## Facts

- A city created a tax increment financing (TIF) commission and adopted a redevelopment area and TIF plan by ordinance under Missouri’s Real Property Tax Increment Allocation Redevelopment Act.
- The city later amended the redevelopment area and plan by ordinance to add additional project areas and projects.
- A private developer submitted a proposal for redevelopment of a portion of one project area that substantially expanded the scope of improvements and increased project costs by more than 360% (over $1 million).
- The city adopted the developer’s proposal as an “amendment” to the redevelopment plan by ordinance without reconvening the TIF commission.
- The school district alleged that reconvening the commission would have triggered its statutory right, as an affected taxing district, to appoint members to the commission and participate in the plan review process.
- The school district and an individual resident taxpayer filed a declaratory judgment action alleging statutory violations and constitutional violations (including taxation and equal protection theories) based on diversion or abatement of tax revenues.
- The trial court dismissed for lack of standing and for failure to state a claim.

## Issues

1. Whether the school district alleged a legally protectable interest and injury sufficient for standing to challenge the city’s TIF ordinances.
2. Whether the individual resident taxpayer alleged sufficient facts for municipal taxpayer standing.
3. Whether the petition, assuming standing, stated statutory and constitutional claims sufficient to survive a motion to dismiss.

## Decision

- The Supreme Court of Missouri reversed the dismissal and remanded.
- The school district pleaded sufficient facts to establish standing based on alleged loss of tax revenues and deprivation of statutory participation rights in the TIF commission process.
- The taxpayer pleaded sufficient facts for taxpayer standing by alleging illegal or unconstitutional diversion or expenditure of public funds through the challenged TIF ordinances.
- The petition stated claims on which relief could be granted; disputes over whether the changes constituted an “amendment” requiring commission review were not properly resolved on a motion to dismiss.
- The court did not decide the ultimate legality or constitutionality of the ordinances; those questions were left for further proceedings.

## Legal Principles

- On a motion to dismiss, courts assume pleaded facts are true, draw reasonable inferences for the plaintiff, and dismiss only when it appears beyond doubt that no set of facts would entitle relief.
- An affected taxing district has standing to challenge TIF actions when it alleges (a) deprivation of statutory rights to participate through commission representation and (b) a concrete loss or diversion of tax revenues different in kind and degree from the public generally.
- A municipal taxpayer has standing to challenge alleged illegal or unconstitutional expenditure or diversion of public funds; at the pleading stage, non-frivolous allegations are sufficient even if the injury is indirect.
- Whether municipal action qualifies as a statutory “amendment” requiring specified procedures may present a merits issue not suitable for resolution at the pleading stage when material factual and legal characterizations are disputed.

## Conclusion

The Missouri Supreme Court held that both the school district and an individual taxpayer adequately alleged standing and viable statutory and constitutional claims to challenge the city’s TIF plan changes, requiring reversal of the trial court’s dismissal and remand for merits proceedings.


Ste. Genevieve Sch. Dist. R-II v. Bd. of Aldermen of the City of Ste. Genevieve, 66 S.W.3d 6 (Mo. 2002)