Monday, April 10, 2006

Impact Fees: Public Loves 'Em

An anonymous poster (and sorry, poster-named-Rick, but it doesn’t bug me if they’re anonymous) had this to say about my March 27 post “Developers 1 – Everyone Else, O” (see below): “Impact fees get no traction with the public because we know we pay TOO much already and GovCo makes too many bad decisions.”

Hate to break it to you, but a recent survey just released found overwhelming support for impact fees. Now, the fees may or may not make sound public policy – that’s a whole other question. But they’re enormously popular with the public.

The poll results, released Friday, were plastered all over the Observer’s front page. If you missed Saturday’s Observer, here’s a link.

It was taken by MarketWise, for Mecklenburg County’s School Building Solutions Committee, a.k.a. the Martin Committee, chaired by Republican former Gov. Jim Martin, who, before he was governor was a county commissioner, then a U.S. House representative. The survey was Feb. 21-March 17, and involved 623 phone interviews.

Respondents were asked about four possible alternative revenue sources, worded exactly this way: increasing local sales tax, increasing cigarette tax, a tax on the sale of land, charging impact fees to developers.

On page 30 of the PowerPoint presentation, you’ll find an interesting graph showing their replies: 79 percent of respondents who voted in last fall’s school bond referendum, and 76 of those who hadn’t voted, said they’d support impact fees.

The way it’s worded makes it sound as if developers paid the fees and didn’t pass the costs on to homebuyers, which is what's more likely to happen, although not always. After all, to compete on price, developers sometimes will eat a percentage of the impact fee costs, or choose to lower costs in some other way.

Anyone who isn’t planning on buying a new house is going to think impact fees are a great idea, and a sales tax – which everyone would pay – is a crummy idea. The poll results show exactly that: 25 percent of voters and 23 percent of nonvoters liked the sales tax idea. The tax on the sale of land (also known as a real estate transfer tax) got support from 39 percent of voters, 36 percent of nonvoters, and the increase in cigarette taxes got 76 percent support among voters and 79 percent support among nonvoters.

Reality checks: The cigarette tax is a state tax, not locally adopted. All three other local option taxes require the N.C. General Assembly to give its blessing.

If you’re among the many who think impact fees are a good idea, don’t be beating up on your school board members. They have nothing to do with impact fees. They can’t levy any taxes at all.

Find your state representatives in the N.C. House and N.C. Senate (Here's a link to help you find your representatives. You'll need your Zip Code-plus-four) and beat up on them. THEN call Charlotte City Council members and Mecklenburg County commissioners . They’re the ones who’d have to adopt the fees if the state allowed it. And they'd surely have to lobby the state, too, just for permission.

And if you don’t like impact fees, tell them that, too. I’d rather they be listening to the whole realm of public opinion than just to the developers.


Rick said...

Thanks for the link to the excellent source documentation. Lots of food for thought in there.

Also, it's refreshing to see an admission that the Impact Fee question was very leading. Here's what it actually said:

"Please tell me if you would strongly support, somewhat support, somewhat oppose or strongly oppose each of the following alternative revenue sources.
40. Increasing local sales tax
41. Increasing cigarette tax
42. A tax on the sale of land
43. Charging impact fees to developers"

I don't doubt that most people would think that's a great idea since it is specifically worded that the fee will be charged to someone else. I wonder if it would have gotten the same enthusiastic response if it had been worded:

"43. Impact fee charged to buyers of a new house" (leading in the other direction)


43. Impact fee charged with development and sale of a new house (leading that it would be split between developer and buyer)

Also, it would be very interesting to know what the response would be for different actual end-uses of impact fees.

Would people respond the same if they were used for renovations rather than new school construction? My guess is not likely since a majority of people indicated that overcrowding was a major problem as well as wasting money. (Not to mean that renovations are a waste of money, but they may be seen that way to parents with kids in overcrowded schools.)

Anonymous said...

I think it's worth paying a little more if the money goes to schools.

i am not Mary Newsom said...

Yes, that is a very leading (more like MIS leading) way to ask that question.

Why not couple that with:

1) Do you think government wastes money

2) Do you think impact fees will solve the school problems.

3) Do you think you are UNDERtaxed

4) Do you think income taxes should be lower?

Impact fees get VAGUE support in carefully worded surveys because most people think impact fees affect someone else (in reality that is prob. true). Most people already own their homes, so they think it has no immediate effect on them.

How about RETROACTIVE impact fees?

If you bought a house in Dilworth 10 years ago, then you also pay an impact fee. Why? Because you DO impact the schools, police, etc. It does not matter that you were here first, you still have an obligation to help pay.

Lets not exclude uptown. Lets get NASCAR to pay an impact fee, and lets slap all those new condos with a $5,000 impact fee. Those folks are rich, right??

More hypocrisy from Mary Newsom.

Punish only the newcomers and developers, because old Charlotte folks (of which she is one of) should not pay for all this growth.

Impact fees would be fine if taxes were lower, but with the highest combined taxes in the Southeast, the last thing we need is one more fee. And don't be fooled, developers would not pay this. It would be passed on 125% to the buyer, and drive up costs for everyone.

Let me reiterate: Government has PLENTY of money, what they need is a lesson in priorities.

Jim said...

I’m confused I thought the Lotto was the solution to all the school funding problems.

Ed said...

My gosh! You've discovered that some people are intensely in favor of taxes.... that some OTHER people will have to pay! I'm shocked! Shocked!

I am not Mary Newsom said...

'Public loves 'em'?

I am not sure that carefully crafted survey means 'public loves them.'

Here is the only accurate survey question:

Go to each and every new homeowner who is at the title company closing on their new home and ask, 'would you like to pay an impact fee on your new home?'


Everybody is a liberal until their interests are at stake.

It is easy to be noble with someone else's money.

School spending per student is at an all time high, even factoring inflation, and the CMS schools are in the toilet.

It is bad management, and an unresponsive bohemoth of a school district.

All the impact fees in the world will not solve bad management and poor decision making by the idiots in local government.

They are like spoiled teenagers who you give $100 to and they will run right out and buy an iPod and then come back because they have no money to buy gasoline for their car and ask for more.

Why do insist on continuing to REWARD bad behavior by government with MORE money.

Give them LESS and tell them to make it work but cutting waste.

Anonymous said...

Now you went and did it, Mary--you hit them with evidence. It's amusing to watch them gyrate and contort back into the 'ol "bad gubbermint" schtik!

Think of population growth like one might a business. There is a growth curve. At a certain point one reaches a point of diminished returns. I think Charlotte is at that point of saturation. Funding mechanisms that used to work no longer work. New methods are needed to react to new population realities. Perhaps impact fees were not needed in 1977 because the rate of growth and the ability of the community to react accordingly were not overly stretched. This is no longer the case.

Anonymous said...

So the county is considering impact fees to fund school construction. Anybody notice that the city is also considering their own impact fees to fund the Transportation Action Plan?

Rick said...


I find it interesting that you focus on one of the solutions that will require a long-term statewide political effort to implement when the survey results clearly indicate what people are concerned about most is suburban overcrowding that needs to be addressed now. The best way to do that in a timely manner is to figure out how to create a bond package that can pass this fall. At best, convincing the state that impact fees are needed will take much longer to pass and to see a significant inflow of funds.

On Slide 20 of the presentation summarizing the survey findings, the first item, “8. Suburban schools overcrowded” is the only item that had a majority of respondents agreeing, regardless of whether they voted for or against the bonds. See for details:

The people who agreed with this statement and voted FOR the bonds did so because they WERE willing to spend money on inner-city and middle ring school renovations as long as suburban overcrowding was relieved. The people who agreed with this statement and voted AGAINST the bonds did so because they WERE NOT willing to spend money on renovations as the price for relieving suburban overcrowding. This second group of people was probably also the same group that thought property taxes were way too high and that CMS managed its money poorly.

It seems obvious that the way to pass a bond package is to focus on this issue – suburban overcrowding. Any bond package that plans to spend at least 75% of the money on new suburban schools would most likely pass. All of the people who voted for the last bond package who had this as their primary concern would vote for this one again, and many of the people who voted against the last package would vote for a smaller suburban-focused package. Obviously, there would be some people from the inner city who would change their votes as well and vote against a suburban focused bill, but this would not tip the balance as significantly (See below for details.). The problem is that this workable solution won’t fit with the liberal agenda of the larger school board and would be political suicide for Vilma Leake, George Dunlap, and Coach Joe to support.

Notice that the following didn’t even make the top 14 out of the 20 measured factors:

9. The current school assignment plan creates inequities for inner city children.
22. There is a lack of diversity as schools become re-segregated under the current pupil assignment plan”
23. There is inequality in CMS schools with regard to building facilities.
24. There is inequality in CMS schools with regard to teachers and administrators

(You have to look in the actual questionnaire to see that these didn’t make the cut.)

Since these factors were not strong influencers, it debunks the theory that inner city people voted against the bonds because they thought they were unfair. They must have voted against them for many of the same reasons as suburban voters - including poor management and unaccountability.

Anonymous said...

Did you guys read this survey???

Q: Which evil despot do you find LEAST offensive?

A. Adolph Hitler
||||||||||||||||| 33%

B. Joseph Stalin
|||||||||| 19%

C. Pol Pot
||||||||||| 21%

D. John Mugabe
||||||||||||||| 27%

So the survey results are IN:

'Adolph Hitler, Public Love 'Em'

-Mary Newsom


Quit patronizing us with Charlotte Observer dogma.

I am not Mary Newsom said...

I have a simple solution:

Deconsolidate CMS, and let each town like Mint Hill, Matthews, Pineville, etc. all fend for themselves.

The solution is to escape the stupidity and waste of Charlotte/Meck. government.

This city has outgrown the small town hicks who are attempting to run it and pretend they are not in wayyyyy over their heads.

Anonymous said...

Why shouldn't the people who are putting the most strain on the school system pay for them?

I bought a house in Dilworth 2 years ago, and my son now goes to a school that wasn't over capacity. My burden is much lower than someone buying a new house in some ridiculously named subdivison in far south Charlotte.

The simple truth is that suburbs are a drain on governments because they don't maximize infrastructure investments. If people want new, bigger, and more, then they should pay for it....I certainly don't want to subsidize new schools for other people who think the city is a scary place.

Jane said...

Each time a new condo goes up in Uptown or in the in-town neighborhood, the City gets all the benefit of the increase in new property tax revenue but does not have to build new schools, roads or parks to accommodate the new development. In the suburbs, the City has to subsidize new homes and condos for many years before they end up paying for themselves. Impact fees are charged on new development to get them to "upfront" some of the cost associated with their impact so that it doesn't come out of existing resident's pockets in the form of increased property taxes. With 350,000 more people moving to Charlotte in the next 25 years I think many people would support impact fees so they don't end up having to subsidize all the new growth for years to come.

Rick said...


Just to be balanced...

Light rail is a govt transprotation and parking subsidy for many people in those condos. Most Mecklenburg county suburbanites will rarely if ever ride the train, but urban condo dwellers will.

Since the fares do not even come close to covering the costs of light rail, all of the taxpayers across the county, state, and country who pay into the light rail boondoggle are subsidizing those people.

Just to be fair...

I am not mary newsom said...

>>Each time a new condo goes up in Uptown or in the in-town neighborhood, the City gets all the benefit of the increase in new property tax revenue but does not have to build new schools...>>

Lets not forget that almost ALL of the new development uptown is because of tax policy and government subsidy.

If there were not a light rail, and arena, NASCAR HOF, musuems, and corporations buildinng new builds, there would be absolutely no reason to live uptown.

All of the above are either directly or indirectly subsidized by government through tax subsidy or tax policy.

It is well documented that new urbanism gets legs not because people want to live in urban areas (in fact this years realtor survey and recent census survey say the exact opposite), but because of financial and tax policy incentives.

The false hope that rental car and increased 1/2 cent taxes etc will pay for this is insane. Make the new residents who are buying land uptown pay for all these new features via impact fees.

I am not aware of $1 billion in government spending going out into the suburbs to make THAT a more attactive place to live. That all happens on its own.

Additional when it comes to schools, the state and federal government pay the majority of the bill.

But brace yourselves, Charlotte (according to Pam Syfert) is going to have to raise property taxes to pay for basic governmennt services like police.

Amazing that when it comes to light rail and arenas that there is money flowing like water, but when it comes to cops, we're broke.

These clowns belong in Federal prison.

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