Wrong time for impact fees
To the Editor:
Last week Madison’s Council adopted impact fees. Such fees are appealing. In theory growth pays for growth and will not be at the expense of existing citizens. How could one not support adoption? And one would be correct…if the ordinance were properly drafted and implemented at the proper time. This ordinance is severely flawed and coming at the wrong time.
Why is it flawed?
The following are just a few of many problems. The ordinance places the major burden of paying for growth, not on new residential which causes the greatest negative impact on taxes, but on business and industry which actually benefit our tax base. That is why the city and county fund efforts to attract new businesses.
The burden of impact fees will not be paid just by newcomers but also by many current residents who will pay thousands if not tens of thousands of dollars in impact fees: a church which expands or adds a pre-school; the elderly who build a smaller home; our children building their first home; a business increasing its size; new public schools and recreational facilities; farmers adding structures; a larger hospital; a Habitat for Humanity home.
A study suggests the cost of impact fees is eventually borne more heavily by current landowners whose property values fall, rather than by newcomers. The ordinance requires impact fees be paid at the securing of a building permit, not time of impact, which may be months if not years later when the Certificate of Occupancy is issued. This can unfairly cost projects thousands of additional dollars which have nothing to do with their impacts. There is often no reasonable basis for impact fees paid by one project vs. another.
For example, for fire-related fees, a childcare nursery pays two and a half times the amount paid by a home of the same size and a school nine times more. Yet the nursery and school have more rigorous fire safety and no smoking requirements than a home.
Why is now not the time?
Local unemployment is approaching 10 percent. We are in the longest economic decline since the Great Depression. We need local jobs and increased economic activity. Yet this impact fee ordinance discourages new business and economic activity when needed most. A local industry testified before council of plans to double or triple in size which would add jobs and benefit our tax base.
If impact fees were adopted (more than $100,000 for this company), it would look at other expansion locations. (Note: No other city in our six contiguous counties has impact fees.) Madison’s growth rate even prior to the economic downturn was less than one percent. Now it is half that.
Growth has not caused our taxes to go up but rather the adding of services and the reduction of funding from the state. When major growth begins to occur, there is time then to impose impact fees. A council member said we cannot predict when the economic turnaround will begin so have no choice but to adopt fees now. Yet there are simple solutions. For example, when we have nine to 10 percent unemployment, no fees.
When it is five percent, maybe we do. When building permits are under one percent, no fees. When two percent, maybe we do.
Such approaches require no crystal ball.
Nothing prevents the city from adopting a good ordinance now and imposing fees when the economy turns around. Presently we do not have a good ordinance, and fees go into effect in July.
There is talk by council of adopting exemptions to address some of the above concerns.
This is commendable and should be done. Yet, there is no talk of correcting fee allocation inequities, ordinance language, or timing of fee imposition.
Three council members—Connie Booth, Whitey Hunt, Michael Naples—voted to adopt the ordinance.
I urge you to ask them to help correct its flaws and delay implementation. Given our immediate growth outlook, we have adequate time to get it right.