1. Transportation

After failed transportation vote, commissioners may undo higher fees on developers

Published Jun. 11, 2016

TAMPA — New and higher fees on developers were just approved in April, but Hillsborough County commissioners are already considering lowering them.

It's the latest fallout from Thursday's 4-3 vote against a referendum — the second no vote in seven weeks — that would have asked voters to raise the sales tax from 7 to 7.5 percent to pay for transportation projects.

The new mobility fees, approved unanimously April 26, will charge builders more for new construction and make developers "pay their fair share," as several commissioners put it. The fees are even higher in rural parts of Hillsborough, where growth costs the county more to service with roads, schools, utilities and the like.

They replaced impact fees, which generated very little money for the county and actually incentivized people to build outside the urban core.

It was expected the money would one day become a steady stream of revenue to help fund transportation. Even if commissioners and voters didn't approve a sales tax increase, at least they walked away from the debate with something in hand.

But here's why its fate is so closely tied to Thursday's vote: Developers have to pay significantly higher mobility fees if the county fails to pass a sales tax increase.

In one estimate, the county would collect about $250 million more from developers over the next three decades, or $8.3 million a year, if the sales tax didn't go up versus a 20-year surcharge.

That's because the county didn't want to tax developers double by coupling higher fees with a higher sales tax. But without the tax, the fees will be much higher. Building a single-family home in urban Hillsborough will cost $6,368 in fees without the sales tax. Had it passed, it would have cost $4,581. A bank with a drive-in will cost $7,000 more to build now and new retail space will come with a fee of $3,400 more per 125,000 square feet.

But the day after the commission approved the new mobility fees, April 27, it also rejected the transportation referendum — and then did so again Thursday.

Commissioner Sandy Murman, who helped lead both charges to kill the sales tax, first suggested days after the April vote that mobility fees may need to be changed or delayed.

On Friday, Murman said mobility fees will be reviewed alongside her proposal to allocate future growth in property and sales taxes toward transportation.

"If for some reason it's not palatable to the development community, then we'll go back and review these rates just to make sure they're reasonable as they move forward," Murman said. "Everything will be reviewed before the actual implementation dates."

Commissioners are already hearing complaints that the fees weren't high enough.

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"You sit there today and tell us we need to raise taxes, but you haven't done a thing to fix the root cause of the problem," community activist George Niemann said at Thursday's public hearing on the sales tax. "Make growth pay for itself."

Mobility fees are scheduled to go into effect Jan. 1. The amount they are expected to bring in will vary considerably depending on how many people take advantage of a program to buy back or use roughly $90 million in building credits awarded under the previous system.

In the first 10 years, the county estimates an average of $15 million a year will be raised from mobility fees. Had a sales tax passed, it would have been $9.9 million.

Developers acknowledged that the fees, which stayed flat for decades, should go up. But those who backed higher rates thought it would be a piece of a larger transportation initiative.

"The mobility fee itself is not intended to be the sole source of transportation funding," Tampa Bay Builders Association president Mark Spada told commissioners during Thursday's public hearing while backing a sales tax surcharge. "And as such, our support of the fee remains conditioned upon additional funding sources."

In that sense, Commissioner Les Miller wondered: "Do we have to go back and visit this thing all over again?"

Commissioner Kevin Beckner said the county is in "unchartered waters" because it's not clear what Murman's proposal, if approved, will change.

"I've always had the position that it needs to be fair and equitable for both parties," he said. "And now we're going to have to re-evaluate and see if that's the case."

Contact Steve Contorno at Follow @scontorno.


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