Tuesday, March 26th, 2013 at 9:13am

Impact Fees Can’t Be Used to Balance Budgets

Posted by admin

In the Sunday edition of The Daily Commercial, a reporter quoted Commissioner Jimmy Conner in saying Lake County may consider using impact fee revenue to solve the County’s money woes.  The story suggested that the Commission was going to consider implementing impact fees to help offset continued drops in tax revenues to balance the budget.  We followed up with Conner on this story and determined that the reporter was very loose with his words to imply Commissioner Conner’s stance on impact fees.  First and foremost, Commissioner Conner was not quoted accurately.  In fact, he has a very strong anti-impact fee stance because he understands the negative effect impact fees have on an economy struggling to add jobs.

Secondly, it is illegal to use impact fees to balance the County budget.  Impact fees are an ill-conceived form of taxation that purports to make new construction pay for the extra burden they impose on infrastructure, such as roads, schools, and public safety.  For example, school impact fees are to be used on new classrooms, road impact fees are to be used on new roads or enhancements on existing roads to accept more traffic, and public safety impact fees are to be used for new police and fire stations.  Impact fees cannot be used for the general fund or operations budget.

In our view, impact fees were created for two reasons:  First, to allow a greedy government bureaucracy to seize more money from its people and second, as the primary weapon of the no-growth movement to stop development.  It has been documented by noted economists that growth pays for itself and The Great Recession has borne this out.  The reason why Lake County is in such a dark financial mess now is because it is not growing.

An impact fee is calculated by forecasting population growth and forecasting what that growth will cost per each new structure constructed.  People must understand, the fallacy behind the impact fee mindset is the lack of understanding that improved properties with new structures will generate a lifetime of new property tax revenues for the government body and thusly, growth pays for itself.  Impact fees are nothing more than the product of an over zealous governmental body unfairly taxing the very people they should be supporting to build new homes and businesses.

There are also two major impact fee problems facing Lake County.

  • As we recently exposed, with a 99-year supply of student stations (link story), the Lake County School District has no need to even consider an impact fee until the year 2121.
  • Road impact fees primarily affect the business community because the biggest impact on transportation is new businesses.  Lake County cannot impose an impact fee of tens of thousand of dollars on a new business when the vast majority of communities throughout the South impose no impact fees.  The market will simply not allow it – imposing huge road impact fees will kill any hope of job creation.

So, Commissioner Conner is absolutely correct in stating that the County has serious money woes and clearly, impact fees are not going to resolve the problem.  Furthermore, no one is expecting property values to rebound any time soon to help the budget and the days of receiving help from Washington, D.C. are over because the federal government is broke.

In our view, that leaves just four options on the table:

  1. Continue to cut expenses to match revenues and streamline services.
  2. Increase property taxes on citizens who are being decimated by the Obama tax policies.
  3. Impose the local option 5 cent gas tax and start minimal road improvements.
  4. Do nothing and eventually go bankrupt.

The only one of those options that is viable is to cut expenses to match incoming revenues.  The citizens of Lake County are tapped out and most know that services will have to be cut.  Increasing property taxes will probably force more people into foreclosure and that is the very last thing Lake County needs.

Some people believe there are no easy answers to the County’s budget woes, but there really is – live within your means.  When you have no money you have no other options.

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One Response to “Impact Fees Can’t Be Used to Balance Budgets”

  1. Even though he was one of the masterminds of the overzealous school building sprees and never met a contractor or architect and their families he wouldn’t take a buck from. Jimmy is a local boy easy to like because he spends so much time and his expertise at making people like him. Jimmy Conner is such a full time politician he’s still running his campaign account giving away some of that free money and filing his financials with the supervisor of elections.

    I would sure not be willing to make a bet that ole Jimmy didn’t make that statement attributed to him by Greg Jones of the comical. No one who knows Jimmy would do that because he speaks to his audience. He is a career politician used to telling everyone what he thinks they want to hear. And by doing that it is easy for him to suffer a slip of the tongue.

    To wit:

    “With property taxes stagnant and no new sources of money, the commission could use impact fee revenue, but is holding off hoping this will help businesses add new jobs, Conner said.”

    That sound just like Jimmy!

    When you say “it is illegal to use impact fees to balance the County budget” you should stop and ask yourself; just when did following the letter of the law take effect in Lake County Florida?
    These people make their own laws. And regardless of any laws when the CFO Barbara Lehman Minkoff gets her fingers on money it don’t make a darn where it comes from, it will go where she is instructed for it to go.

    Just for fun you should go down there and make a public records request for all income and outgo for the entire fiscal year 2011-2012 or just the vendor payments for the last six months or anything for that matter. Your grand kids will be drawing social security before you get one thing from her that you can make heads or tails of.

    Jimmy Conner told the truth when he said In the last five years, the county has lost $35 million in property tax revenue as valuations have dropped. He said the county’s general fund budget has been cut by $32 million during the same span.

    He failed to mention all those tax certificates that didn’t sell at auction and the county is holding without collecting a dime, some for several years stacked.

    Even though the commission has told department heads and asked county officers to cut their budgets by another 6 percent next fiscal year, that won’t help that much.

    Asking the sheriff to cut his budget by 6% is like spitting in the wind. He has never legitimately cut one dime from his budget. His experts at doubletalk always take a few million from one pocket and move it to another to satisfy those who can only see things on the surface. The real sheriff’s budget is around $62 million when you count up all his income from other sources such as the cities and the school board and his ability to obtain all those federal grants!

    These are truly hard times. In hard times desperate people do desperate things. We see this daily with families coming apart at the seams. Parents killing their young. The young killing other young like the kids who shot the baby in the face in Georgia.

    This is what happens when we sit back and allow people to take God out of our daily lives and allow people to replace Godly things with feel good notions that are cool and hip for the times.
    As Jimmy Conner says “”The only way out of this mess that I know of — and I don’t know if there is one in the next three years, frankly, to be honest with you — is job creation in the private sector.

    He also says “There are areas of Orange County you don’t want to drive down and we don’t have that in Lake County.” He should have added YET!

    However, we can not create jobs in an atmosphere such as the one we have allowed to be created locally here in Lake County where ever subject line espouses gay friendly everything.
    Lake County has become and will continue even more to become what the majority of the people allow it to become. If the majority of the people demand law and order. Address immoral issues and demand honesty and integrity from our government employee’s (both hired and elected) this county will not continue to slid the slippery slope to areas “you don’t want to drive down.”

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