I want to make sure I understand this all.
A land transfer tax is applied to all real estate transactions.
An impact fee is applied to new home construction.
If this is correct, it makes sense to me that an impact fee is a more correct way to add a fee for a new demand of services.
Impact fees have been used for a long time to fund things like roads and water lines which have a direct link between growth and the need for expansion. The use for schools is a more recent development and still somewhat controversial as the link is not as direct.
We all pay taxes to support schools so the cost is spread over a large base. An impact fee spreads the cost for new schools over a much smaller base. As in the general population, not all newcomers have children so some are paying extra to support services they won't use. Someone who lives in the county and has been paying taxes for years would be hit with an impact fee if they buy a new home in the county even though they haven't added to the need for services. Someone without children could sell their home, leave the county and the family who buys it may have 6 children but won't pay the impact fee because it's not a new home.
Retirement communities are another sticky area. Should homes in a retirement community for those over 65 that doesn't allow children be required to pay the fee? They obviously won't require more schools to be built but if we're all taxed for schools to spread the cost maybe they should still pay. There are plenty of examples of cases where the impact fees aren't as fair as they sound.
The study of future costs does not consider any additional revenue that new development could bring such as sales tax or jobs which would also offset the cost of new development.
Although in general residential development leads to more costs than they generate in taxes, this is not evenly distributed across all residential development. Three of the biggest expenses for the county are schools, law enforcement and social services. Which would add more to those expenses? A high priced, gated community or a trailer park? The impact fee model makes no distinction.
Impact fees and land transfer taxes are a crutch to avoid making tough choices and telling people they can't have all the fancy bells and whistles they would like in terms of county services.
