Proposed impact fee would mean higher taxes

After review of our county’s newest proposal to again raise impact fees, it would appear that in doing so, our property taxes would actually be increased. Of course this sounds ridiculous at first, until you begin to realize the following, so please read on.
 
For a moment, let’s forget that the latest impact fee proposal would require that new homes be charged almost three times the current fee in a residential market that has been on the decline since the end of last year, and that these fees were doubled less than two years ago. For now, let’s simply consider what happens when we look at the commercial side of the equation.
 
First of all, as commercial impact fees are partly calculated based upon the type of use, meaning the type of business venture proposed for a site, as well as the size of building, these fees will vary from business to business. However, the current consultant to our county recommends that a 5000 square foot Medical Office would require an impact fee of almost $150,000.00 for the privilege of serving the needs of our citizens. The same size bank with drive thru lanes would require an impact fee of just over $280,000.00. Believe it or not, the same size fast food restaurant with drive thru lanes would require an impact fee of over $650,000.00. Yes! That’s six hundred, and fifty thousand dollars, which makes no sense.
 
It’s of course true that these fees are a one time expense, paid at the time of construction of new buildings, just like architectural fees, site engineering design fees, utility connection fees, permit fees, and not to mention the land cost and finally the cost of constructing the building. The point is that these newly proposed impact fees on commercial buildings add an insurmountable burden on new or expanding businesses.
 
So consider these questions:
•If these new impact fees place businesses at a competitive disadvantage, compared to similar businesses in the area, how can they expect to survive? 
•If these added costs don’t make economic sense to the medical and business community, then isn’t it likely that these professionals will decide to do business elsewhere? 

So then, doesn’t it follow that there will be significantly less demand on our county’s vacant commercial property, upon which we depend so heavily for tax revenue? If so, does it not stand to reason that vacant commercial property values will fall, and then doesn’t this mean that eventually the property assessments fall?
 
Assuming the above logic to be sound, it is my estimation that at this point, a couple of things happen. However, we must first also realize, that apparently, our county has not learned to do without. By that I mean that our infrastructure needs (the construction of roads, schools, public buildings, parks, etc.) seem to continue, and must be funded by some source of revenue. So if these needs continue, but our vacant commercial property assessments go down, the only way to offset the continued infrastructure costs is to raise the tax millage rate. If the millage rate goes up, this will affect all properties, including residentially owned vacant and homesteaded lands. Remember that it’s only the assessment on homesteaded properties that are protected by the “Save our Homes Act”, which is currently capped at 3% per year. Millage tax rates can be increased up to $10.00 per $1000.00 of taxable value. 

The current millage rates are considerably less than the 10-mill limit, so this leaves plenty of room for our county commissioners to raise our taxes. Furthermore, county commissioners also have available at their disposal the opportunity to impose municipal service benefit units (MSBU’s) or municipal service taxing units (MSTU’s) for taxing purposes.
 
Unfortunately, it doesn’t end there either. The existing commercial businesses in our county will likely have their property assessments go up. This will likely happen as they appear more attractive to business wishing to acquire their property, and thereby avoiding exorbitant impact fees attached to new construction on vacant land.  With the higher assessments, and the higher millage rates on these establishments, taxes will likely be raised to a point that it makes it impossible for the smaller “Mom & Pop” businesses to compete against the regional and national chain type business.

Certainly infrastructure needs must be addressed as our county grows. Moreover, sound infrastructure investment must be funded, but only with a fair and equitable impact fee schedule. Without a doubt, the currently proposed impact fees are not fair, and not equitable. Therefore, there is but one conclusion if these fess are adopted as proposed; higher property taxes for every owner of vacant residential property, existing business and homeowner of our county.