Thomson: Impact fees a threat to future of Gulf Coast

Thomson: Impact fees a threat to future of Gulf Coast

Escalating impact fees will undermine new construction and

economic growth.

As local governments fall further behind in road building due largely to an inability to prioritize spending and say no, they are relying more on the new-home tax euphemistically known as "impact fees."

We're all familiar with the fees. They are sold to the public as "making growth pay for itself," as if the family from Ohio will pay it but long-time residents won't. That's a myth at best, a purposeful deception at worst.

The fees, charged on new construction to pay for roads, schools, libraries, parks and other items, are growing like melaleuca trees, intruding ever more on anyone choosing to build a new home - or medical center or KFC. And if Gulf Coast leaders cannot restrain pushing these taxes ever higher to fund ever more government - accomplished by shifting expenditures from roads to other programs like a shell game - the taxes will threaten this critical pillar of our economy.

Government cannot generate a strong economy, but it sure can wreck one.

In the accompanying chart, you will note that Collier is currently king of impact fees on the Gulf Coast, charging $16,649 on each new home - as if housing costs were not already astronomically high in Collier.

However, Sarasota County, currently third on the Gulf Coast, is making a bid to overtake Collier and threaten Orange County to gain the dishonorable title of highest impact fees in the state. The proposed fees could top $17,217 on a new house.

The county is seriously studying jacking up road impact fees on a single-family home from $2,874 to $8,060, a $180% jump. Mobile home fees would go from $943 to $4,207, a 346% increase. Medical offices would triple to more than $29,000 per 1,000 square feet, while restaurants would more than double to $18,449 per 1,000 square feet.

Although the county just increased impact fees in January, county officials are pursuing the new ones by using a different formula. What this amounts to is little more than a tax increase in search of a method for justifying it.

The downside is painfully obvious: higher costs for housing, shopping, eating out and medical care to name a few areas where the fees could double or triple. The upside is negligible. While more money would go into the pot designated for roads, that is meaningless if the county continues to spend money on every other government whim, shifting it from what could be spent on roads. In the end, there could be no net increase for roads.

The problems with impact fees are manifold.

Philosophically, the term "impact fee" is a misnomer. The fees apply to a new house and other new construction. But a house in itself does not impact roads. The people living in the house create the impact and pay the tax. Yet a new house is frequently purchased by existing residents who, by definition, cannot be impacting roads as they already live here.

If I build a new house down the road, I pay impact fees on it although I am not impacting the roads. If a family from Illinois moves down and buys my old house, they do not pay impact fees, despite clearly impacting the road system.

They are arbitrary, as the chart clearly shows. The road impact fees in Hillsborough are $1,475 but they are $5,080 in Charlotte County. Hillsborough charges $196 for a school impact fee, while Manatee charges $6,092. Clearly there is more at work than simple "impact."

Further, we're talking about adding another $5,186 to the cost of a new home in Sarasota, not counting other impact fees for schools, libraries and parks. Parks fees could increase 386% to $2,235 per house under the proposed plan and libraries would go up 67% to $362. All of the political hand-wringing over the lack of affordable housing rings empty when politicians will cavalierly add another $7,500 to the cost of house in order to keep handing out goodies with other tax money that could be used for roads.

A little honesty would at least be a start. This is not an "impact" fee, this is a new-house tax that is yet another element of government creating a lack of affordable housing (along with onerous zoning, burdensome regulations and depleting supplies by removing one-third of county land for environmental preservation.)

More honesty: Florida gets back about 88 cents on each dollar in federal gas taxes. In this, our congressional delegation has completely failed us - although why it should go through Congress in the first place is a reasonable question. There is plenty of money collected for roads that is not being used for that purpose.

There are so many other problems. Impact fees for a medical office building would triple in Sarasota County. Who will pay for that? Developers, who will pass it on to doctors who will pass it on to patients - many of which will already have paid "impact" fees on their homes. This holds true for other categories, such as restaurants. How many times do we get to be taxed for an impact we may not even be making?

Few politicians are willing to look at this increasingly juicy pot of revenues honestly. But the truth is that impact fees frequently tax the wrong people, jacking up prices for homes and businesses to keep local leaders from making the right choices with our money.

And as we can see by the numbers, the escalating taxes will eventually threaten economic growth, which would be a steep price indeed to pay for politicians' folly.

Rod Thomson is executive editor of the Review and can be reached at [email protected].

BY THE NUMBERS

Gulf Coast impact fee scheduless by county tell the story of steep and arbitrary taxes on new-home buyers.

County Total Roads Schools

Charlotte $ 7,122 $5,080 $ 0

Collier $16,649 $5,985 $1,778

Hillsborough $ 5,624 $1,475 $ 196

Lee $ 9,260 $2,971 $4,309

Manatee $11,553 $3,986 $6,092

Pinellas $ 2,275 $1,923 $ 0

Sarasota $10,276 $2,874 $2,032

Sarasota (proposed) $17,217 $8,060 $2,032

National Ave. $ 2,401 $1,485 $ 333