Once again, Hernando commissioners are being asked to subsidize a private, for-profit special interest touting dubious job-creation benefits. It's not a tax break for a new industry expanding the tax base and adding new high-wage jobs to the local economy. This is a tax shift, forcing existing property owners to pick up more of the tab for future classrooms, roads and other infrastructure expansions needed to accommodate new residents.
The plea from the building industry is to continue the yearlong moratorium on impact fees that is scheduled to expire in November. As an economic stimulus, it has proven to be an undisputed failure and there is no evidence to suggest that will change anytime soon.
Construction permits for single-family homes totaled just 144 in the first nine months of the current fiscal year — even with a waiver of the $9,238-per home impact fee. And that followed three years of equally abysmal activity when the county was charging just half of the per-home impact fee at the request of construction and real estate interests.
The benefits to the builders' bottom lines comes with a price to the rest of the county. Hernando's county government and school district failed to collect more than $4 million in impact fees that otherwise would have been available to help pay for roads, schools, parks, libraries, public safety and public buildings. It has left the county with just $15,000 to pay for growth-related library equipment, no additional dollars for transportation, and a five-year capital plan for the fire department running at a deficit. These are shortfalls that eventually will be spread among all residents via property, sales and gasoline taxes.
Commissioners should forget this proposed handout to the builders and, instead, give strong consideration to their own staff's plan. It proposes smaller impact fees — down from the highest levels adopted in 2005 — for parks, libraries and law enforcement and modest increases for fire, ambulance and public buildings. These would be considered Nov. 13 and not become effective until 90 days later.
The two most expensive impact fees — for schools and transportation — have yet to be calculated and wouldn't become effective for still several more months. The county hired a consultant to update its road fee, but the school district has yet to do likewise for classroom construction. State law requires such periodic studies to ensure the fees accurately reflect current road and school construction costs.
The staff proposal also allows additional wiggle room for builders' payments depending on when they file permit applications or obtain construction contracts.
The building industry should stop being greedy and endorse this deal. It means cheaper fees than what the county adopted in 2005, plus a likely grace period of up to half a year if not longer before school and road fees are updated and approved.
Last week, Bob Eaton of Artistic Homes urged commissioners to leave the fees at zero "if you don't want things to get worse than they are.''
It's a parochial view from a vested interest. Impact fees — one-time charges on new construction to offset needed infrastructure attributable to growth — are not crippling the home-building industry. The Hernando County economy relies too heavily on residential construction that tanked when real estate values burst amid overbuilding, mortgage fraud, investors withdrawing from the market, high unemployment and current homeowners forgoing new homes because they are unable to get a reasonable return on their current houses.
Commissioners have shown an openness to moving in the right direction by trying to diversify the local job market and by potentially guiding growth patterns via discounted road impact fees for in-fill development. Those are smarter tactics than an impact fee waiver that has not delivered an economic boost and simply has put the county further behind in meeting capital construction needs.
Commissioners should adopt the new impact fees and not allow themselves to be sidetracked by special interests seeking another entitlement.