When a new subdivision is constructed, local governments have to build sewer and water lines, as well as roads. Then they have to serve those new areas with police and fire protection.
Rather than raise taxes on everyone to cover these costs, cities charge developers impact fees. These are generally tacked onto the cost of buying a house in the new subdivision, but they are an appropriate way to make the people responsible for the extra costs to bear the burden.
Of course, new subdivisions also mean extra burdens on school districts. You will not, however, see any city or school district in Utah imposing an impact fee for those costs. State lawmakers saw to that 11 years ago when they passed a law, written with the help of developers, that specifically prohibits such a thing. This came after Park City, at the time straining under rapid growth, had dared to charge about $3,400 for each new home built within its school district.
Now, West Jordan is raising the issue again, and with good reason. A fast-growing city on the west side of Salt Lake County, West Jordan may soon be faced with the prospect of forming its own school district. Some people along the east side, worried about declining enrollments and the possibility their schools will close, are threatening to break away from the larger Jordan School District. If they do, West Jordan would be left on its own to build the new schools necessary to keep up with its growth.
At the moment, the only option would be for the new school district to raise property taxes for everyone in the city long-time residents as well as new ones to cover these costs. At a City Council meeting last week, West Jordan passed a resolution calling on the Legislature to change the 1995 law and allow it to impose fees on new residents to cover the costs.
This is a question of fairness. Without new subdivisions, school districts would have no need to build new schools. The same thing can be said for the cost to build new roads, sewer and water lines. Why should local governments be allowed to charge impact fees to cover these basic costs, while school districts have to tax long-time residents to pay for new schools?
The political reason is that developers do not want to add to the cost of a new home. But the truth is, the cost of a new home is artificially low because the impact to schools is being subsidized by the rest of the city's residents. One way or another, the real costs have to be paid.
A decade ago, cities and school districts argued that the new law amounted to micromanaging on the part of state lawmakers. Just as the state hates it when Washington forces it to do something without providing the money, local governments resent having the state dictate how it should raise money to cover its costs.
It's time for state lawmakers to recognize the prohibition against school impact fees for the special-interest perk it is and rescind the law.