Impact Impasse - Who Foots the Bill?

Guest Correspondence


This year has brought much focus on impact fees collected throughout Sarasota County.  Unfortunately, there are numerous misconceptions perpetuated throughout local conversations and media reports on the subject.  Perhaps the most common misunderstanding exists in the assignment of who is responsible for paying impact fees.  Time and time again, impact fees are purported to be the responsibility of developers.  Indeed, when impact fees are lowered or perceived to be insufficient, the rhetoric is often that developers are being given a break.  However, this line of thinking is fundamentally flawed.       

Impact fees are charged to cover the cost of the additional usage of public facilities and services created by new construction.  For example, a new home often leads to additional residents.  In turn, those new residents mean additional usage of services like law enforcement and facilities like parks.

Property taxes fund current and planned public services and facilities, but growth will eventually require additional capacity.  While property taxes pay for the maintenance of existing roadways, for example, how are new roadways funded when growth creates the need?  That, in essence, is why impact fees exist.  The notion is that existing taxpayers shouldn’t be responsible for any additional cost burden created by new residents and commercial activity.

There are a few points that help demonstrate who is ultimately responsible for impact fees.

Take, for example, a scenario where a husband and wife purchase a vacant lot upon which to build a house; no developer, just taxpayers looking to build their dream home.  They will pay the same impact fees as a homebuilder in a master-planned community; not a penny more, not a penny less.

Second, it’s worth looking at when impact fees are collected.  Most impact fees become due when a certificate of occupancy is issued.  Certificates of occupancy are required in order to certify that a structure is legally prepared for everyday use.  It’s not the development of the structure that triggers the requirement of many impact fees, rather, it’s when the structure is reasonably anticipated to be used.  The use will likely be by an occupant, not a developer.

Lastly, it’s important to understand that impact fees have a shelf life.  If the fees collected aren’t spent within a predetermined time period then they are eligible for refund.  Presumably, those unused dollars would be refunded to whomever is expected to have paid them.  Sarasota County provides that impact fee refunds be distributed to the current property owner.  The likelihood that a developer, particularly in residential areas, would also be the current property owner when impact fees are eligible for refund is extremely low.  Instead, it’s likely the taxpaying inhabitant.

Reasonable people may disagree on whether or not impact fees should exist or at what rate they should be levied.  However, defining impact fees as a tax on developers is flawed and detrimental to the community conversation.  If one wishes to advocate for higher fees, it should be understood who will pay them.  It’s not that developers pass impact fees on to buyers, it’s that buyers are why impact fees exist in the first place.

Kevin Cooper is the vice president for Public Policy and Sarasota Tomorrow Initiatives for The Greater Sarasota Chamber of Commerce

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