Discounted impact fees on new construction punish taxpayers

Discounted impact fees punish taxpayers

Because infrastructure construction costs so much, the state allows local governments to charge developers the costs required because of new developments. A study must be done to determine the cost. No more than that may be charged.

The charges are called impact fees and are passed on to new home buyers and are part of the "cost basis" of the house. When that house is eventually resold, it is almost always sold for more than the original cost, thus the impact fee is refunded.

When local governments discount impact fees or suspend collection of them altogether, the infrastructure required must still be provided in support of the new development. It isn't an option.

So, if the developers are not paying 100 percent of the impact fee, who pays for that infrastructure? Ultimately it is you, the taxpayer.

Many times local governments have to cut other projects, reduce services, and lay off employees in order to fund the new infrastructure that discounted impact fees don't cover. Frequently bonds are sold to pay for infrastructure that must be ready when developers are ready to sell houses. That is called concurrency. Bonds add to the cost because of interest and usually are paid back by all taxpayers.

Sometimes bonds are paid back with impact fees. That is the case with the $35 million bond issue just approved by the Board of County Commissioners to pay for the 44th Avenue expansion. That money will be paid out now but will be paid back over a nine year-period using future (!) impact fees.

So, who is going to pay for the future infrastructure? That's the point. There is never a valid reason to discount or suspend impact fees. Never!

No matter how you cut it, taxpayers will have to pay what the developers don't.

Ed Goff

Bradenton

This story was originally published April 7, 2016 at 12:00 AM with the headline "Discounted impact fees on new construction punish taxpayers ."