Growth imposes a huge strain on infrastructure and requires costly expansion in these services. But how do we get growth to pay for its fair share of this expansion? The primary tool available to assist in recovering the costs of growth is impact fees By definition impact fees are a charge on new development to pay for the construction of off-site capital improvements that are necessitated by and benefit the new development. Impact fees are similar to charging hookup fees for water and sewer. Current examples of impact fees in the Treasure Valley are for streets and highways, parks, police and fire projects which maintain the level of service currently provided. In many other states impact fees are charged for schools.
In Ada County which has a county-wide highway district over $20 million per year is raised through impact fees. In Canyon County none of the highway districts have an agreement with the county to impose impact fees. The lack of such fees means that the costs of road projects due to growth in highway districts is borne by current citizens through increased property taxes. An example of where impact fees could and should have been used is the widening of the overpass on Ustick Road near Caldwell. With rapid development in the area widening was necessary and needed. Other taxing districts had to step up and use property tax money or it would not have been improved. Canyon County recently reached agreements with fire districts to allow each district to impose impact fees. In addition to lowering property taxes, residences and businesses will likely benefit from lower fire insurance rates.
Nampa’s recently revised impact fee structure is expected to raise over $70 million over the next 10 years according to Anne Wescott of Galena Consulting. It will be a major supplement to streets parks, fire and police as the city continues to grow. Fees are already being used to partially fund overpasses and intersections on the interstate. Impact fees are also a major contributor to intersection improvements and widening major arterials in the city. Impact fees are also being used to maintain level of service in parks, police and fire protection.
Both Ada County and Canyon County have studies on how impact fees can be used on critical needs arising from burgeoning growth such as the sheriff’s department, the coroner’s department and other infrastructure needs such as an ambulance services district.
It is evident that impact fees can be an effective, fair and equitable tool to get growth to pay for itself. But impact fees are not fully or effectively used in many instances. Maximum property tax reduction will occur only when impact fees are fully used. What actions would yield the most benefit to Canyon and Ada County property taxpayers?
· At the top of the list would be school impact fees. It is almost criminal that subdivisions approved by both cities and counties have no requirements for developers to help fund the schools which are needed as a result of their development. The legislature needs to codify this.
· Highway districts in Canyon County should have impact fees. Increased traffic and rural subdivisions are putting increasing strains on current infrastructure, and intersections need more than a dangerous 4-way stop.
Progress has been made—notably through the Nampa and Caldwell revised fee structures and the recent approval of rural fire districts in Canyon County. It is high time to fill in the gaps.