IMPACT FEE Bill Being Heard in AZ House Today!

You have probably read ParkerLeavitt’s 3/19/2011 Arizona Republic article “Gilbert Officials Worried about Impact Fees Proposal.”   (You can find it by going to www.AZCentral.com).  This proposed legislation, SB 1525, passed the senate and is poised to pass the House.  It was introduced by Senator Russell Pearce, co-sponsored by Andy Biggs among many others.

This bill will be heard this afternoon.  It’s in Rep. Burges’s Committee.  Her phone number is 602-926-5861.

The bottom line is that it will move us away from a very sound concept “growth pays for growth.”  Currently, when a new home is built, that home requires new infrastructure, provided by the Town of Gilbert.  The impact fee (aka System Development Fee) is paid by the home builder to the Town of Gilbert.  The fee is passed on to the homebuyer.  It all makes sense, except that some municipalities are perhaps inflating the fee and demanding more than the true cost of the “impact.”  What!  There is greed and overspending among politicians and bureaucrats?    Shocking!

The bill will not only limit the number of things for which impact fees can be charged, and changes how fees are to be calculated, plus imposing many other constraints, but it also sets up an “advisory committee” in each city or town that must have at least 60% of its members from the real estate and homebuilding industries.   Think about it:  A private group with a vested interest that will have taxing authority.

The concern is that, when everything is said and done, this legislation could result in no fees being assessed.

There is no doubt that the current system is broken and needs thoughtful evaluation, but this legislation will likely convince municipalities that “It’s time to raise taxes” on the private sector in order to pay for new growth.

Gilbert  first began collecting a full series of system development  fees (SDF’s) beginning September 10, 1997.  Following are the fees for a typical single family home (source: Town of Gilbert):

Fee

1997

2011

Water System (3/4”)

$1,027

$5,042

Water Resource Fee (3/4”)

223

1,355

Wastewater SDF

2,266

5,866

Police SDF

47

643

Fire

127

1,100

Parks and Recreation

705

4,547

General Government

178

708

Traffic Signal SDF

86

423

Total

$4,659

$19,684

Overall, the fees collected have more than quadrupled in 14 years.                                                                           

Whether or not these fees are justifiable is not the issue (overspending for Parkland probably didn’t help, and Fire increased about 10 times).  But it seems that “the fix” might create unintended consequences that will, as usual, hurt the taxpayer.

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