Impact fee rise pondered by Owens

Residential developers would help pay more of school costs

April 04, 1999|By Tom Pelton | Tom Pelton,SUN STAFF

Anne Arundel County Executive Janet S. Owens is considering raising impact fees for residential developers to help pay for school construction and renovation without raising taxes.

"I know the developers will fight it," Owens said in an interview last week. "But our schools really need the money, and residential development doesn't pay for itself."

Increasing the $2,096 fee that builders pay for each singlefamily home to help the county build new classrooms might also help the executive out of a political bind.

During her fall campaign, Owens repeatedly promised not to raise taxes. But shortly after she took office, she received a consultant's report saying the county school system faces a $400 million bill for repairs and renovation.

This is in addition to an estimate of more than $250 million over five years to build schools and add classrooms. Although impact fees pay for about 13 percent of the county's cost of school construction and could never cover this amount, Owens' staff is studying a possible increase because the fees have not risen in a decade and are low compared with those of other jurisdictions, county officials said.

Fees in Calvert and Frederick counties are as much as 50 percent higher for single-family homes than in Arundel. Prince George's County levies a "school facilities surcharge" in some areas that is 25 percent higher than Arundel's impact fees. Howard County uses a formula that charges developers about 35 percent more than Arundel for an average home, according to a survey by the state Office of Planning.

Owens said she does not know how large an increase she may recommend to the County Council. But she said the school system desperately needs the money for such projects as a new high school in west county.

Owens said she will know more about a possible fee increase by next month, when she delivers her proposed fiscal 2000 budget to the council. However, the council is expected to vote on the fees in separate legislation later in the year.

Michael DeStefano, an owner of Sturbridge Homes construction company in Annapolis, said it would not be fair to raise impact fees because it would force new-home buyers to pay for improvements from which all residents would benefit.

DeStefano, whose company builds about 120 homes a year in the county, said increasing impact fees would be a sneaky way for the county to avoid the limit on tax increases that voters imposed in 1992.

The socalled "tax cap" prohibits the county government from increasing its annual property tax revenues by more than 4.5 percent or the rate of inflation, whichever is lower.

"There are a lot of problems with raising the impact fees," Destefano said. "For one, it would raise the price of homes. The entire cost will be passed along to home buyers. And it's becoming ridiculously expensive to live in this county."

Susan Davies, codirector of government affairs for the Homebuilders Association of Maryland, said she might support an increase in impact fees if the county ended its policy of not issuing waivers of growthcontrol laws in areas with crowded schools.

The policy, started by former County Executive John G. Gary, forbids home construction in a few of the county's fastestgrowing areas.

"It has been some time since impact fees have been raised," said Davies. "Perhaps the county could dispense with its waiver policy and raise the impact fees."

Daniel E. Klosterman Jr., a Democrat and County Council chairman, said he supports raising impact fees, not only for schools but also for road construction.

For the past decade, the county has charged builders $533 for each singlefamily home to help pay for road construction. The roads fee is in addition to the $2,096 to help pay for school construction.

"The developers are only paying for a tiny part of the cost of building the county's infrastructure," Klosterman said. "It is true that raising impact fees might mean it costs more to buy a home in our community. But we all have to pay for these services, and the cost of building infrastructure is becoming exorbitant."

James J. Cannelli, an assistant director of the county's Department of Planning and Code Enforcement, said the county has not changed its impact fee rates since the County Council created the fees in July 1987.

The law phased in rates that by 1989 were at their current levels. Developers building townhouses pay $1,346 per unit to help build schools and an additional $493 per unit to construct roads. Those building apartments pay $950 per unit for schools and an additional $381 for roads.

Impact fees contributed $6 million for school construction and $3.5 million for road construction in fiscal 1998.

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