On Tuesday night, the Manatee County School Board voted not to
recommend that the county commission implement the school impact fee
prescribed in a long-delayed study. Why? Because the
politically-connected developers seated in the front row didn’t want
them to. Instead, the board will look to taxpayers to make up the
difference. If citizens balk–as they should–our students will pay the
price.
The fees, which are paid by developers on new residential housing
units, help to support the need for new schools that is created through
new development. The county has not been collecting them since 2009,
despite the need for multiple new schools in the northeast corridor
where the bulk of development has been occurring.
For the last two years, both the county and school board have been
using the absence of a current study as an excuse to continue an
irresponsible moratorium that was originally supposed to be just two
years, got stretched to three and then went unaddressed for three more.
It has often been misstated that it would have been against state law to
re-implement the fees without a new study. However, statute only
requires that the best and most recent data be used.
Developers in other counties have challenged fees when accurate data
does not exist and can be successful if they are proven too high or
otherwise unnecessary. But had the county re-implemented the fees at
their previous level once the obvious need for new schools presented
itself, it could have collected them while a study was being performed,
confident that the obvious need would be validated. Indeed, the study
presented last month revealed a need for impact fees at nearly the exact
same level as when they were suspended in 2009.
More telling is the fact that neither the county nor the school
district have made efforts to explain why school impact fees were not
included in the 2011 impact fee study the county commissioned, despite
the fact that the moratorium was set to expire and the previous school
impact fee study had been done way back in 2004. That inaction leads a
cynic like me to believe that schools weren’t included precisely so that
the absence of a study could be used to defend an otherwise
indefensible moratorium.
A logical person could be forgiven were they to think that the new
study meant the jig was up; that finally, after having their new
development subsidized by taxpayers for six long years, developers would
begin to pay their fair share after pocketing around $60 million
through the moratorium over that time. With the study in hand, both the
county and the school district would have lost its long-abused excuse on
why developers were getting a free ride. But a logical person has no
place in Manatee County politics.
At Tuesday’s meeting, the board voted to recommend that the county commission implement only 50 percent of the school impact fees recommended in the study. The resolution
stipulates that if voters support a 15-year extension of the half cent
sales tax next November, the fees will remain at 50 percent. If not,
they would go up to 75 percent of the recommended fees in the second
year, and the county would finally begin collecting the full fee their
consultants say is needed now in the third year–nearly a decade after
they were suspended.
The district has lost about $60 million during the moratorium–or about
the cost of a middle school it says it needs to service new growth. On
Tuesday night, a thinly-veiled bargain began to emerge. The school
district would continue to pad the bottom line of developers and the
developers would help them sell the sales tax–a much bigger part of the
funding pie at about $5-1 on impact fees.
The problem that no one seemed to envision was that taxpayers will
likely see the board’s action as a big reason not to vote for the new
taxes–yes, plural–as the district also says it plans to ask taxpayers to
voluntarily raise their school property tax millage rate and approve
more than a hundred million dollars in new bond debt for É you guessed
it, new school construction. As these taxes will likely be seen as
further subsidies for developers, voting against them will give
taxpayers their only chance to vent that frustration.
The school board’s plan seems like bad strategy, based on poor logic,
fueled by an abundance of political cowardice. Oh, and throw in a
healthy dose of ignorance as the endless board discussion on impact fees
at Tuesday’s meeting painfully demonstrated how little the board
members and administrators understand the fees É or economics in
general.
Impact fees are not a tax on houses. They are fees paid by
developers to account for the cost of growth in a state that does not
have a state income tax (meaning less capital funding from Tallahassee),
so that communities can adequately plan for needed services while still
enjoying somewhat stable tax rates. There is absolutely no evidence
that impact fees reduce the number of houses sold, let alone that they
cost jobs, stifle capital investments or that their absence makes homes
more affordable or otherwise benefit the community. They increase
profits for builders, while putting the cost of new growth on the backs
of existing taxpayers.
This has been studied many times, most notably by the esteemed Brookings Institute,
which found that Florida’s counties receive a considerable net positive
from impact fees, and that they "do not slow job growth" and "are not a
drag on local economies." Real estate is a complex market that is
impacted by a broad spectrum of factors. That being said, it is still
driven by supply and demand. Houses sell for what the market can
command.
Developers like to say that they "pass on" impact fees to buyers
and that they therefore lose sales as a result of people not wanting to
pay them, having to lay off employees as a result. According to their
song and dance, charging the fee kills jobs and stunts the local
economy.
But developers don’t set prices based
purely on costs. If they did, houses built on land they paid less for
would have lower sale prices relative to nearby developments where they
paid more. As we all know, they don’t, just like they don’t sell a house
for less than the going rate when a fee is removed. Like all commercial
businesses, they charge the price that the market commands and profit
most when their overhead is lowest.
Clearly developers would like not to pay impact fees the same way phosphate mining companies like not to
pay market rate for the billions of gallons of precious water they suck
out of the aquifer, or multi-billion dollar health care companies like
local taxpayers to cover the cost of indigent care that they take on
when accepting Medicare/Medicaid payments from the federal government.
It doesn't make them evil. It makes them typical, and that's where the
citizens' representatives are supposed to come in with good government
policy. On Tuesday, the school board demurred in that responsibility.
Governor Scott’s new appointee to our board, John Colon, disagreed
with the data. Colon said that many people don’t think impact fees
affect buying decisions, but argued that when he was shopping for a home
in Manatee County and one of the properties had high CDD fees, he went
someplace else.
Let me reiterate that while CDD fees are paid by homeowners, impact fees are not.
A home buyer never sees them. The price they pay is the price that the
market commands. Impact fees are also a one-time assessment on the developer, while CDD fees are paid over and over again by the homeowner.
Whether or not Colon understood this or was just offering some
pretzel logic to reverse engineer a pre-ordained conclusion, I can only
guess. Colon was only recently appointed to the board following the
passing of Mary Cantrell. While he was officially appointed by our dear
Governor, the actual vetting process for the slew of applicants vying
for the appointment consisted of interviews with Pat Neal and Carlos
Beruff, the developers seated side by side in the front row
at Tuesday’s meeting. Board members fawned endlessly over the two deep-pocketed housing moguls, showering them with compliments, while chastising the public at large for vilifying them as "evil developers“ when they are such fine members of our community.
It was therefore no surprise when Colon actually tried to amend the resolution to mention no more than the 50 percent reduction, saying the board should come back later if they thought step-ups to 75 or 100 percent were necessary. Colon even warned that the fees could be so disastrous that we wouldn’t have to worry about education because there would be no jobs in Manatee County and with a wrecked economy, no one would want to live here anyway. Colon did what he was appointed to do, while the two men who appointed him watched on.
Since joining the school board in 2006, board chair Bob Gause has gone
from a middle-class landscaper to a well-connected "consultant“ in the
development trade, seeing his personal wealth increase through business
ties with companies he’s helped get lucrative contracts for. Clearly, it
wouldn’t be a good move for him personally to go against the Manatee
County development community, and nothing in Gause’s record as a board
member suggests that he’d put what was best for the students of our
county ahead of his own personal agenda. Another vote in the bag.
Dave Miner gave a number of his typically long-winded soliloquies in
which he pondered what "doing the right thing for our students“ meant.
There were a few moments when it even seemed like the self-proclaimed
watchdog would go against the political wind and stand up for the
students against the developers. But in the end, Miner, who will be
facing a very difficult re-election campaign in 2016, had nothing more
than empty platitudes for the kids and went along with the crowd.
Miner tried to make a passionate case that supporting our superintendent and
voting to recommend the discounted plan was somehow courageous even if
it brings "political heat," but there were in fact no opportunities for
political courage on Tuesday night. Political courage was needed three
years ago and every point between when superintendents and school boards
sat on their hands and rubber-stamped the absurd moratorium time and
again. On Tuesday, there was simply the opportunity to exercise common
sense and finally allow a moratorium that has lasted three times its
original length to do what it was supposedly designed to do–expire!
First-term board member Charlie Kennedy asked the most questions, and
as is often the case, came to the meeting having done the most homework.
Kennedy, who has struggled to be the compromise member of the board,
again tried to find a middle ground. He couldn’t, because when an
organization is trying to do anything other than the one and only
obvious and equitable solution–and a half a decade too late at that–no
middle ground exists. Everything other than the obvious becomes the
absurd. As usual, Kennedy spoke much only to go along with the crowd in
the end.
That left only Karen Carpenter, who has long been the sane voice on a
board that’s too often found sanity in short supply. In many instances,
Carpenter has cast an important protest vote in lone dissent of a board
majority that too often sided with special interests and a clique of
well-connected administrators to defend the indefensible. Not this time.
Ms. Carpenter seemed uncomfortable with making any decision at all and
pushed at both the last meeting and this one to delay the action, but
never managed to give any indication that she would go against the
wishes of Mr. Neal and Mr. Beruff.
Like her fellow board members, Ms. Carpenter lavished compliments on
the two men up front and praised them for caring about the community and
its education system. I wonder whether Ms. Carpenter has been following
the race to the bottom that SCF’s board of governors–which include Beruff as well as Mr.
Neal’s wife–have set that local institution on in recent months?
Carpenter went on to peddle the oft-repeated narrative that by helping to ensure that the board protected the developer's interests, they could count on enlisting their political savvy to make sure the community passes the tax referendums next November.
That was the backroom deal that had apparently been cut. The developers
would come up and laughably argue against paying any impact fees at
all, giving the old Chicken Little story about the economic Armageddon
that would ensue were they to pay their share, Superintendent Diana
Greene would offer a "compromise" solution of instead using a graduated
re-introduction of fees, and after endless hemming and hawing and
feigned soul searching, Dr. Greene and the board would try and sell the
half-measure as a good deal.
In exchange, it seemed developers were expected to run one of their
notorious PAC campaigns, this time promoting the tax referendums,
because if they passed, they would be assured that their impact fees
would remain at half the prescribed rate. I guess that’s the political savvy Ms. Carpenter was referring to, as Neal and Beruff managed to pull off the oldest negotiation trick in the book: asking for twice what you
expect and then acting like getting only 100 percent of it is meeting in
the middle.
Dr. Greene and the school board had now better hope that the snake oil
they bought cures the district’s many ailments. If the plan to help
developers backfires and voters turn away the referendums next November,
the district will find itself up creek without the proverbial paddle.
They’ll be counting on telling taxpayers that if they don’t pick up the
tab for the district’s financial mismanagement, even the C-rated,
bottom-half-of-the-state education they provide now will no longer be
within reach.
Will cash-strapped taxpayers blink first, or tell the district that it should have thought of that before it
will have turned away around $70 million from developers? I’d point to
the county’s efforts to benefit deep-pocketed, politically-connected
health care providers by paying to replenish a mismanaged corpus with
tax money in order to support a bloated and inefficient indigent care
program. Sure, the hospitals and its doctors who profited from the
status quo spent hundreds of thousand of dollars in PAC money to
misrepresent the referendum and confuse voters into thinking they were
voting to lower their own property taxes, but all of those glossy direct
mail pieces and radio ads didn’t stop voters from turning it away
nearly 2-1 at the polls.
I don’t imagine taxpayers will be any more sympathetic to publicly
subsidizing highly-profitable commercial interests this time around,
especially considering that the school district was already facing an
uphill battle to pass those measures before it became yet another rubber stamp for big development in Manatee County government.
On Tuesday night, the superintendent and our school board had a
very simple and clear decision to make. Attempt to begin to atone for
their past inaction and make the obvious, data-driven, fact-supported
decision to re-implement school impact fees as prescribed by the study,
hoping it would be enough to build some modicum of trust with skeptical
voters–or take the dirty needle and get in bed with developers and the
promise of the dark money PACs and shady politics that they hope will
keep the ship afloat.
To make the right decision, they needed only do what each of them so often profess to be their mantra: put the kids first. In the end, no one spoke for the children, and I hope parents, teachers, students and taxpayers remember that.
Dennis
Maley is a featured columnist for The Bradenton Times. His column
appears each Thursday and Sunday. Dennis' debut novel, A Long Road Home,
was released in July, 2015. Click here to order your copy.
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