IMPACT: Fees still best alternative
An impact fee is not a tax. Impact fees are collected to pay for infrastructure cost resulting from development. An example of these costs may be an additional fire station when the existing stations are inadequate to protect the new homes and businesses. Impact fees could be used for a new park when projected usage from development is beyond the capacity of existing parks.
Suspending or ignoring impact fees ultimately places the burden of new development on property owners.
Impact fees should not be confused with property taxes which are based on the market value of real estate. In contrast, impact fees are not based on the value of property but on the impact a development creates for new or additional infrastructure. That is why a $40,000 single-wide mobile home may pay the same impact fee as a $400,000 mansion. It is important not to confuse value with impact.
The Legislature determined in 1992 that development should support itself when new infrastructure is necessary to service growth. Whether this growth comes from new “out of towners” or supports population growth from within the community is immaterial.
It may be necessary to point-out that impact fees are not for subdivision streets, waterlines and sewers within the development itself. Impact fees are collected for additional parks, highways, jail expansion, etc. that are required by a single or series of new developments and structures. Impact fees are collected so taxpayers in the future will not be buried with property tax to build additional fire stations or parks.
Impact fees are not a “new” tax or even a tax. The legislation for impact fees and property tax is found in different titles of the Idaho Statutes. Impact fees are found in Title 67 (State Government and State Affairs), while tax legislation is found in Title 63 (Revenue and Taxation).
An Impact Fee Advisory Committee is required in the statute. This committee helps local government determine the fee schedule. The statute requires 40 percent of the members on this committee to represent development, building and real estate interests. This is a very favorable representation when compared to taxpayer interests. Plus there is a lot of guidance in the statutes to determine impact fees including a provision for appeal.
In all probability that new fire station or park will not be built in the exact location or subdivision that paid into the impact fee fund. Divining where (location) and when (timing) additional infrastructure is needed depends on where subdivisions are developed and how fast. Tightening land use planning could alleviate the difficulty of such projections but at a cost to property rights and freedom.
An argument against impact fees, for those who must pay them, is that they will never use the facilities or services. Actually, most of us hope we will never use the fire department or EMS. Use of emergency services is a theoretical demand until it becomes a very real demand when your house is on fire or you have a heart attack. Fortunately, I have never used the fire department or EMS services but that does not mean I don’t want these services available.
How does our community pay for fire stations and parks when required by new development? If not with an impact fee, it is the property taxpayer who shoulders this burden.
Finally, which is more economically constraining — overtaxing and burdening a business to build infrastructure for new developments or collect impact fees from developments which generate the very need for these services?
Likewise it is difficult to build a retirement plan for future property taxes which depend not on reasonable appreciation and inflation but on development that you cannot anticipate or control.
Growth is inevitable. It should be encouraged. It should pay its way. Impact fees were the best option available to the legislature in 1992 and it still is.
FRED EBEL
Post Falls