PROPOSED IMPACT FEE INCREASE

Martin County has been calculating and collecting Impact Fees on new homes and businesses for over twenty years. The methodology for developing impact fees is complicated, yet simple in concept. The costs of the capital improvements needed to maintain the current “level of service” (LOS) divided by the projected population increase equals a per person valuation. Each new person or business added to the population then must “ante up” funds for the capital improvements required by their presence.

Calculation of actual impact costs are extremely difficult and almost require a case by case study, i.e. a large home with few occupants should, in theory, be charged less than a small home with many occupants. The County inputs the estimated costs of existing and future improvements into a computer program that generates the amount to be attributed to each new person or business building in Martin County. This computer program weighs the impact by what is called a “method of attribution” using utilization/traffic generation rates for each different land use. In practice, the many variables are simply averaged, so the result is impact fees that are higher for larger, more valuable, houses and businesses.

The community’s elected officials decide what kind of improvements are wanted and needed to maintain the LOS through its adopted Comprehensive Plan and Capital Improvements Plan, or CIP. These may incorporate new services, but Impact fees may not be legally used to increase the existing LOS. For example, if traffic is bad, impact fees can be used to make improvements so it does not get worse, but they can’t be used to make traffic better. If schools are already crowded they cannot be made less crowded with impact fees, the voters must decide to fund more new schools through normal methods of taxation. Further, Impact fees cannot be used for operational costs such as personnel or maintenance. In theory, these are to be paid by the increased tax base of the new arrivals.

Martin County’s population increase has been relatively small, about 3 % per year. However, much of the influx has resulted in new housing, and the impact fees already in effect have produced a lot of funds with a mixed blessing. The amount of money available has provided excellent new facilities, but has also allowed costs and inefficiency of County projects to drastically escalate, requiring more fees and taxes. The estimated cost of new public buildings is now over $200 per square foot, more than double the private sector. The cost for 96 new beach parking slots is estimated at $1,588,543 or over $15,000 per parking place. One new Emergency Services facility of questionable value is now projected in the CIP at $245 per sq. foot. Overall, the estimated capital costs for Emergency Services in Martin County have increased an average of 34% per year since 1999 against the 3% per year increase in population. * Much of these outrageous acquisition costs will be borne by Impact Fees. However, the real problem for taxpayers comes later as operating, maintenance, health care and retirement costs to support these facilities and staff soars. [* County 2005 Impact Fee Study]

Most of us probably believe we paid our fair share of the costs associated with our arrival in Martin County. Newer residents have probably paid more than the old timers, since impact fees were first adopted in 1985. Some believe that new homes and businesses currently pay enough; others worry that increases, especially on businesses, will stifle our economy; still others think higher impact fees are desirable as a method to inhibit growth.

We support the collection of fair and equitable impact fees necessary to cover the real cost of growth, but Martin County’s proposed new impact fees will be three times the state average. The public needs to be careful that higher impact fees are not used as a shield to hide inefficient government operation, political patronage and/or used as a very inefficient method of trying to control growth. Here in Martin County the size and cost of government have risen much faster than the population since impact fees began. These capital improvements that exceed requirements may be appealing, especially if the perception is that it is being paid for by new arrivals. However, the continued disparity between population growth and increase in services and facilities eventually requires a large increase in the taxes collected from all of us.