At yesterday’s Wicomico County Council meeting councilman Bob Culver proposed abolishing the county’s education impact fee. While we sympathize with Culver’s desire to stimulate residential construction in Wicomico County, this is not the right solution.
While it was stated that enrollment in Wicomico County public schools will be down this coming year, there is no question that most students attend schools that are in excess of their designed capacity. In addition, any new residential construction, except construction restricted to seniors will most likely add to school enrollment. (Construction of senior housing is not subject to the impact fee.)
In the age of the revenue cap and flat or declining county revenue, some mechanism must be in place to help increase school capacity. The impact fee is that mechanism.
Councilman Joe Holloway suggested a compromise to Culver’s proposal – charge the fee when a home receives its certificate of occupancy. This helps to mediate some of the burden on the developer – they wouldn’t have to pay the fee until they have a buyer for the property. At the same time, the county’s schools have some of the funds needed to address capacity issues.
Several council members stated opposition to both Culver’s proposal and Holloway’s compromise. We can’t understand why.
When the impact fee was originally put in place, the argument was made that waiting until occupancy would allow too many properties to slip through the cracks. However, since that time we have seen the city of Salisbury implement several pieces of legislation which require certain documentation at property settlement. This could be done here as well.
When a new (previously unoccupied) home goes to closing it could easily be required that a certificate of occupancy AND proof that the impact fee was paid be part of the required documentation. In the case of self-built or custom-built homes, the fee could be added to the homeowner’s tax bill IF he or she failed to get a certificate of occupancy.
While we applaud Culver for his desire to help the county’s economy, we think that there are better means. For those council members who oppose Holloway’s compromise, I would suggest that you come up with some better reasons. Those that were discussed yesterday simply did not hold up under their own weight.
IF one extra house is constructed by moving the time of impact fee payment, it is a good idea.
19 comments:
Just one more reason not to build anything in Wico...rather than build on two of my waterfront lots, I've invested my money in other states. Sorry Wico, no additional tax revenues from me.
An impact fee should be used to alleviate the impact of the new construction. Just because you buy a new home doesn't mean your family is going to be using the local school. Many people who buy new homes are single. Conversely, many people who buy older homes have kids. There is no direct connection between the "fee" and the services being funded with it, so this is more properly called a tax, not an impact fee.
If the schools need more funding then it should be with a different mechanism than a tax (which is what this incarnation of an impact fee is) on new home construction. If you really want a true impact fee to fund school usage, then levy an impact fee on a family when a child reaches the age of 5.
If we need to fund Wicomico schools more, then raise taxes for everyone. Don't target a small subset of the population (new home buyers) to pay a tax for a service that has benefits for everyone. Or, if you don't think public school has benefits for everyone, then target the fees towards those people who use public schools. Either way, there's no justifiable reason why new home buyers should bear an oversized burden in funding public schools.
Anon 1020 -
That is your right. Do you have another solution? I have a sneaking suspicion that you would oppose repeal of the revenue cap.
Besides, I seriously doubt that $5,000 would really keep you from building houses on two waterfront lots.
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Marc -
I think we had this argument when the impact fee was originally put in. I understand what you are saying, however the state does not permit a county to impose a "head tax". Besides, even if it was legal it couldn't be enforced.
Since you evidently believe that all user fees are taxes (like O'Malley's campaign), then how do you propose to fund schools? Should we charge tuition? It's a grand libertarian scheme, but I am sure that you would agree that it's not politically practical.
Raise taxes for everyone? We can't because of the revenue cap.
The impact fee is justifiable. Don't look at the micro, look at the macro. Even if Single Person X buys a house, he or she will not be paying any less for that house even if there were no impact fee. The developer will charge whatever the market will bear; as he or she should.
If you a forced to pay a tax on something that you are utilizing wouldn't that be considered Taxation Without Representation?
My wife and I relocated to the shore two years ago. After doing research on building a new home it was quickly discovered that building a home in Delaware would be at a lot lesser cost. Building the same new home in Wicomico County would have cost us $7.687.47 in added fees and permits alone. Our taxes property and school taxes combined on our 2800 sq ft home on 2.6 ac are $2.167.32 Compaired to a coworkers that lives on a building lot on Nanticoke Rd with a 2100 sq ft home whose taxes are over $2800.00 I think we made the right choice.
Loving it in Delmar Del.
There is no reason for anyone to build in Wicomico County especially in the cities of Salisbury and Fruitland. As a
retire person I get very little
for my taxes.
if possible, don't build in maryland. deleware is the place to go.
anon 11:20
We also relocated to Delaware a little over a year ago saved a bundle in fees and taxes, we will be moving our retail store operation soon. The rest of the council should have the insight of Bob Culver and Joe Holloway.
Please consier repealing the Wicomico County new home impact fee "tax", and gently increase the real estate transfer tax on all sales of all real property (commercial and residential; vacant or improved; new or existing construction). The school tax burden would be more equally distributed and not specifically targeted to penalize new home buyers or the construction industry.
So Joe Single buys a house and pays no impact fee, then sell to Mark and Susie Married with 4 kids.
Yep, no impact on schools there.
Anon 1540 -
First, Joe didn't write this. Second, I never argued that single homeowners shouldn't have to pay the impact fee. I'll admit that it's not a perfect system, but it's one of the few that we are allowed.
I don't like paying taxes anymore than you do. My kids are all graduated from school and only one went to a public school (for three whole years). I don't really make use of county services. However, I'm not advocating that we shouldn't have taxes. I only ask that our tax money be spent wisely and efficiently.
Come up with a better solution.
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Anon 1519 -
We don't have a transfer tax. Got another suggestion?
G.A. he said Joe Single, not Joe. That goes hand in hand with Mark and Susie Married. Get it?
Worcester County currently has a transfer tax collected at settlement (some transfers are exempt). Worcester does not have the school impact fee/tax. Wicomico County might want to reconsider their policy of penalizing new home buyers and the construction idustry. The Wicomico County school impact fee/tax is a job killer.
4:52pm "The Wicomic County school impact fee/tax is a job killer." --come on, give me a break. If we are to have an honest discussion of this subject then please don't throw out statements like that. Right now, no one, anywhere is rolling in projects in the construction business. As a matter of fact there are layoffs in most construction oriented businesses of which I know first hand.
Look, I don't like paying "extras" anymore than you do. But I do like living in a county which values education. An impact fee for our county has been working to benefit the schools. It's not like the "fee" is being wasted on something else. Why mess with something that's working?
It is not jut the $5000 that keeps me from building, it is also the headaches of dealing with MD on environmental issues, permits, critical area BS (can't build within 100' of the water oh have you been to the Hyatt in Cambridge?) Not worth the headaches....buying property and developing in other states with much less headaches and better profit margins.....I still enjoy spending part of the year here...just not doing business or paying taxes in MD anymore.
Well, now we see where Bob Culver stands. Pro-developer. Because he is/was one. Growth is exactly what this county DOESN'T need because of the revenue cap. If there is growth, it should pay for itself.
If so many of you live in delaware, and think it is so great, why are you obsessed with, and comment of news that mostly involves maryland and wicomico county? Stay in, and worry about delaware.
Here's a compromise: How about changing the impact fee over to the wealthier commercial scene rather than continuing to overburden middle class America?
I've been in process of trying to build a home here since January & have promptly complied with every hurdle the county has set before me (and there's been a bunch), and now the $5200 fee on top of it is just salt on the wound. I currently rent in DE & commute to work in Salisbury. So, as a first time homeowner/builder I thought it would be great to eliminate my commute, which obviously would also result in my tax money staying here. Win/win situation for me & the county, right?! Ummm, ouch. Talk about baptism by fire.
Btw, Anonymous poster above who wrote "Stay in, and worry about Delaware" that's a great attitude and hugely helpful towards resolving this issue... Just another reason for me to seriously consider staying & building in Sussex Co.
Anon 7/28 1119 -
Sound OK on the surface, but what you are proposing is illegal. Commercial dwellings don't house kids. Therefore no impact. Therefore it is a tax.
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