Impact fees could be a tool to increase revenue and to manage growth

Published January 20, 2006

The use of impact fees should be included in the General Assembly's discussions of property tax relief for several reasons.

Gov. Mark Sanford raised the subject during his State of the State address Wednesday. He pushed the fees as a method of making those who move to South Carolina pay for the added roads and schools required by growth.

It's a worthwhile plan. Local governments have been limited in their ability to raise money, forced to rely almost solely on the property tax. Allowing them other revenue streams will reduce property taxes.

And impact fees can be helpful to pay for specific needs. For instance, when a new subdivision locates, the impact fees charged for the new homes can be used to help pay for widening the road that leads to the subdivision.

Other states charge an impact fee when a new resident first registers an automobile in the state. The money from the one-time charge helps pay for roads.

But impact fees can be useful beyond generating revenue and easing property taxes. Local governments should be given wide latitude in their implementation of impact fees so that they can use the fees to help manage and channel growth.

Counties with a clear growth management plan -- unlike Spartanburg County -- could assess higher impact fees in areas they want to reserve as scenic or agricultural land.

They could charge higher fees in areas without major roads or water and sewer lines to cover the cost of the necessary improvements.

They could charge substantially lower or no fees in areas they want to redevelop, like blighted inner cities. And they could spur growth through lower fees to areas they've targeted for development, such as along new interstate routes.

Impact fees fit in well with property tax reform, but there are other reasons that such fees would make a useful tool to local governments and communities with a coherent vision for their future.

Lawmakers should avoid any major tax measures until they come up with a comprehensive plan to redesign the state's entire tax structure. But they seem bent on passing property tax reform. If so, they should include impact fees in their tax reform plans and craft their legislation so that cities and counties can maximize the use of such fees to plan their growth.

User Comments

No comments have been posted on this article. Be the first to comment.

Don't get the Herald-Journal delivered to your home? Click here for a special offer

©2006 Spartanburg Herald-Journal | Staff directory