A New Perspective – 9-16-2004: Impact Fees

September 16, 2004

Golden Gate Gazette

The County Board of Commissioners is doing a better job than most people give them credit for. They are tackling the no-win situations and fighting the loud nay Sayers pretty good. Unlike the former school superintendent, none of our county officials have quit after taking a public beating from the vocal minority.
People want growth to pay for growth by taxing newcomers to the county with increasing impact fees. We charge more in impact fees than any county in the world. The general consensus has been to ‘stiff’ the new folks and let us continue with better and more services at the newcomer’s expense.
The story goes that the recent hurricanes haven’t made a direct hit on Collier County because they couldn’t afford the impact fees.
So far, stiffing the newcomer has worked pretty well. The county has been able to increase its annual spending 15 to 20 percent and governments have been able to maintain or reduce ad valorum tax rates. Ad valorum taxes are the money you pay on your homes and business real estate.
The impact fees are beginning to work and growth is starting to slow, and the trend will continue.
Because of that, the county won’t see its revenues increase as dramatically to increase services and the many new demands placed on commissioners.
Having the foresight to recognize the party won’t last forever, county board members commissioned a study to be overseen by the Collier County Economic Development Council.
Thursday of this past week, the commissioners were presented that study, conducted by a firm from Lansing Michigan called Anderson Economic Group.
One good thing that was mentioned by the firm was that most government bodies don’t take on these issues until it is too late to do something to prevent the severity of the problems ahead.
Now the scary part begins. The study showed that regular, sustainable taxes such as ad valorum taxes, sales and gas taxes, licenses and permit fees, franchise fees, etc., only provide 28 percent of the revenues of the county budget. That is the only reliable source of funding available to the commissioners. The rest comes in the form of impact fees, grants and things like that – not a very reliable funding source to count on for the future.
If we continue to raise and rely on impact fees, we’ve seen that a slowdown will occur. That means less revenue for the county. If that happens, the only way to make up those revenues is to increase property taxes.
The cost of the study was budgeted at $62,000 from the general revenue fund.
What does that mean? It means if you want to maintain the services you get now, you will either need to pay more in property taxes or drop the impact fees to encourage more growth so the party won’t end so soon. Let your commissioner know your preference.