event had mostly SLPS staff and some community members in the audience.
Interim Superintendent Myra Berry thanked the union for open dialogue around the issue but did not offer specific criticism or support of tax incentives.
“Transforming a school system requires shared ownership and a shared responsibility,” Berry said. “I am committed to building stronger partnerships, listening with intention and working with each of you to chart a path towards greater equity, transparency and long-term stability for our district.”
At the heart of the debate around tax incentives is combating the population decline in the city.
St. Louis has seen the sharpest decline in population among major American cities, according to U.S. Census Data. SLPS is considering closing some of its schools, in part, because of declining enrollment.
Those who advocate for more tax incentives say they must be used to attract big corporations, which will lead to more jobs and eventually, more people.
Traci Fantini and Molly Metzger, members of the Parent Action Council, a collective of SLPS parents who advocate on behalf of the school district, say a strong public school system is one of the key solutions to solving the population problem.
“When the City is considering tax incentives, we should be asking: Does it make sense for our public schools to subsidize this?” Metzger said in a text message. “And if the incentive is creating something directly helps our students and families — like deeply affordable, family housing — maybe that is a good investment. But otherwise, we’re not falling for ‘trickle-down economics’ anymore.”
Fantini said that though she understood the role that tax incentives play in the city’s development, she does not want them to come at the expense of SLPS.
“Public schools, success and the success of economic development here are bound up together, and they need to be working together,” Fantini said.
The report
Good Jobs First found that over the past eight years, the 28 public school districts in St. Louis and St. Louis County lost more than $380 million to economic development tax incentives, most of which came from tax increment financing deals.
In both jurisdictions, local government agencies use economic development tools like TIFs to attract developers to areas they’d like to see developed or at the request of developers. The TIF then captures the increase in property taxes created by the new development, diverting it to help subsidize the project.
That means during the TIF’s lifespan, school districts and other public services in the area that typically would benefit from the revenue do without. They can last up to 50 years.
According to Good Jobs First’s report, incentives in the city cost SLPS almost $240 million over the past eight years. That’s compared to 24 school districts in the county that together lost around $381 million to tax abatements during the same time.
The study found SLPS misses out on roughly $2,360 per student each year. LeRoy said it's one of the highest annual rates per student in the country.
“Think about how much enhancement you could do with more teacher aides, more extracurricular activities, more enhancements in terms of classroom technology and staffing levels,” LeRoy said.
School districts where the majority of students are Black or from low-income households saw the highest impact from abatements and incentives. Seventy-six percent of SLPS students are Black, and 100% qualify for free or reduced-price meals.
“Students who are Black lose about 3½ times more than the typical white student in the area," said Good Jobs First Executive Director Greg LeRoy. “And if you're a low-income student who qualifies for free or reduced-price meal lunches, you're losing about four times more than students that don't qualify for free lunch.”
The report compares that rate to the Rockwood School District, which only lost a total of $4.7 million to tax abatements in the same timespan, or $61 per student each year. SLPS lost 57 times that much, and each student missed out on almost 39 times more than students in the Rockwood School District.
SLPS enrolls roughly 16,500 K-12 students, while roughly 19,500 attend Rockwood Schools, 74% of whom are white. Only 12% are eligible for free or reduced-price meals.
The Special School District of St. Louis County lost the second-highest amount per student at $1,460. The district serves students with special needs.
SLDC disputes findings
In St. Louis, a significant portion of incentives for new development is awarded by the St. Louis Development Corporation, a quasi-governmental agency that works to bring new development to the city.
Otis Williams was appointed to lead the corporation after his predecessor, Neil Richardson, left the job after sparring with Mayor Cara Spencer during her time on the Board of Aldermen.
Since Williams’ appointment, he’s said the city needs to return to a model that attracts developers into the city with incentives and abatements. He said without them, developers move on to different areas where they can broker better deals or charge higher rent when the development is finished.
Williams presented to the Board of Education in August, making the agency’s case for the use of tax incentives to attract developers to buy the district’s surplus properties, including Cleveland High School in Dutchtown.
In an interview Friday, he pushed back on Good Jobs First’s report, calling the study “an interpretation of fact” that he does not agree with and that doesn’t take the local conditions of St. Louis into account.
He said the high volume of vacant buildings makes St. Louis hard to compare to larger cities with bigger tax bases.
“I think the study that is presented was absent of careful analysis of all of those things,” Williams said. “I would caution people to fall in on what works in New York, Chicago and Los Angeles does not necessarily work in St. Louis.”
Williams called incentives an “important tool” for the city and argued that each development receiving incentives is an investment in the future of public services like SLPS. Without them, he said, developers would skip St. Louis and the population would continue to fall.
According to the St. Louis Accessor’s permit dashboard, this year marked the second-lowest number of building permits issued in the city since 2000, with 4,384 issued as of Friday. Last year marked the lowest, with the city only issuing 4,117 permits.
However, the value of those permits skyrocketed from 2024 to 2025, which may be attributed to construction costs. Those 4,384 permits amounted to $1.3 billion, the third-highest total value of building permits the city has recorded since 2000.
He pointed toward vacant properties that produce no tax revenues but may after receiving incentives.
“We have vacant properties that aren't paying — they're paying little or no taxes,” he said. “So you go from nothing, to a bum, to realizing the full assessed value of a property. It's investing — it's like seeing your portfolio grow.”
However, Williams said he didn’t know how many of the city’s abatements were on properties that were vacant and said more analysis would be needed to determine that balance.
As for the school districts, he said if the St. Louis Development Corporation doesn’t try to bring in more development, the city’s population will continue to fall, and the schools will continue to lose funds as the tax base dries up. He pointed to a study conducted by consulting firm Baker Tilly on behalf of the agency that supported that theory.
“Well, the only way they’re going to go is down,” Williams said. “So if we do nothing, doing nothing yields nothing.”
LeRoy disagrees.
Without substantial change to how St. Louis city officials award incentives to developers, SLPS will continue to struggle and most likely have to close schools in the future, LeRoy said.
He called for a moratorium on tax incentives to give the city time to rethink how it doles out the deals. He pointed toward using tax incentives to attract affordable housing, an idea the school board has supported in the past.
As for Williams' thinking, LeRoy said that the city has tried the same tactics for decades, and that the results speak for themselves — an ailing school district and falling population.
“Why would you pursue a strategy that has had such poor results?” LeRoy said. They say the definition of insanity is doing the same thing over and over again and expecting a different outcome — I think it's not working and I think there's really got to be a debate here about overhauling incentives completely.”
