Wrong time and place for impact fees

August 01, 1997

It's hard to think of a specific tax or fee that hasn't been proposed in Washington County of late, largely as a salve for the cash-hemorrhaging county sewer system.

Impact fees are the latest to hit the drawing board.

The theory behind impact fees sounds solid and in some areas and in some situations it is. Impact-fee designs say that if you are going to build a house, you should have to pay a tax for the services your household will require - upgraded roads, sewer and water capacity, schools, fire protection, parks and so on.

As Washington County Planning Commission Chairman Bert Iseminger accurately points out, housing projects don't pay for themselves. That means the county is left to pick up costs that are caused by the development but not paid for by the developer.


In fairness, the argument goes, the developer - or more accurately the homebuyer - should pick up the tab for this increased demand on government services.

Here's what an impact fee means to a homebuyer: Over the course of a 7.75 percent, 30 year mortgage on a $100,000 home loan, a $4,000 impact fee would add about $30 (from $716 to $745) to a homeowner's monthly payment.

That's not an insignificant jump.

But is it enough, as homebuilders claim, to drive a buyer to West Virginia or Pennsylvania? That depends on what kind of value a buyer places on better schools, better roads and better parks. If these services mean something, and in most cases I would argue that they do, buyers will pay the added price. This price also entitles the homeowner to a measure of security in a county with meaningful zoning - as opposed to Berkeley County, West Virginia, where six months after you move into your new dream house you could find an army of mobile homes or a junk yard popping up on the tract facing your picture window.

Therefore, I don't believe it would be any great disaster should Washington County enact impact fees.

But that's not to say it's a good idea.

Impact fees make the most sense in areas where housing starts are spreading like rabies among racoons, and people are moving into a county in droves. They make sense in counties that have to build new, bigger roads to handle greatly increased traffic and where schools can't keep up with ever-growing numbers of kids.

That fits the profile of Frederick County. It does not fit the profile here.

Student enrollment, for example, is about the same in Washington County today as it was 25 years ago. Enrollment is up some years, down others. There is no great annual crush of new kids.

Census figures show that population growth in Washington County is lethargic at best. Compared to Frederick, or even West Virginia's Eastern Panhandle, it is positively snail-like. New home impact, it would seem, is minimal.

As a policy, impact fees have the effect of being a brake on growth, where growth is out of control. Washington County needs no such brake. Not coincidentally, in a county where housing starts are modest, impact fees are simply not going to have that much of an impact on the county treasury. The one tax we do need, a fair and reasonable gambling tax, would almost certainly generate more revenue for the county than impact fees.

Finally there is the issue of fairness. Proponents of impact fees say the people who create the demand for county services are the ones who pay the tax.

Interesting theory. But not a real accurate one. A couple with no children, for example, has to pay the same fee as a couple with four school-age kids. That's hardly fair. Even worse, a couple with no children that builds a house, say, next year, might be subject to the impact fee whereas the couple with four children who built their home last year would get off for free. The couple with no kids would actually have to pay more for schooling than the couple with four.

Further, a $4,000 impact fee might be chicken feed in the more metropolitan county subdivisions, where home prices often start at $200,000 and salaries routinely soar into six digits.

But here, where most of the jobs the county can attract pay in the $8-an-hour range, a $4,000 surcharge on a home is serious business. It's patently unfair for the county to say "well, we can't bring any decent paying work to the area, but to make up for it we will charge you an extra $4,000 for your new house."

Property owners already pay for county services through something known as the property tax. If the county really, really can't make ends meet it should raise the tax rates evenly and on everybody, not just those building a new home.

Perhaps one day the people-dam that is South Mountain will burst and thousands of new residents will flood into Washington County to escape the congestion of Frederick. Houses will sprout up everywhere, good, high-paying industries will move in, farmland will become an endangered species and schools will have to be built to handle all the new children.

When the signs show such a migration is imminent, that will be the proper time to talk about impact fees. But not now.

Tim Rowland is a Herald-Mail columnist.

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