Tavares, FL - Lake County, FL - Monday, Nov. 26, 2012
After taking a 3-week period to recover from the election results, we are back at it!
Your taxes could be raised next year if the Lake County Board decides to continue waiving local Impact Fees on new construction. By waiving the impact fees, the Board is giving up tax revenues that will need to be provided by another source, like property taxes, sales taxes, etc.
The Lake County Board and the Lake County School District Board are in the process of deciding whether to renew suspension of impact fees for County transportation (roads) and Schools on new construction of homes and commercial buildings.
If you read about or see Lake County (not city) roads being overcrowded, or schools not being able to buy new buildings, computers or school buses, one reason is that impact fees for them were waived by the County Board the last 2-3 years.
The resulting County & School Board impact fee decisions in the next 1-2 months could re-enact transportation and school impact fees on new construction waived by the Lake County Board for the last 2 years. The homebuilders and commercial construction firms don't like impact fees and want them gone. But, if not reinstated, the waivers could be extended another year. If they are waived, look for different taxes to be proposed or initiated to cover the missing revenue since all tax revenues are falling. Thus, rather than homebuilders and owners of new buildings contributing up front via impact fees to the cost of new roads and school facilities needed for the new residents and businesses, ALL taxpayers could be taxed to subsidize the homebuilders and owners of the new construction.
In general, impact fee revenues are dedicated to NEW assets for separate uses like parks, roads, schools, fire services and libraries. Their use is limited to capital spending, like building new roads or school buildings, or buying "capital" equipment like school buses, new or replacement computers and vehicles. Impact fees can't be used for salaries or normal operating or maintenance uses. You can see the Lake County list of uses for impact fees, and how much is levied on new construction for each purpose HERE. You can also read prior Impact Fee committee reports which were ignored by both Boards.
Cities also have their own impact fees, which we are not discussing here. This article is only about County level impact fees. Thus a home built in Leesburg would be subject to any impact fees defined by the city, but not county. And, a home built in Lake County unincorporated areas would be subject to the impact fees we are writing about here.
Impact fees are collected on all new construction, not on existing homes or buildings. The theory is that since new construction results in the need for wider roads, new school student stations, school buses, etc. that the owner of the new construction should pay "impact" fees to help pay for new infrastructure (in this case, for roads and schools).
1: Transportation Impact Fees
These are fees on NEW residential and commercial construction designed to pay for new road and other needed infrastructure generated by the new construction (like road widening, intersections). The Board received a presentation on the issues at the last Board meeting, but will discuss what to do at an upcoming meeting. Watch for it, because the general consensus seems to be they will need SOME impact fees to offset other revenue losses, but it might be linked to unemployment figures. It might mean the end of completely caving to the home and commercial construction builders and reinstatement of some impact fees to cover new infrastructure costs for growth. The alternative is alternate taxes, and they have recommendations in earlier reports (at the above website link) which were ignored.
Here is last year's CFAC report on Transportation Impact fees, which once again was ignored by the County Commissioners, because they ignored a previous Impact Fee recommendation report also. Why does anyone bother working on their committees??
2: School Impact Fees
These fees on new residential and commercial construction are used for School Capital spending (like buildings, some repairs, enhancements and purchases like classroom computers) and were waived by a WEAK School Board (our opinion) who caved to the Homebuilder’s industry instead of maintaining the revenue stream (estimated at $2-4-million per year) for the school system. I was at the meeting where the Board majority of Debbie Stivender, Kyleen Fisher and Rosanne Brandeburg sold out to the homebuilders and declined to demand continuation of the impact fees. So, by default, the County Board, who had the final vote, continued their support of economic development over education financing and enacted a waiver of the School Impact fees two years ago. The School Board & the County Board ignored results from an Impact Fee report, AND they did not implement any method to offset the tax waived. Instead, what the School Board does is force the Administration to defer maintenance and capital spending. That is one reason (State mandates and budget reductions are others) why you hear staff complaining about bad air conditioners, overcrowding, etc.
So, if you want to follow the SCHOOL Impact Fee meetings, the next School CFAC meeting is this Thursday at the School District offices. The County CFAC (Capital Facilities Advisory Committee) will meet this Thursday, November 29, 2012 9:30 A.M. Location: Board Room, Lake County School District Office, 201 West Burleigh Boulevard, Tavares, FL. I don’t know which area will be covered, but there is a possibility the committee will finish more meetings, write a report and it will be ignored by the School Board and County Board who seem to only listen to the homebuilders without creating any revenue alternatives to make up for lost impact fees. Thus there is a REAL possibility they will try to ask for more taxes to shift the cost of capital spending from new construction to all property owners (or other taxes, like fuel taxes, etc.)
Let members of BOTH Boards know what YOU think – should they retain impact fees which tax those who create the need for new infrastructure, or should they shift those waived revenue needs to ALL taxpayers a different way. For instance, if a developer builds a tract with 100 homes, it results in the need for more student seats, road widening, student bus transporation equipment, etc. Should those new homeowners pay impact fee taxes on the new homes right when they move in, or should ALL taxpayers pay those fees and subsidize the infrastructure costs of the new homes. Some people might call this income redistribution – you already have property, so the original owner might have paid impact fees on your property, but should you now also pay for the new homeowner infrastructure? The homebuilders don’t want impact fees because it increases the financing costs of their products vs existing homes, so which will it be? Equitable re-distribution or a requirement to pay new home and building costs up front?
My prediction is that since both Board Members Debbie Stivender and Rosanne Brandeburg were re-elected, they will join with Kyleen Fischer and side with the homebuilders again and do nothing, thus the County Board may once again waive their impact fees without a immediate plan to offset the reduced revenues. As Tod Howard, a rational Board member said once (I paraphrase him) “Our job is to ensure properly funded education for students, not subsidize homebuilders by reducing a tax revenue stream…”.
So if you voted to re-elect Stivender and Brandeburg, you now know the possible effect of that vote.
The Impact Fee Bottom Line
The bottom line is that if you notice COUNTY roads are out of repair, and schools are running short of funds for capital spending on assets (including replacement equipment like School buses, vehicles, air conditioners and computers), both the County and School District Boards caved to homebuilders and waived the impact fees (which are one of several revenue sources) without implementing an alternate revenue method to offset the reduced impact revenues. That to me is bad resource management when we all know next year will be fiscally worse.
Recommendation:
I encourage you to visit the CFAC meetings, and also give public input at the County Board meeting when they discuss impact fees.
Want to Read More about Lake County Impact Fees?
HERE are all of OUR earlier FiscalRangers.com Reports on local Lake County Impact Fees
Here is an article about the School Board reviewing an impact fee study last year, but then they refused to make any recommendations to the Lake County Board, thus the County Commissioners moved ahead and suspended the School impact fees for one year. Then earlier this year, the County Board again suspended the School impact fees because the School Board didn't take a stand. So, don't blame the County Board for waiving the fees, blame the do nothing School Board majority for not taking a stand.
Here is a 2010 article from Orlando Sentinel columnist Scott Maxwell also explaining how waived impact fees result in other taxes.
And, HERE is a 2010 column by Lauren Ritchie on the results of waiving impact fees when that was first proposed by Lake County Commissioner Jimmy Conner.
