For years the Pulp has kept you informed on how residential growth in Orange County is net negative to county finances, yet the county remains addicted to a policy of “growth for growth sakes”. Simple translation, your taxes had to rise every time a front door opened. Developers have been walking off with profits financed by you. Part of the problem is that impact fees have been unrealistically low, not reflecting the burden of a new residence on county infrastructure. Low impact fees have been good for developers, bad for taxpayers.
How Much Have Developers Been Underpaying?
Currently, city school impact fees are $4,407 for single-family and multi-wide manufactured homes, and $1,979 for multi-family and single-wide manufactured homes. County fees are $3,000 for single-family/multi-wide and $1,420, respectively. That means that city school district fees are 47% higher than county fees. Both fee rates have been unchanged for seven years, unlike your taxes.
In 2007 the Commishes authorized a study of impact fees and student generation rates between 2001 and 2007. Part of the study proposed new maximum impact fees supported by state law for each district, adjusted to account for the housing types found there.
The current maximum support impact fee of the city school district is $19,039. For the county district, that fee is $9,372. Developers have been underpaying impact fees by 77%, paying only 23% of what they could be charged by the county for a city district infrastructure impact fee. For the county, developers have been underpaying impact fees by 68%, paying only 32% of what they could be charged by the county. The difference has been paid by taxpayers, almost $15,000 per house.
Pulp readers should keep in mind that the city school district has built nearly twice as many schools as the county district in the last 20 years. The school cost for new students generated by new housing is a major portion of the impact fee.
Opposing School Boards Views
In September 2008, the city school board urged Commishes to increase impact fees ”in order to provide a source of funding to construct new schools to keep pace with the district's growing student population and the escalating cost of construction.”
However, at the same time the county school board doesn’t want to raise their impact fees.
County school board chair (and former Commish) Stephen Halkiotis said during a recent joint meeting with his Commish pals that impact fee revenues have stayed steady. In his words, it ”makes life a little easier when it comes to the revenue side of the picture.” See the Herald Sun Impact Fee Story.
Why Such Different Attitudes?
The county school district has spent the past few years complaining about how the rural county areas are subsidizing the urban areas for school construction. However, the reverse is true. Tax flows from the southern part of the county have built new schools in the rural north. If the city school impact fees increase, then the bias toward promoting county district growth over city district growth (a Commish goal) will be enhanced.
The city school district has been floundering under the burdens of a ciudad del sanctuario (sanctuary city) policy, i.e., don't ask, don't tell about someone's immigration status. As students from larger, economically disadvantaged immigrant families enter the city school system, the burdens are increased more than ever before. Although city school district residential growth has slowed to a crawl, student growth continues from rental families crowding former student housing units, in many cases with multiple families per housing unit.
Will the Barn Door Be Closed?
On 21 October 2008, the Commishes have scheduled a public hearing as to whether or not to adopt new student generation rates under the “Developer’s Right to Underfund Building Schools” ordinance (DRUBS), officially known as the Schools Adequate Public Facilities Ordinance (SAPFO). The Commish conundrum is simple, but hard. Do you keep impact fees low, promoting net negative growth and raising taxes? Or do you make impact fees equitable to existing taxpayers, slowing growth but making it tax revenue neutral? In simpler terms, will the maximum developer impact fee pig fly politically with Commish pals, local residential developers, and the local media aka real estate advertisers?
