Manzara v. State

MICHAEL A. WOLFF, Judge,

concurring.

Introduction

“First, do no harm” — a fundamental precept of medicine — needs to be applied *665to this judicial decision, which may cause unnecessary harm to Missouri’s law that freely grants standing to taxpayers to challenge governmental spending.

In determining that the taxpayer plaintiffs did not show that the tax credits in this case are an expenditure of public funds — which they are — the principal opinion takes the liberty, unnecessarily in my view, of distorting Missouri’s case law on standing.

Although the principal opinion and Judge Stith’s concurring opinion leave the door open to get the law right in some future case, there is no principled reason not to get the law right in this case, or — at the very least — to leave the law of standing undisturbed.

The principal opinion faults the taxpayer plaintiffs for not asking the Court in a separate “point relied on” to extend the standing doctrine to cover challenges to tax credit expenditures. But the taxpayers here properly rely on Curchin v. Mo. Indust. Dev. Bd., 722 S.W.2d 930 (Mo. banc 1987), which held that that tax credits granted to a private party are indistinguishable from expenditures of public funds. Although Curchin, as is true of other taxpayer cases, did not expressly address the standing issue, Curchin applied the same analysis to tax credit expenditures as to other spending of public funds. There is no need to “extend” taxpayer standing to tax credit cases — the law already is there.

That said, I concur in the result of the principal opinion, because I believe that spending public funds through transferable tax credits under section 99.1205 — which is done in conjunction with the city government for redevelopment in north St. Louis — is acceptable because, under Missouri cases, the expenditure is for a “public purpose.”

The standards for what is a “public purpose” are so lax that one has to wonder why the majority would invoke the doctrine of standing — which could have the effect of cutting off all challenges to the expenditure of the public funds through tax credit programs. The damage to the law from calling this an expenditure for a public purpose is minimal; the damage the principal opinion does to the law by invoking standing poses substantial problems for Missouri law and the proper role of the state’s courts.

Let us remember: First, do no harm. The law of taxpayer standing is crucial to ensuring government accountability under the Missouri Constitution. The majority should have left it alone.

Taxpayers’ Standing in Missouri

To bring a lawsuit, a person must have standing, that is, a stake in the outcome of the lawsuit. Missouri long has recognized that taxpayers have standing, as taxpayers, to challenge expenditures of public funds that a taxpayer plaintiff alleges are unlawful. Unlike the United States Constitution, the Missouri Constitution prescribes in detail the powers and limitations of the state government and its many subdivisions. Taxpayers regularly come to the courts of this state seeking to enforce specific constitutional provisions, alleging that the state or a political subdivision is violating the constitution. Taxpayer standing is central to holding state and local governments accountable to limits on spending and other activities as specified in the state constitution.

The state of Missouri gave Northside Regeneration, L.L.C., $28 million in transferable tax credits, which, when sold, would give Northside Regeneration about $25 million in real money to spend on its redevelopment project in the city of St. Louis. The principal opinion says the tax*666payers have not shown that this is not public money, and, therefore, they do not have “standing” to bring a lawsuit claiming that this grant violates the Missouri Constitution.

But the principal opinion casts doubt on whether taxpayers could challenge an action in which the state grants tax credits to a private company or organization — even when the state would be prohibited from spending public money directly for that purpose — because the money did not come directly from the state treasury and, therefore, the state’s donation of money to this project — which the state itself calls an “investment” — is not subject to judicial review.

These taxpayers, Manzara and Mar-quard, claim that the money granted to Northside Regeneration violates article III, section 38(a) of the constitution, which provides that “The general assembly shall have no power to grant public money or property, or lend or authorize the lending of public credit, to any private person, association or corporation....” 1 Because the meaning of article I, section 38(a) may not be immediately obvious, I offer an example from a provision of the state constitution that is clear to illustrate my point: Article I, section 7 of the Missouri Constitution would prohibit spending state money to build a church.2 But what if the state were to set up a program to which churches could apply for transferable tax credits to aid in building new churches? Having well-built new churches, after all, would be a great benefit to the communities in which they are located and, presumably, would contribute to uplifting the morals of the state. But under the principal opinion’s analysis, a taxpayer may lack standing and, therefore, could not challenge the legality of the state’s action because a tax credit is not public money.

Really?

Not all tax credits are created equal. The transferable tax credits involved in this case share two characteristics:

1. They are granted to an applicant that applies for the credits and demonstrates to a state agency that the applicant’s proposed use of the money is for the purpose set forth in the particular tax credit program established in the statute.
2. The tax credits can be sold, yielding real money for the project for which the tax credits are granted. The hypothetical church, described above, has no tax liability of its own, nor typically would a developer such as Northside Regeneration at the time it receives the tax credits. No problem; the church or the developer can take the credits to a bank or financial institution that will sell them to taxpayers who owe taxes to the state, and the taxpayer buyers can use the credits to pay their taxes. Typically, the institution will charge a commission, and the taxpayer who buys the credits will pay *667less than face value — this discount is the incentive for the tax-credit buyer to purchase credits rather than using actual cash to pay the taxpayer buyer’s taxes. The amount paid in commissions and discounts typically is about 10 percent of the face value of the tax credits,3 which means that the nearly $28 million in credits would yield about $25 million in cash to Northside Regeneration.

What is a transferable tax credit?4 It is a state-issued coupon that can be “redeemed” — that is, used instead of money— to pay taxes that the holder of the tax credit owes the state of Missouri. If the recipient of the tax credit owes no taxes, the recipient can sell the credit to someone who does owe taxes. Put simply, a $100 tax credit can be used to pay $100 in taxes owed to the state. It is a cash alternative.5

In fiscal 2009, there were 58 separate tax credit programs whose “redemp-tions” — that is, the amount of tax credits used to pay state taxes — totaled $584 million.6 These transferable tax credits are not like the tax credits that taxpayers may claim as entitlements on their income tax returns. For example, if a taxpayer donates to a food pantry, a maternity home or a domestic violence shelter, he or she can claim a credit on the tax return — the credit is not transferable, it is limited in amount and the taxpayer claiming the credit does not have to submit an application to a tax credit program.7 These cred*668its are simply incentives inserted into the tax code to encourage or reward various kinds of donations and activities.

The “tax credit programs” such as the program that Manzara and Marquard challenge here — the “Distressed Area Land Assemblage Tax Credits” in section 99.1205 — generally are referred to as “investments” on which the state expects to realize “a return.”8 The state grants the credits — which are assets of the state of Missouri — and hopes for a “return,” the project sponsor receives the credits and converts them to cash to support the project, the financial institutions sell the credits and receive commissions, and the buyers of the credits receive credits worth more than they paid so they receive “returns” on their investment in buying the tax credits.

Everybody wins, except for the taxpayers to whom the principal opinion denies standing and, perhaps, others such as the next generation of workers whose education is funded insufficiently because today’s grownups decided to spend the public’s money — by tax credits — on other priorities.

In reading this “Distressed Area Land Assemblage Tax Credits” statute, one reasonably may infer that it was enacted to benefit one project in one city. This may have little relevance to the validity of the tax credit program in this case, but it is interesting to see the good uses that the well-connected with their lobbyists can find for state government, which raises again the question: Should the state government’s financial favors bestowed through tax credits be beyond the reach of judicial review under the Missouri Constitution?

The Missouri Constitution, as noted, has many specific prohibitions and limitations on the spending of public money. These restrictions safeguard the scarce public resources that are needed to support essential public services, for instance, education, public health and public safety.

The principal opinion distorts Missouri precedents that recognize standing to sue in cases involving transferable tax credits, most notably Curchin, which held that providing a transferable tax credit — that is, a tax credit that can be sold — is the expenditure of public funds. 722 S.W.2d at 930. Instead of following Missouri case law that relates directly to the tax credits in this case, the principal opinion seems to get distracted by the federal constitutional standing analysis in a case involving Arizona’s law that grants individual taxpayers up to $500 in non-transferable tax credits for donations to organizations that provide scholarships for students to attend private schools, including religious schools. Arizona Christian School Tuition Organization v. Winn, — U.S. -, 131 S.Ct. 1436,179 L.Ed.2d 523 (2011).9

By indicating that taxpayers may not have standing to present a constitutional challenge to the spending of state resources through tax credits — regardless of whether the tax credit is transferable — the *669principal opinion provides the legislature with a roadmap to try to ensure that courts never will be able to review whether any grant of public money as a tax credit violates a specific prohibition in the Missouri Constitution.

The principal opinion brings to mind a familiar 19th century observation that the American republic will endure until politicians realize they can bribe the people with their own money.10 This observation usually is applied to social insurance and other entitlements from state and federal governments and these forms of welfare generate no shortage of commentary predicting the end of the republic.

The genius of those who enact transferable tax credit programs is that tax credits allow governments to bestow financial largess on well-connected recipients with little or no public scrutiny and — with this Court’s indulgence — no judicial scrutiny.

Are these transferable tax credits public money? If it looks like money and acts like money, it is money. And, because it comes from the state of Missouri, it is public money. And because it is public money, the taxpayers here, Manzara and Marquard, have standing to bring this lawsuit.

The denial of standing to taxpayers who challenge tax credit spending rests on a flawed economic and legal analysis — an analysis sure to be noted by future historians tracing the origins of the congenial corruption that led to widespread distrust of government and ultimately to its demise. It may not be the end of our republic, but perhaps we may be able to see the end from here.

Missouri’s Law of Standing

Missouri courts — unlike the federal courts — have a long history of allowing taxpayers as taxpayers to bring challenges to the use of public funds that are claimed to be unlawful or unconstitutional. Newmeyer v. Missouri & Mississippi Railroad, 52 Mo. 81 (1878). “Missouri courts allow taxpayer standing so that ordinary citizens have the ability to make their government officials conform to the dictates of the law when spending public money.” Ste. Genevieve Sch. Dist. R-II v. Bd. of Aldermen of City of Ste. Genevieve, 66 S.W.3d 6, 11 (Mo. banc 2002) (citing State ex rel. Nixon v. Am. Tobacco Co., Inc., 34 S.W.3d 122, 133 (Mo. banc 2000)). “A taxpayer has standing to challenge an alleged illegal expenditure of public funds, absent fraud or compelling circumstances, if the taxpayer can show either a direct expenditure of funds generated through taxation, an increased levy in taxes, or a pecuniary loss attributable to the challenged transaction of a municipality.” Id. at 10 (citing E. Mo. Laborers Dist. Council v. St. Louis County, 781 S.W.2d 43, 47 (Mo. banc 1989)). It is irrelevant that the challenged expenditure may “produce a net gain.... Taxpayers must have some mechanism of enforcing the law.” E. Mo. Laborers, 781 S.W.2d at 47. See also Tichenor v. Mo. State Lottery Comm’n, 742 S.W.2d 170, 172 (Mo. banc 1988) (allowing a taxpayer to challenge the state lottery commission’s decision to use commission funds to participate in a multi-state lottery).

The principal opinion resorts, to the dictionary definitions of the words “direct expenditure of funds generated through taxation.” Piecing together individual def*670initions, the majority comes up with the following definition: “a sum paid out, without any intervening agency or step, of money or other liquid assets that come into existence through the means by which the state obtains the revenue required for its activities.” But by parsing these definitions, the majority cobbles together a definition of the phrase that seems to support the proposition that transferable tax credits are direct expenditures of the state’s liquid assets — money that is due in taxes. This shows that if you are looking for meaning, the dictionary is not necessarily the place to go, especially if the definition you piece together defies common sense.

Distorting Precedent

To get to its result that taxpayers do not have standing to challenge the grant of transferable tax credits, the principal opinion has to distort Curchin and ignore other cases.

In Curchin — a case that is right on point — this Court flatly held that a “tax credit is as much a grant of public money or property and is as much a drain on the state’s coffers as would be an outright payment by the state to the bondholder upon default.” 722 S.W.2d at 933. The statute in Curchin authorized the industrial development board to issue industrial revenue bonds to promote development. Id. at 931. The board also was authorized to include a provision in these bonds for “a state tax credit for the amount of any unpaid principal and accrued interest in default.” Id. The Court was asked to consider whether these tax credits were an improper public expenditure under article III, section 38(a) of the Missouri Constitution. Id. at 932. The board argued that because no payment was required by the state, no “grant of public money” occurred. Id. at 933. The Court disagreed and held that “[tjhere is no difference between the state granting a tax credit and foregoing the collection of the tax and the state making an outright payment to the bondholder from revenues already collected.” Id. at 933. The Court reasoned that the tax credit was available to the original bondholder and subsequent bondholders. Id. If the bondholder did not have sufficient state tax liability to take advantage of the credit, he or she was allowed to sell the bond to someone who could use the credit. Id. Finally, the Court noted that the tax credit could be carried forward for 10 years. Id. The Court concluded, “The transferability of the bonds, the availability of the tax credit to subsequent bondholders, the issuance of the bonds to failing or risky businesses, and the ten-year carry forward provision make the utilization of the tax credit a near certainty.” Id.

In this case, the $28 million in tax credits authorized to Northside Regeneration under section 99.1205 affect the plaintiff taxpayers in the same way that a decision by the legislature to provide $28 million straight out of the state’s coffers would affect them. Just as in Curchin, the tax credits here are transferable — by sale or assignment — and can be carried forward a number of years. Just as the issuance of the tax credits to failing or risky businesses contributed to the Court’s finding that their use was “a near certainty,” here, the fact that the tax credits are only issued after several very specific requirements are met, including the creation of a redevelopment agreement with a municipal authority, section 99.1205.2(15), shows that “[tjhere is no difference between the state granting a tax credit and foregoing the collection of the tax and the state making an outright payment.” Curchin, 722 S.W.2d at 933.

The principal opinion asserts that the money Northside Regeneration received is *671not the state’s money because it had not actually reached the state’s coffers, but, again, its conclusion is not supported by our cases. In Ste. Genevieve Sch. Dist., 66 S.W.3d at 6,11 the Court looked at whether an individual taxpayer and a school district could challenge an abatement of property taxes in a tax increment financing (TIF) district. The defendant city had amended a redevelopment project without convening the TIF commission. Id. at 9. The amendments to the project provided for certain property owners in the TIF district to have any increases in their property taxes abated through the use of TIF revenues. Id. at 11. The Court held that the school district had standing because the abatement of taxes would deprive the school district of tax funds that it otherwise would have received, resulting in a pecuniary loss. Id. The Court also reasoned that the taxpayer had standing because the redevelopment project “costs the school district and the city future tax revenue.” Id. In a similar fashion, the tax credits issued to Northside Regeneration will result in the loss of future tax revenue to the state of Missouri.

The principal opinion argues that the taxpayers do not have standing in this case under the rationale of W.R. Grace & Co. v. Hughlett, 729 S.W.2d 203 (Mo. banc 1987), but misconstrues what the Court held. The plaintiff, W.R. Grace, brought suit against the Jasper County collector of revenue, challenging the “manufacturers tax” that it had been required to pay based on annual assessments for certain tax years under section 150.310.1, RSMo 1978. Id. at 204. Grace argued that the manufacturing tax being imposed violated the Missouri Constitution, article X, section 3 (1945), the uniformity clause, which provided that taxes “be uniform upon the same class of subjects” and the equal protection clause of the Fourteenth Amendment. Id. at 204-05, 205 n. 3. Grace argued that the uniformity clause was violated because the authorizing of exemptions for certain types of tangible personal property resulted in a lack of tax uniformity. Id. at 204-05. It also argued that these exemptions violated the equal protection clause because article X, section 6 (1945, amended 1972), provided that only the property tax exemptions specifically enumerated in section 6 could be exempted from taxation. Id. at 204-05 & 204 n. 2. Grace sought a refund of the taxes that it had paid under section 150.310.1 due to the fact that other taxpayers had received these allegedly unconstitutional exemptions. Id. at 205. As the principal opinion here correctly notes, the Court found that W.R. Grace did not have standing because it was not “ ‘adversely affected by the statute[s] in question’” because “those statutes would merely excuse the tax obligations of others.” Id. at 206-07 (quoting Ryder v. County of St. Charles, 552 S.W.2d 705, 707 (Mo. banc 1977)) (emphasis and brackets in original). While the principal opinion focuses on this single line from the Court’s decision, it is the Court’s entire explanation as to why W.R. Grace did not have standing that is important here.

The Court reasoned that “it assumes too much to say [WR- Grace] has standing to raise the uniformity clause and fourteenth amendment challenges to an otherwise facially valid taxing statute because certain alleged unconstitutional exemptions may have been conferred by non-related statutes upon classes of taxpayers other than [W.R. Grace].” W.R. Grace & Co., 729 S.W.2d at 206. The Court further noted *672that “[i]f we were to assume, while not deciding, that the statutes relied upon by [W.R. Grace] did in fact create unconstitutional exemptions, it does not follow that this would entitle [W.R. Grace] to a refund of the monies paid under a different and totally unrelated taxing statute.” Id. at 207 (emphasis added). W.R. Grace’s analysis is not applicable here because W.R. Grace was not challenging the expenditure of public money but rather the government’s failure to collect taxes from other entities. The challenge of expenditures is necessarily a separate analysis, and W.R. Grace’s holding is irrelevant.

The principal opinion’s conclusion that the transferable tax credits in this case are not payments directly from the treasury is undercut by the definition of “total state revenue” in the tax-limiting Hancock Amendment. That definition, in article X, section 17(1), supports the proposition that the tax credits in this case are part of “total state revenue,” because such revenues “shall include the amount of any credits not related to actual tax liabilities.” That portion of the definition of “total state revenue” applies to the transferable tax credits at issue in this case — which are granted to Northside Regeneration and are not related to its tax liabilities. The argument of plaintiffs in Mo. Merchs. & Mfrs. Ass’n v. State, 42 S.W.3d 628 (Mo. banc 2001), that tax credits should be included in total state revenue failed because the plaintiffs took an all-or-nothing approach to tax credits and the record did not support differentiating among various categories of tax credits. Id. at 635-36. The taxpayers in Mo. Merchs. did not dispute the trial court’s conclusion that there was no evidence as to which tax credits should be included in total state revenue; this Court, accordingly, remanded the case to the trial court to determine whether there were in fact tax credits not related to tax liabilities. Id.

The Mo. Merchs. opinion notes the strange fact that moneys paid from the treasury also are counted as “revenues.” “It may seem strange that a payment from the treasury is counted as ‘revenue,’ but that is precisely what article X, section 17(1) requires when it says that tax credits ‘not related to actual tax liabilities’ shall be included in ‘total state revenues.’ ” Id. at 635-36. The purpose of that provision “is to ensure that any amounts of tax credits that exceed tax liabilities, and result in payments from the treasury, will not result in a deduction in the amount of ‘total state revenues’ for the purposes of computing the Hancock limit.” Id. at 636. If the Hancock Amendment counts these kinds of tax credits as state revenue, it makes no sense to say that the transferable tax credits in this case — which are “not related to actual tax liabilities” — are not public funds. They are public funds and taxpayers have standing to challenge their expenditure.

Arizona Christian School Tuition Organization v. Winn

The most troubling aspect of the principal opinion is its injection into Missouri standing analysis of the United States Supreme Court’s recent decision in Arizona Christian Sch. Tuition Org. v. Winn, — U.S. -, 131 S.Ct. 1436, 179 L.Ed.2d 523 (2011). The Supreme Court’s decision in Winn, however, is guided by federal court standing principles — principles that are quite different from those principles under which Missouri courts recognize taxpayer standing, a difference that reflects the vastly different roles of state and federal courts.

The United States Supreme Court applies its doctrine under Article III of the United States Constitution, requiring plaintiffs challenging governmental action to show that they have suffered or will *673suffer (1) an ‘“injury in fact;’” (2) ‘“a causal connection between the injury and the conduct complained of;’ ” and (3) that it is “ ‘likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision.’ ” Id. at 1442 (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992)). See also, Massachusetts v. Mellon, 262 U.S. 447, 43 S.Ct. 597, 67 L.Ed. 1078 (1923).12 In other words, to show standing under Article III, a taxpayer would have to show that the taxpayer has suffered an “injury” that is individual to him or her and not merely the generalized injury that may have been suffered by the public at large.

The United States Supreme Court has recognized exceptions for taxpayer plaintiff only in a narrow range of cases involving challenges based on the establishment clause of the First Amendment, as in Flast v. Cohen, 392 U.S. 83, 88 S.Ct. 1942, 20 L.Ed.2d 947 (1968). Winn, 131 S.Ct. at 1445. Though discussing Flast, Winn leaves undisturbed the recent doubt that taxpayer standing will be recognized even in many religion cases. See, e.g., Hein v. Freedom From Religion Found., Inc., 551 U.S. 587, 127 S.Ct. 2553, 168 L.Ed.2d 424 (2007). This trend, of course, may leave the enforcement of the separation of church and state to the states under their state constitutions, where such matters resided until the last 70 years or so. See, e.g., Harfst v. Hoegen, 349 Mo. 808, 163 S.W.2d 609, 611-12 (1941).

More to the point, however, is the fundamental difference between the role of state courts in enforcing specific provisions of a state constitution and the role of the federal courts enforcing federal constitutional constraints against states. In Winn, as noted, the challenge to the tax credits for tuition for religious schools first was presented to the state courts, and the taxpayer-plaintiffs lost on the merits. 131 S.Ct. at 1441 (citing Kotterman v. Killian, 193 Ariz. 273, 972 P.2d 606 (1999)). There unquestionably was taxpayer standing in state court, and the Arizona courts met the challenge head-on without even mentioning standing.

By adhering to its Article III standing requirements, on the other hand, the United States Supreme Court stays out of controversies that state courts have a duty to adjudicate under their constitutions, as the Arizona court did in Kotterman. The truly relevant cases, for our standing purposes, start with this Court’s explicit holdings on standing in Tichenor, 742 S.W.2d at 172, and E. Mo. Laborers Dist., 781 S.W.2d at 47, and continue through Ste. Genevieve Sch. Dist. R-II, 66 S.W.3d at 11, all of which recognize the standing of taxpayers permitted to sue as taxpayers without showing the kind of particularized “injury in fact” that the United States Supreme Court requires under Article III. The significance of these modern Missouri cases is that they explain the taxpayer standing doctrine that has been assumed throughout much of our state’s history. See Thomas C. Albus, Taxpayer Standing in Missouri, 54 J. Mo. Bar 199 (1998).

The difference between the United States Supreme Court and the Supreme *674Court of Missouri is important — Missouri recognizes a taxpayer’s standing even though his injury may be no different from that of other taxpayers, and the United States Supreme Court does not. The differences in taxpayer standing cases reflect the profound differences between the constitutions under which these courts function. State constitutions “do not reflect the same level of trust in state legislative decisionmaking as does the federal Constitution in congressional decisionmaking.” Helen Hershkoff, State Courts and the “Passive Virtues:” Rethinking the Judicial Function, 114 Harv. L.Rev. 1833, 1891-92 (2001). “Article I of the Constitution assumes that Congress is best situated to decide how to carry out the terms of its authority.... State constitutions, in contrast, impose not only substantive, but also procedural requirements on legislative activity.” Id. at 1892. “[S]ueh provisions alter the dynamics of lawmaking, implicating the state courts in the resolution of certain governance questions that are largely outside the Article III experience.” Id. at 1893.

The principal opinion’s analysis may allow the legislature to circumvent not just article III, section 38(a) but many other requirements of the Missouri Constitution, evading what this Court said in E. Mo. Laborers Dist. Council about the need for “a system of checks and balances whereby taxpayers can hold public officials accountable for their acts.” 781 S.W.2d at 47.

While the choices of how to spend the public’s money are choices that the elected political branches of our government get to make, the state courts have a duty to guard the state constitution and to intervene at the behest of an aggrieved taxpayer when the state’s resources are being spent on matters that the constitution forbids or on projects that have no public purpose.13

The principal opinion suggests that the remedy lies in the political process, but there is little doubt that the $500 million currently being spent on public projects to create jobs, make movies,14 and do other useful things — instead of fully funding the needs of public education, for instance— might well receive majority support. But constitutional constraints may serve occasionally to restrain the current generation from robbing the next generation, a function that is not fulfilled by democratic majorities unless, perhaps, the voting age can be lowered to age 8.

The principal opinion in this case, I am sad to say, follows the irrelevant lead of the United States Supreme Court and, in doing so, may lead the Court in future cases to forsake its duty under the Missouri Constitution. The United States Supreme Court can assume that money is not public until it is deposited in the treasury *675and thereby find that a taxpayer suffers no direct “injury in fact” sufficient to support Article III standing. The Supreme Court’s standing decisions reflect its reticence to redirect taxation and spending by applying the constitutional principles of due process and equal protection under the Fourteenth Amendment.

The reluctance of the United States Supreme Court to interfere with state decisions is prudent and respectful of federalism, but in state supreme courts, there are no federalism concerns. When a state supreme court closes the courthouse doors to challenges based on specific provisions of a state constitution, the Court is not acting prudently — its failure is a dereliction of duty, permitting state officials to spend the public’s money indirectly through tax credits where they would be forbidden to spend the public’s money directly.

Thereby relieved of constitutional accountability by the principal opinion in this case, elected officials can feel free to use state government as an ATM for dispensing public money through tax credits for special projects and to special pleaders. Without judicial review, an important purpose of our state constitution — to safeguard the public’s resources for the benefit of future generations — will be entirely dependent on elected officials who may depend on the beneficiaries of tax credits for the financial support their campaigns need. Are these elected officials cognizant of the needs of future generations? Yes, of course, as they often express devotion if not actual money to those needs. Are they dependent today on the well-being of future generations? Not so much.

The Arizona Supreme Court decided the merits of the controversy over the funding of parochial school children’s education with tax credit funds, without, as noted, even mentioning whether the taxpayers had standing to sue. Kotterman, 972 P.2d at 606.15 Regardless of whether an Arizonan agreed or disagreed with the court’s resolution of the controversy, the Arizona taxpayers received what they had a right to receive from their courts — a resolution of a constitutional conflict over state spending, which is what Missouri taxpayers traditionally expect when they seek redress as taxpayers in our state courts. When the United States Supreme Court denies standing in a controversy involving the spending of state money, it can be seen as a prudent respect for state prerogatives in a federal system. But when state courts deny standing and refuse to reach the merits of a constitutional challenge to state spending, the constitutional controversy remains unresolved, with the consequence that a segment of our society may be marginalized because the merits of its side of a legal controversy never are addressed, and the unresolved controversy can continue to fester and build resentment. Hence the importance of getting to the merits and treating the taxpayers’ grievances with the respect they are due.

Public Purpose

The merits, however, do not favor these taxpayers. Even though I would hold that the tax credits here are a grant of public money, I believe that, under our cases, money for the redevelopment of an economically-disadvantaged area is for a *676“public purpose” and, therefore, is constitutional.

This Court has held that even if a grant of public money or property occurs, there is no violation of article III, section 38(a) if the grant serves a public purpose, even though “public purpose” is not mentioned in this constitutional provision. See, e.g., Fust, 947 S.W.2d at 429; Menorah Med. Ctr., 584 S.W.2d at 79.

Judicial decisions reviewing “public purposes” have not been robust, to say the least. The decision of what constitutes a public purpose is primarily left to the legislature. Fust, 947 S.W.2d at 430. This Court will not overturn the legislature’s determination unless it is arbitrary and unreasonable. Id. So long as “the primary purpose of a statute is public ‘the fact that special benefits may accrue to some private persons does not deprive the government action of its public character, such benefits being incidental to the primary purpose.’ ” State ex rel. Wagner v. St. Louis County Port Auth., 604 S.W.2d 592, 597 (Mo. banc 1980).

On its face, the purpose of the tax credit in this case is to encourage and assist in redeveloping land in areas deemed distressed under both federal and Missouri law. Section 99.1205 states that it is to be known and cited as the “Distressed Areas Land Assemblage Tax Credit Act.” Section 99.1205.1. Section 99.1205.2(8)(b) requires that “[a]t least eighty percent of the eligible project area shall be located within a Missouri qualified census tract area16 ... or within a distressed community as that term is defined in section 135.530.” Certain criteria must be met before an applicant is eligible for a tax credit under section 99.1205. These requirements include that the land be redeveloped within an “eligible project area” and be redeveloped in accordance with a redevelopment agreement approved by a municipality under an economic incentive law. Section 99.1205. The statute also specifies the amount and use of the tax credits and requires that “funds generated through the use or sale of the tax credits ... shall be used to redevelop the eligible project area.” Sections 99.1205.2(2)(b)a; 99.1205.3.

This Court previously has said that “[rjedevelopment of ‘blighted, substandard or insanitary’ areas is a public purpose.” Tierney v. Planned Industrial Expansion Auth. of Kansas City, 742 S.W.2d 146, 150 (Mo. banc 1987). See also State ex rel. U.S. Steel v. Koehr, 811 S.W.2d 385, 389 (Mo. banc 1991) (“[T]he clearing and redevelopment of a blighted area is for the public use of revitalizing such area to make it healthful.”); Mo. Const. art. VI, § 21 (“Laws may be enacted, and any city or county operating under a constitutional charter may enact ordinances, providing for the clearance, replanning, reconstruction, redevelopment and rehabilitation of blighted, substandard or insanitary areas ...”).

Nevertheless, Manzara and Marquard argue that the purpose of the statute is not a public use, but rather that it is designed “to promote some private end.” See State *677ex rel. City of Jefferson v. Smith, 348 Mo. 554, 154 S.W.2d 101, 102 (1941). In analyzing article VI, section 23 and article III, section 38, courts have given further guidance as to what constitutes a public interest.17 A statute serves a public purpose if the primary effect of that statute is to promote a public interest. Curchin, 722 S.W.2d at 930. See also Rice v. Ashcroft, 831 S.W.2d 206, 209 (Mo.App.1991). Conversely, a statute serves a private interest if it primarily promotes a private interest, regardless of whether there is an incidental benefit to the public. Curchin, 722 S.W.2d at 930; Rice, 831 S.W.2d at 209. Simply because a private individual or entity benefits from the statute does not negate its public purpose. It is only if the primary purpose was to benefit an individual that the statute is for private use.

The taxpayers in this case have not negated the state’s position that the primary purpose of the statute is to promote redevelopment of distressed communities. The benefit to the redeveloper of the distressed communities is considered incidental unless the taxpayer shows otherwise. Rice, 831 S.W.2d at 209 (holding that lease payments by Missouri, St. Louis city, and St. Louis County to the regional sport authority were for the primary public purpose of increasing sporting and convention business in St. Louis despite an “incidental” benefit to the St. Louis NFL corporation). See also Moschenross v. St. Louis County, 188 S.W.3d 13, 22 (Mo.App.2006) (holding that St. Louis city’s financing of the construction of a ballpark on behalf of Cardinals Ballpark L.L.C. did not primarily benefit the Cardinals Ballpark L.L.C. and instead it was for the primary public purpose of increasing tax revenue). Under these cases, the tax credits granted under this statute appear to serve a public purpose.

Manzara and Marquard note that the predecessor to article III, section 38(a) was enacted to prevent the state from continuing its custom of giving large sums of money to railroads, canals and banks on a regular basis and abusing its power in doing so. Curchin, 722 S.W.2d at 934 (citing 11 Debates of the Missouri Constitution 1945, 3212 (debate of May 23, 1944) (statement of Mr. Garten)). In Curchin, the Court relied on this history and found that there was no public purpose where the Industrial Development Board was able to give out state tax credits to companies that had defaulted on their industrial revenue bonds. Id. at 935. Using tax credits to bail out private companies that defaulted on their bonds obviously fails the public purpose test.

The tax credits in this case are explicitly tied to the developer’s agreement with a municipality to develop a blighted or distressed neighborhood. There is no carte blanche grant of tax credits for any purpose, as in Curchin, but instead there are assurances that only developers furthering the purpose of section 99.1205 will obtain the tax credits.

Manzara and Marquard may disagree with the legislature’s decisions to create a tax credit and to implement the tax credit in the manner that it did. But they have not met their burden of showing that sec*678tion 99.1205 is not directed toward a public purpose.

There is, however, a strong case to be made that the Court one day should revisit the question of what is a “public purpose,” and whether it is properly a qualification for approving public spending under Article III, section 38(a). Courts may not be perceived as doing their duty to the public when they show extraordinary deference to the legislature.18 The current standard for determining that spending is for a “public purpose” is so lax that it is difficult to imagine an expenditure of public funds, aside from the expenditure authorized in Curchin, that would not be considered for a “public purpose” if the government says that it is.

Conclusion

I concur in the result, but I disagree with the principal opinion’s conclusion that the taxpayers, Manzara and Marquard, failed to show that they have standing to sue. I think it is both unnecessary and unwise to engage in a muddled discussion of standing when the use of tax credits in the redevelopment of north St. Louis can be justified as being for a “public purpose.” Although I have doubts about the reliance on “public purpose” to justify challenges under Article III, section 38(a) to the granting of public funds to a private entity, that is the current law and it suffices to justify the expenditures under the Distressed Land Assemblage Act that the taxpayers challenge in this case.

. There is no mention of "public purpose” in this provision. As discussed in the Public Purpose section of this opinion, however, the judicial gloss on this provision approves money for private entities if the spending is for a "public purpose.” See, e.g., Fust v. Attorney General for Mo., 947 S.W.2d 424, 429 (Mo. banc 1997); Menorah Med. Ctr. v. Health & Educ. Facilities Auth., 584 S.W.2d 73, 79 (Mo. banc 1979).

. Article I, section 7 provides that: "[N]o money shall ever be taken from the public treasury, directly or indirectly, in aid of any church, sect or denomination of religion, or in aid of any priest, preacher, minister or teacher thereof, as such; and that no preference shall be given to nor any discrimination made against any church, sect or creed of religion, or any form of religious faith or worship.”

. Paul Rothstein & Nathan Wineinger, Transferable Tax Credits in Missouri: An Analytical Review, 3 Fed. Res. Bank of St. Louis Regional Econ. Dev., no. 2, at 53, 66-67 (2007) (Table 5).

. I use the term "transferable” to refer to the tax credits at issue in this case in the same sense as the term is used in the Federal Reserve Bank analysis cited in footnote three, though some of the tax credits of the kind discussed here may have limits on their transferability.

. The principal opinion answers the "church” hypothetical by pointing out the obvious fact that churches pay no taxes. That is precisely my point as well as the crucial distinction between "transferable” tax credits in this case and tax credits that only can be used by the taxpayer. The "tax credit programs” like those in this case separate the grantee of the credits from the taxpayer who uses the credits to pay taxes. A grantee such as a church (or Northside Regeneration) that has no tax liability of its own can get a cash benefit by selling the credits to someone who must pay a tax liability. There is no doubt, under the principal opinion’s analysis, that the state could grant tax credits to churches to support their building programs, and there would be no judicial remedy.

. See Missouri State Auditor, Audit Report No. 2010-47. See also, Missouri Tax Credit Review Commission, Report of the Missouri Tax Credit Review Commission (Nov. 30, 2010), available at http://tcrc.mo.gov/pdf/ TCRCFinalReportl 13010.pdf. "Redemptions” is the word used by the state auditor to describe the process of paying one's taxes by using a tax credit instead of cash. The report of the Missouri Tax Credit Review Commission notes that tax credit "redemptions” increased every year from fiscal 1998 ($102.7 million or 1.7 percent of the state’s general revenue) to fiscal 2009 ($584.7 million or 7.8 percent of the state's general revenue) and declined in fiscal 2010 (to $521.5 million or 7.7 percent of general revenue). Id. at 3.

.Section 135.647; section 135.600; sections 455.200, 455.220, 488.445. These tax credits for donations are similar to tax deductions in that they reward charitable giving when taxpayers file their returns. Tax deductions are amounts subtracted from adjusted gross income prior to calculation of the amount of taxes due. See section 143.111. The Distressed Land Assemblage Act differs from both the aforementioned tax credits and tax deductions because it is not tied to the amount of tax liability of the individual, and, instead, it is granted only after the applicant has fulfilled the program requirements of the act. See section 99.1205. Unless otherwise indicated, all statutory citations are to RSMo Supp.2010.

. See also, Missouri Tax Credit Review Commission, A Report of the Missouri Tax Credit Review Commission, at 5 (Nov. 30, 2010), available at http://tcrc.mo.gov/pd6TCRCFinal Reportll3010.pdf (stating that "The Governor charged the Commission to determine which tax programs were generating a good return on investment for the taxpayers of Missouri and which were not ...")

. The difference between standing in state courts and the federal Article III standing doctrine is illustrated by the fact that the Arizona taxpayers previously had challenged the school tuition tax credits in Arizona state courts and had lost on the merits — the state plaintiffs had "standing” in state court. Winn, 131 S.Ct. at 1440.

. This observation is sometimes attributed to Alexis de Tocqueville, a 19th century Frenchman whose Democracy in America is often cited but not often read. It is a clever observation but it is hard to find that de Tocqueville said it, though he was a fount of observations about American character and governance.

. The principal opinion’s attempts to distinguish this case show that it is, in fact, indistinguishable.

. There is a vibrant debate — if debates on the history of standing can be characterized as vibrant — as to whether liberal justices invented or developed the law of standing to insulate New Deal agencies and progressive legislation from judicial scrutiny by a conservative Supreme Court. See, Daniel E. Ho & Erica L. Ross, Did Liberal Justices Invent the Standing Doctrine? An Empirical Study of the Evolution of Standing 1921-2006, 62 Stanford L.Rev. 591 (2010); F. Andrew Hessick, Standing, Injury in Fact, and Private Rights, 93 Cornell L.Rev. 275 (2008); Robert J. Pushaw, Jr., Justiciability and Separation of Powers: A Neo-Federalist Approach, 81 Cornell L.Rev. 393 (1996).

. "The primary basis for taxpayer suits arises from the need to ensure that government officials conform to the law. It rests upon the indispensable need to keep public corporations, their officers, agents and servants strictly within the limits of their obligations and faithful to the service of the citizens and taxpayers.” E. Mo. Laborers Dist. Council, 781 S.W.2d at 46 (internal citations omitted).

. Two excellent movies made in Missouri with public support both were nominated for Academy Awards for Best Picture: "Winter's Bone,” (2011 nominee) ($800,000 in state support through tax credits) which depicts poorly educated methamphetamine addicts and murderers in Southwest Missouri, and "Up in the Air,” (2010 nominee) ($5.1 million in state support), a story of a man played by actor George Clooney who is hired to fly around the country firing employees of companies that are downsizing. The stories of these movies seem to show that this governmental program did not suffer from irony deficiency.

. The Arizona decision was based on the First Amendment to the United States Constitution; in Missouri — which has specific prohibitions dating from the 1870s — the state constitution is likely to be the source of the law. See, e.g., Harfst, 163 S.W.2d at 612-614 (discussing specific Missouri provisions). For standing purposes, the source of law is unimportant. If a taxpayer as taxpayer has standing, as in both Arizona and Missouri, he or she has standing regardless of the law on which the claim is based.

. The statute provides that a Missouri qualified census tract is "designated by the United States Department of Housing and Urban Development under 26 U.S.C. Section 42.” Section 99.1205.2(8)(b). 26 U.S.C. section 42(d)(5)(B)(ii) defines a qualified census tract as

any census tract which is designated by the Secretary of Housing and Urban Development and, for the most recent year for which census data are available on household income in such tract, either in which 50 percent or more of the households have an income which is less than 60 percent of the area median gross income for such year or which has a poverty rate of at least 25 percent....

. Article VI, section 23 says: "No county, city or other political corporation or subdivision of the state shall own or subscribe for stock in any corporation or association, or lend its credit or grant public money or thing of value to or in aid of any corporation, association or individual, except as provided in this constitution.” Both article VI, section 23 and article III, section 38 forbid a grant of public money to a private entity. The article VI provision prevents a county, city or other public corporation or subdivisions from doing so whereas the article III provision prevents the legislature from doing so.

. In another context, much of the criticism of the United States Supreme Court’s decision in Kelo v. City of New London, 545 U.S. 469, 125 S.Ct. 2655, 162 L.Ed.2d 439 (2005) resulted from the Court’s deference to the legislative judgment that private property taken by eminent domain was for a “public purpose.” Daniel B. Kelly, The "Public Use" Requirement in Eminent Domain Law: A Rationale Based on Secret Purchases and Private Influence, 92 Cornell L.Rev. 1 (2006); Eric Rut-kow, Kelo v. City of New London, 30 Harv. Envtl. L.Rev. 261, 268-70 (2006), and Ashley J. Fuhrmeister, In the Name of Economic Development: Reviving "Public Use" as a Limitation on the Eminent Domain Power in the Wake of Kelo v. City of New London, 54 Drake L.Rev. 171, 177 (2005). In the case of eminent domain, the Missouri Constitution — in contrast to the United States Constitution— specifically instructs Missouri courts not to defer to the legislative judgment that a taking is for a public purpose. Article I, section 29.