Hernando Commissioner Nick Nicholson's economic development strategy needs an overhaul. Nicholson wants to encourage new construction in existing developments and on empty parcels in areas already equipped with roads and utilities, a common approach known as in-fill development. It is smart thinking that, if successful, should discourage sprawl and concentrate job-producing industries in targeted areas like Spring Hill, Brooksville and industrial locations close to the airport and Interstate 75.
Yet, Nicholson also announced this week he wants to abolish impact fees, the one-time charges on new construction to pay for growth's strain on existing infrastructure. It was an oddball pronouncement coming amid a consultant's report on calculating future impact fees to assist Nicholson's desire to guide new construction into old developments. (The county has charged no impact fees for the past 15 months and doesn't plan to reinstitute its most expensive fees for transportation and education until November at the earliest.)
If Nicholson gets a commission majority to mirror his disdain for impact fees, a likely outcome considering past votes and public sentiments from Commissioners Wayne Dukes and Jim Adkins, it effectively kills the economic inducement for in-fill development. It will be awfully hard to push for in-fill if the county cannot offer reduced or waived impact fees as a financial incentive.
Nicholson's anti-impact fees stance also fails to acknowledge the professional advice from county planners and transportation consultants: Without impact fees, the county will have to rely more heavily on other revenue sources to pay for its future road needs. In other words, higher property, gasoline or sales taxes will be needed to make up a road-construction shortfall.
Eliminating impact fees might curry favor with the residential construction industry, but it is a shortsighted economic development strategy that simply pushes a greater share of growth's costs onto existing taxpayers. Nicholson also wrongly suggested construction of a new, middle-income residence generates enough tax revenue to pay for the government services the occupants will use.
That growth-pays-for-itself fallacy is one of the reasons for the county's stagnate finances. The overreliance on home building as the county's economic engine created a tax roll too dependent on residential property values. Local government revenue plunged initially when tax exemptions doubled for homeowners and then continued for four consecutive years after the real estate bubble burst.
Nicholson should have listened more closely to the county's transportation consultant who warned the county can only maintain inexpensive impact fees during minimal growth periods.
He can better advance his vision for in-fill development by adopting new impact fees that can be discounted for builders in specified regions. To do otherwise could doom Hernando County to long-term blight as it will be unable to serve the very businesses and residents it hopes to attract.