As part of the CEP’s mission to be the catalyst for a prosperous community, the organization partners closely with local governments (as well as state and Federal) to ensure that we are creating and maintaining a business climate which encourages growth and prosperity. A recent example of this can be found in the issue of transportation impact fees.
In December, the Marion County Board of County Commissioners held a public hearing on transportation impact fees. Among those who expressed their support in keeping these fees at their current rate was the Impact Fee Task Force coordinated by the Ocala/Marion County Chamber & Economic Partnership (CEP). The Task Force is composed of a broad range of professionals who are working on issues related to building and development every day. This group partnered with the County to study the impact fees when first proposed in 2015 and looked at the issue again last fall. At the conclusion of this hearing, the Commission made the unanimous decision to keep these fees at their current level.
Some have suggested that the County needs to raise these fees to the highest possible levels (though no one at the hearing spoke in favor of raising the fees). This approach will not only not generate the funds needed to move our community forward but will hamper growth and development. I would like to share some of the findings from the Task Force which illustrate why the recommended and adopted approach is best:
- Construction financing is still a challenge with a significant number of projects (both commercial and residential) struggling to appraise;
- The cost of building supplies and labor has risen significantly over the last four years;
- The County’s recently funded Home Matters report clearly outlines the challenges of constructing affordable housing and an increase in these fees would only further add to this challenge;
- Construction costs have risen significantly in the last year. For example, lumber costs alone have increased 50% from January to November of this year.
The issue is not about profit but about the ability to finance a project. When it costs more to build than the construction appraisal, then a project does not get built. How would adding tens of thousands of dollars in costs which do not add to the value of the project increase the ability of the project appraising? It doesn’t.
Some will want to argue the fallacy that through impact fees growth funds growth. History has demonstrated that this is just not the case. In less than two years, the sales tax funds dedicated to transportation will far exceed the impact fees which would have been collected over seven years. The sales tax ensures that 1) everyone including visitors and out-of-county commuters are helping to fund the infrastructure they use; 2) a significant, reliable source of income is available; and 3) that new construction and maintenance needs (on which impact fees are legally prohibited) can be addressed.
The CEP and our business partners greatly value our strong partnership with our local governments and look forward to continuing to work together to keep our community Moving Forward.