TBT Editorial: School Board Needs to Insist on Much-Needed Restoration of School Impact Fees

At Tuesday's meeting, the Manatee School Board voted to take no action on whether to recommend to the county commission to reinstate school impact fees, which have been suspended since 2009. Meanwhile, the district has told the public that it plans to ask citizens to approve a higher school property tax rate, an extension of the half-cent sales tax and more than a hundred million dollars in additional debt, much of which will go to build new schools and address other capital costs.

Politically-influential developer Pat Neal spoke out against recommending the fees at Tuesday's meeting and said he hoped the district could come up with other ways to meet its funding needs.

We can imagine no other ways that would not consist of continuing to force existing taxpayers to subsidize the cost of new growth in order to pad the bottom line of local developers.

This community was told that suspending the fees during the 2009 recession would be good for the local economy, though there is no evidence that suspending the fees contributes to local jobs or impacts the overall health of the housing sector. The 2009 housing market contraction was the result of many factors, though primarily several years of over-speculation driven by artificially-low interest rates and fraudulent or otherwise-flawed underwriting. After a belated market correction, there was too much inventory compounded by reluctant lenders and a reduced number of qualified borrowers. Impact fees were not a factor.

Nonetheless, then Superintendent Tim McGonegal and current board chair Bob Gause made the argument to suspend the fees for one year in order to help the builders and hence, the local economy. McGonegal warned, however, that suspending them any longer could leave the district without adequate funding for future construction needs should development and population growth recover. The Manatee County Commission, which has final say on school impact fees, ignored the recommendation and voted to suspend them for two years.

In 2011, the county extended the moratorium on school impact fees, despite having excluded them from an impact fee study it had commissioned. In 2012, the school district was in the midst of a monumental budget crisis caused by McGonegal having misrepresented the district's financial condition to the school board and public. No school board vote was taken on the matter that year, and the county again extended the moratorium without studying the need for the fees.

Every year since, the superintendents who succeeded McGonegal (Rick Mills and Dr. Diana Greene) have recommended the continued extension of the moratorium on impact fees under the defense (first expressed by the county) that they could not vote to reinstate the fees without a new study. However, state law only requires that the most recent data be used to calculate fees and does not prescribe an expiration date for impact fee study data. Moreover, why did the county not include school impact fees in its 2011 study when the school district had warned in 2009 of the possible negative impacts of extending the moratorium for more than one year?

Given how generous the county has been to developers, one might wonder if school impact fees were left out from the study to avoid the likely event that the need for impact fees would have been discovered. But why did the school district not push or look to partner with the county to study the need for the fees at that time? Why have they silently acquiesced in every year since, while again and again voting lockstep to continue the moratorium on school impact fees, even as growth continued to escalate at an alarming rate in a rural corner of the county that does not have a high school?

Impact fees are not a tax on houses, as developers like to suggest. They are a fee that is intended to help make sure that new growth pays for itself, the same as impact fees for roads, parks, libraries, law enforcement and other required services. Otherwise, existing taxpayers are forced to subsidize the cost of new growth through increased taxes and/or decreased services. We do not believe that a developer's profits should be subsidized by existing taxpayers, nor should they trump the legitimate needs of our children.

Every new house that is built brings with it a number of costs that outpace the property taxes collected on it. Florida, which has no state income tax through which to fund such costs, developed impact fees as a way to help communities plan for such expenses and assess their cost in a fair and equitable manner. They provide communities with financial stability by collecting needed revenues on a pay as you go basis, rather than having to deal with large tax swings every time a large fiscal need presents itself. The new study recommends a school impact fee of $6,415 per single family home, which is almost exactly the same as the previous study.

Developers argue that these fees are simply passed on to buyers and are therefore a "tax“, but we find this argument spurious. The market sets the prices for homes, and builders sell them for the highest price that the supply-demand relationship allows. They don't raise them when impact fees return any more than they lower them if they happened to get a good deal on the land. The ability to reduce their overhead simply increases their profit margin–at the expense of the rest of the community who has to pick up the tab on the services the fees would go toward.

The last six years have created a significant hole in the school district's ability to deal financially with the growth in our northeast corridor. Citizens who did not contribute to or benefit from that growth are already going to be asked to voluntarily increase their share of the costs through new taxes.

Local developers should also think twice about playing the short game. Securing a fee reduction, or an extended or even permanent moratorium, might lead to increased profits in the near term, but consider the damage if it also leads to a failure of the 2016 referendums, which the district has called its "fiscal cliff,“ warning that it may not even be able to provide basic educational services if those tax revenues are not secured. Manatee is already a mediocre district compared to neighbors like Sarasota. It is hard to imagine Manatee County being a very easy place to sell houses if its school district gets much worse.

The school board says that it wants to take the time to hear from the public and the industry and then move slowly on deciding what to do. We feel that having drug its feet for the last five years–saving developers and costing taxpayers over $55 million in the process–the district does not possess that luxury. The community has been speaking for a long time. It wants developers to pay their fair share. The industry has also made it clear what it wants–a continued free ride, at the expense of taxpayers and our children.

There is a study in place that prescribes the appropriate fees. We urge the school board to finally do the right thing and collect the monies it has lawfully been entitled to receive so that the students of this county are better positioned to receive the quality education they will need to be successful in an increasingly-competitive world.