by Phil Kent, SLF President

As appeared in Atlanta Journal-Constitution, December 5, 2002

Metro Atlanta, like its high-growth counterparts across the nation, struggles to balance reasonable taxes and fees against the need to for constant attention to infrastructure. Nowhere can this struggle be seen in clearer terms that with "impact fees,"collected by local governments to offset the impact of development in specific areas.

Since 1990, when the state enacted the Georgia Development Impact Fee Act, a mere handful of local jurisdictions have gotten it right, landing several local governments, such as Cherokee County and the City of Atlanta, in court.

The Development Impact Fee Act requires local governments to fairly allocate the costs of expanding public facilities, parks, roads, and critical services by assessing impact fees on new homes and buildings. Paid by developers, the impact fee is passed along to the consumer.

The idea behind impact fees is that needs arising from increased pressure on infrastructure through growth could be offset by the one-time fee. The fee is not a tax, which would be levied generally and could be used for communitywide benefit. Rather, the impact fee addresses specific needs, based on mathematical formulas, for roads, parks, emergency service facilities, and other services. The problem is many jurisdictions view impact fee revenue as a general funding source.

In Atlanta's case, the Greater Atlanta Home Builders Associaiton and the National Association of Industrial and Office Properties - represented by Southeastern Legal Foundation and former Georgia Attorney General Michael Bowers - sued the city because the $20 million in impact fees collected since 1993 are dropped into the general budget and spent in part on sidewalk projects miles from the actual development on which the fees were collected. As a result, fast-growing Buckhead and Midtown are attempting to solve their traffic problems through community improvement districts - an additional financial burden on residents.

Georgia law is clear. Local governments must be able to support their designation of service areas on the basis of sound planning and engineering principles, in which each new project would pay "that proportion of the cost of system improvements which is reasonably related to the service demands and needs of the project."

Impact fees are a novel concept, but should be developed with the discrete legal purpose in mind - that when you pay a fee, you expect a service.

Local governments considering impact fee ordinances should take note.

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