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Impact fees revisited

February 10, 1999

Facing millions in new expenses for the school system, the Washington County Commissioners are taking another look at impact fees. Nine years after receiving the state legislature's approval to enact the fees, the county board may be ready to put them into place. Before that, we recommend they look back at a report done on the issue by a citizen study committee back in 1989.

A year after that report, the Maryland General Assembly gave the commissioners the power to set fees, provided that they first create a department of public works and enact an adequate public facilities plan. Both have been done, allowing the county to limit development in areas where schools, roads and other services are deemed inadequate to handle it.

The best argument against impact fees is that if they're set high enough to produce significant revenues, they would discourage growth and hurt homebuilders. In 1997, Frederick County Planning Director James Shaw said that county's $2,000 impact fee raised only $2.8 million a year, about half the cost of new schools required by additional development. Impact fees also require a significant amount of record-keeping, since court decisions have put tight limits on how the fees can be spent.

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But on the other side of the question, new residential development rarely generates enough in taxes to pay for the services it requires - like schools, roads and law enforcement. Without additional fees, those costs must be shared with existing residents, many of whom are on fixed incomes.

But the best arguments for fees may be that according to the findings of the 1989 citizen study report, they cannot be levied retroactively. It states, in part, that impact fees "can only be used to fund new or expanded infrastructure required by the proposed new development and cannot be used as funding to "catch up" with infrastructure that has not kept pace with growth within a district.

In other words, if the county doesn't levy impact fees now, it can't come back and do so later. As the 1989 report noted, impact fees aren't the only answer all the county's financial needs, but as one part of a larger plan, they make sense.

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