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Editorial - Impact fees: Another look

July 28, 1997

Seven years after another board of Washington County Commissioners backed away from a fight over development impact fees, the fiscal condition of the cash-poor county government is forcing another look at new revenue sources. A $100,000 study of development costs here is timely, in view of the growth likely to spill over South Mountain when those shopping for homes in Frederick County discover they can cut their costs by traveling another 15 minutes up Interstate 70.

The study's timing is right for several reasons, one of them political. With citizens lining up to bash the incumbent board for the water/sewer debt, the county's builders are the least of the commissioners' worries. If we're going out, the commissioners might reason, we might as well do something bold before we go.

The intervening years have also given officials and builders a chance to observe how impact fees have been handled in neighboring counties like Frederick, where they haven't done anything discernible to slow development.

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And finally, in the past seven years, thanks to groups like Citizens for the Protection of Washington County, the public has become more aware that when residential development occurs, there are certain unavoidable costs, like providing classroom space for new residents' children. That space can be paid for by sharing the costs among all property owners, or by requiring the new residents to pay a larger piece of it.

Is such a system fair? Would impact fees have an adverse impact on the building trade locally? This study should answer those questions and others, like whether the builders' preferred alternative - a hike in the real estate transfer tax - would be a better way to raise cash.

The main problem with impact fees (as noted in 1989 county study) is that the proceeds must be strictly accounted for, and spent only in the district where they're collected, for purposes directly attributable to development. For the current county government, the difficulty of administering such fees, rather than the political fallout, may be the deciding factor.

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