Developers Ambivalent About Impact Tax For Roads

October 27, 1991|By James M. Coram | James M. Coram,Staff writer

Developers and homebuilders have some misgivings about the county's plan to raise money for roads by imposing an "impact tax" on development. However, they plan to accept, and in some cases, welcome them.

County Executive Charles I. Ecker announced plans Tuesday to make impact taxes a central part of his proposed adequate public facilitiesordinance. He predicts the tax will raise $6 million for county roads.

"If it be the will of government that we have (an adequate publicfacilities ordinance), then I guess we will have it," developer JohnTroutman said.

Impact taxes differ from impact fees in that fees are restricted to a particular location, while taxes can be levied anywhere in the county, Ecker said.

The tax would be imposed withoutexception on all commercial and residential construction and would be used solely for road construction and improvements, Ecker said.

According to James H. Eacker, chairman of a committee charged with developing an adequate facilities package, use of the impact taxes would be severely restricted. Eacker's committee, composed of government officials, civic leaders and developers, has been working six hours aweek since December on the proposal.

The money would be put into a "development road improvement fund" and withdrawn only if the county matches it at a rate of 2 to 1. Use of the money would be restricted to major capital projects.

Troutman said that as long as the money cannot be used for any purpose other than road construction, the tax would probably be good for the county.

The county "did a good job with its infrastructure in terms of water and construction," Troutman said, "but not much in terms of road improvements. To that extent, (the impact tax) would be a plus for thecounty as a whole and for developers who would be able to proceed without traffic constraints."

The drawback, Troutman says, is that the cost of the tax would be passed on to consumers.

"It will make for more expensive, less affordable homes for people," he said. "It will raise the level of income needed for people who own or rent in the county."

Increased costis also the concern of developer Earl Armiger, who said he opposes impact taxes in principle because they drive costs "higher and higher."

"County homeowners are already paying more than their fair sharefor infrastructure -- more than anywhere in the region," Armiger said.

But if the taxes ensure a "predictable, steady, uninterrupted business climate -- if there is no moratorium so that we can say with predictability that what we start today can be completed -- then it might be a creative solution to a difficult problem, a bitter pill that I am willing to swallow," Armiger said.

By pooling county money with impact taxes, the county could make better use of its money and complete major road projects instead of minor intersections, Armiger said. In that case, the tax would be a "rather innovative, creative approach," he said.

Armiger said he was speaking solely as a builder and not as president of the chamber of commerce. He said the chamber's legislative committee will be studying the administration's proposal "and, hopefully, forming a position."

County homebuilder Joseph A. Firetti, like Armiger, had no official statement. However, Firetti said the idea of a tax "concerns us a little bit" because he fearsit may be converted to other uses.

"I don't like the way the word'tax' sounds," he said.

He also said he is not sure what happens if the county is unable to match the tax money. "The roads may never get built," he said. "I don't understand their thinking. I am puzzledas to why this popped up at the last minute."

Firetti said that with "some modification," the impact tax portion of the adequate facilities package "would probably be acceptable to us."

David Forester, senior development director and vice president of the Rouse Co., said he could not say what effect the proposed impact tax would have ondevelopment of River Hill, Columbia's last village, until he sees the legislative proposal.

"We will continue to try to develop a range of housing types," he said. The impact tax would be "another cost parameter, another cost of development."

Since the county is so small, pooling funds for road construction is probably an efficient use of money, Forester said. If the county uses the impact fee revenue where there is greatest need, he said, River Hill might benefit becauseof all the interior roads that will have to be built there.

Homebuilder Chip Lundy said he will put aside his reservations about impact taxes simply because he trusts the adequate facilities committee tocome up with the best compromise possible.

The committee includesofficials from the county public works, planning and zoning, and legal departments, as well as representatives from the school board, county civic organizations and the development community. It also includes some holdovers from a committee appointed last November by then-County Council chairman, Shane Pendergrass, D-1st.

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