Impact Fees

The sluggish housing market and the ensuing decline in school enrollment has the Carroll County Commissioners considering a proposal to drop impact fees on new home construction for the next few years. The county collects the fees on residential construction to offset the growth-related costs of building the schools and other infrastructure needed to meet the demands of new residents. The fees, which depend on the size of a new home and can be as much as $6,000, pay to build new schools and parks and provide recreation.

I know I've said it before, but it's more true than ever: It's time to revisit the question of Code Home Rule for Carroll County. The Board of County Commissioners can propose such a change, then the voters can approve it in the next general election. Easy as pie. What would this mean? Well, for one thing, all those Carroll County local bills in the State Legislature would no longer have to be submitted. Instead, the commissioners could enact or repeal any bill which applied only to Carroll County.

The Anne Arundel County Council has rejected a plan to roll back impact fees for developers and instead voted unanimously to slow future increases in order to help the building industry as it deals with a sluggish economy. In a compromise, the fees will be doubled over two years, instead of increased annually. The bill, co-sponored by Councilman Ronald C. Dillon Jr. and three colleagues, sought to maintain the 2009 rates for this year and shift future rate increases back for a year.

The sluggish housing market and the ensuing decline in school enrollment has the Carroll County Commissioners considering a proposal to drop impact fees on new home construction for the next few years. The county collects the fees on residential construction to offset the growth-related costs of building the schools and other infrastructure needed to meet the demands of new residents. The fees, which depend on the size of a new home and can be as much as $6,000, pay to build new schools and parks and provide recreation.

In the current political climate, raising taxes is an exceptionally difficult task. Despite Carroll County's need for more revenue to finance school construction, the anti-tax sentiment is so widespread that the commissioners are constantly in a search for more politically palatable ways to raise revenue.Commissioner W. Benjamin Brown has focused on impact fees as the answer to Carroll County's fiscal bind. While impact fees may have a place in a balanced array of taxes, a heavy reliance on them is both ineffective and inequitable.

Facing a November deadline for breaking a nearly yearlong impasse over whether to raise development impact fees, Anne Arundel County elected officials will take at least another month to work out the details. With Anne Arundel lagging behind other counties in what fees it collects from developers to cover the costs of building schools, roads and other new services, the county has little choice but to boost its rates, supporters say. The sticking point lately has been a "grandfathering" clause that county officials say affects as many as 12,000 lots scattered throughout the county.

Considering that Westminster Mayor W. Benjamin Brown has announced he is running for Carroll County commissioner, he comes off as courageous for condemning what he says are the county's low rates of property taxes and impact fees. Especially in an election year, most politicians consider it political suicide to even suggest the need for higher taxes and fees.But Mayor Brown's stance is not as brave it might appear. To raise the additional revenue, he advocates increasing impact fees -- charges tacked on to new construction, ostensibly to pay for schools and roads -- because most county residents think they won't have to pay them.

Carroll County's commissioners have paid for three different studies on impact fees -- the charges levied on developers to cover the cost of new schools, roads and public parks. The studies, which cost $119,800, were supposed to create an acceptable formula for setting these fees. The commissioners weren't totally happy with the findings of the first two studies, and they are not likely to be satisfied with the latest, either.The most recent study recommended changing the entire structure of the fee system.

In their on-again, off-again relationship with development impact fees, the County Commissioners are about to tackle the issue again.For the third time, they will study the fees charged developers for the county's new schools, roads, sewers and parkland.In approving a $37,000 study by Carroll's impact fee veterans, Tischler & Associates Inc. of Bethesda, Montgomery County, the commissioners hope to, once and for all, come up with the definitive formula for deciding the fee.That formula has eluded two sets of commissioners since the fees were enacted in 1989.

Determined not to do anything to discourage development in the city, the Baltimore Planning Commission has voted unanimously against a measure that could have required builders to pay fees to neighborhoods hurt by development.The plan has been proposed by the Southeast Linkage Group, a coalition of southeast Baltimore neighborhoods that have felt the brunt of expensive waterfront developments.The group wants to establish impact zones in areas where development comprises 2 acres or at least 50,000 square feet.

The Anne Arundel County Council has rejected a plan to roll back impact fees for developers and instead voted unanimously to slow future increases in order to help the building industry as it deals with a sluggish economy. In a compromise, the fees will be doubled over two years, instead of increased annually. The bill, co-sponored by Councilman Ronald C. Dillon Jr. and three colleagues, sought to maintain the 2009 rates for this year and shift future rate increases back for a year.

Developers in Anne Arundel County might soon catch a break as the County Council considers legislation that would delay a scheduled increase on impact fees in order to encourage development during the current economic downturn. Councilman Ronald C. Dillon Jr. said the bill, co-sponsored by three colleagues, would maintain the 2009 rates for this year and shift future rate increases back for a year. The bill would be retroactive for developers who already paid the fees this year. The council is set to vote on the bill later this month.

Some Anne Arundel County homeowners can expect to share in at least $2.1 million - and perhaps as much as $4.7 million - in homebuilding fee refunds ordered by the state's highest court. But the money is probably not coming soon, as an eight-year legal battle enters its next stage. Which homeowners and the amount of the refund remain in question, and a county judge will consider that issue in the coming months. This month, the Maryland Court of Appeals ordered Anne Arundel to repay homeowners and a developer the fees that were not spent within six years of collection or were misspent, plus interest.

The state's highest court ruled Wednesday in favor of several Anne Arundel County developers and property owners who sued the county to recover millions of dollars in impact fees paid from 1988 to 1996. Development impact fees, which the county requires builders to pay to offset costs to public infrastructure, must be refunded if the county does not use the money within six years for the capital improvement projects for which they were collected. That suit originally was filed in February 2001.

The county is facing a $116.5 million budget shortfall for next year, and officials may have to consider layoffs and tapping into the $46 million "rainy day" fund for the first time. Budget Officer John Hammond presented some of Anne Arundel County's budget issues at Tuesday's County Council work session, where members also reviewed a county financial audit and asked questions of administration officials about a bill recently introduced to allow slots in the county. In fiscal 2009, the county saw a $43.2 million revenue shortfall, Hammond told the council.

Rebuilding a demolished home on an existing lot must occur within 10 years, if the property owner is to avoid the impact fee assessed on new residential construction in Harford County. The County Council enacted the 10-year limit on Tuesday despite strong objections from Councilman Dion Guthrie, who had called for giving homeowners a 15-year window to rebuild. Guthrie was advocating for a constituent with a large property, where several tenant houses were razed decades ago. The owner asked to have the fee waived for the homes he planned to build for his adult children.

Carroll commissioners are continuing to consider consultant's recommendation that impact fees for single-family homes be increased, but they said yesterday that no decision has been made.The fees might even be decreased, depending on how the latest population numbers fit into the formula for figuring the fees, Commissioner Julia W. Gouge said.Commissioners Donald I. Dell and Elmer C. Lippy said they would have to study the issue further before making a decision.Impact fees, adopted in 1989, are levied on residential development to pay for schools, parks and other public projects.

Although builders are not fighting the extension of school impact fees, they spoke out Monday night against everything they feel is wrong with the fee system.The fees, designed to pay for school space for children of new home buyers, place too heavy a burden on developers, "stifle" their ability to provide affordable housing, and are not matched fairly by the county, said Joseph M. Perry, of the local chapter of the Home Builders Association of Maryland, to the County Council.The council appears set to approve County Executive Robert R. Neall's proposal to make builders pay school impact fees in Glen Burnie and Linthicum, Annapolis and the surrounding area, and South County.

Anne Arundel County is on its way to returning some financial integrity to the fees paid by developers to offset the county cost of accompanying road and school improvements. The County Council this week approved legislation for a phased-in increase in impact fees, ending a 10-month debate over getting developers to pay their fair share. The bill was a compromise reached with County Executive John R. Leopold, who had pushed to revise impact fees that long ago failed to keep pace with the rising costs of road and school construction to serve new residential and commercial developments.