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Local government's charges should cover cost of service

May 24, 2002|BY BOB MAGINNIS

At a time when many local governments are looking at things like impact fees to help them keep pace with rising costs, it seems incredible that for more than a dozen years, the borough of Chambersburg has charged nothing for hook-ups to its water and sewer system.

That will change Jan. 1, but there's a lesson here for all local governments facing development pressure.

Give borough officials credit for not trying to fudge the details. Borough Manager Eric Oyer told the borough council this week that if the new $3,035 fee had been in place for the past 12 years, Chambersburg would have had $2.5 million to use for capital improvements.

Had there been a fee, the borough might not have needed to borrow $2 million for a current water project. And Oyer said that last year's 20 percent rate hike for water wouldn't have been as large.

The lesson here is that if local governments don't charge developers enough to cover the cost of doing business, then the general taxpayers have to shoulder a larger part of the burden.

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For example, during a search for budget savings, Hagerstown City Councilman Kris Aleshire discovered that the fees charged for some of the city's inspection services and reviews weren't covering the city's costs for providing those services.

Adjustments to those fee schedules will be made, but just as in Chambersburg, the general taxpayers picked up the difference between what local government charged and the true cost of the service.

Over the years we've heard low fees excused on the grounds that new development would provide new taxes. That's true, provided it's commercial or industrial development. Residential development seldom covers the cost of providing services like schools.

As development heats up locally, all local governments would do well to look at whether the cost of providing service is covered by the fees they charge. Existing taxpayers shouldn't be asked to finance any part of new development.

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