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Hernando Today

Impact Fees Insignificant Compared To Lifetime Of Property Taxes

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The Tampa Tribune

Published: January 19, 2008

Impact fees are an important pay-as-you-use tax/fee, and recent concern about raising them in a real estate market slump is unjustified.

First of all, whether the tax is $9,000+ as it is now or $14,000 as it has been proposed (but then voted against) is meaningless. Math proves this. For example, in a future fancy-schmancy new Hickory Hill home valued at $750,000, the county will expect the homeowner to pony-up $15,000 annually!

In fact, in the 200-year lifetime of the improvement (house/structure), assuming 3 percent increase per year, its (various) owners will pay an accumulated $184,177,908 in property taxes.

Astronomical you say.

Do the math for yourself. Clearly the one-time fee of $15,000 is minor. Truly, the whole cost of construction of the house is minor. In fact, even if you are able to pay for a house in cash (no mortgage), generally you've only scratched the surface of paying for it - about ½ of 1 percent. To me this amount combined with the overwhelming authority given to jurisdictions to collect the tax defies the concept of ownership - but that's another debate in itself.

Secondly, whatever the impact fee is, it is. If there is a definable cost to first-time development of land, it needs to be addressed by the party that does that building. It is a pay-as-you-use system, and that is naturally fair. On the other hand, I do believe a one-fee-fits-all approach is not. For instance, if I have a vacant lot in the middle of Brooksville (or Spring Hill), and now place a new home on it, the cost to the county is not nearly as much to hook up sewer and water services than it would be to build new infrastructure miles away from its nearest end-point.

On the other hand, if the new construction is sufficiently remote, where the building will be mostly self-servicing (private well and septic, perhaps private roads even), then the impact is also inconsequential.

To me, politics and market conditions should not be part of any decision to accept (or not) an impact fee increase. On the other hand, I do believe more attention could be paid to addressing the localized needs such that a variety of fees are established based on impact.

James Mastro

Brooksville

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