Economy threatens Anne Arundel's fee hike on new construction

Local,Jason Flanagan
Any increase in the fees to build in Anne Arundel could be pushed back until 2010, as the stumbling economy has many worried about fee increases further stunting building growth and job losses.

“This reflects the struggling economy that faces us as well as the need for infrastructure improvements,” said County Executive John R. Leopold.

However, the county is facing a potential multimillion-dollar budget shortfall next year and needs the revenue created from impact fee increases to counter declining tax revenues and state funding. An impact fee is money paid by developers to help cover road, school and public safety expansion. 

“I don’t harbor any delusions. It’s going be ugly two years [budgetwise] for this county,” said Councilman Jamie Benoit, D-Crownsville
Dubbing his proposal the “Economic Stimulus Schedule for Impact Fees,” Leopold wants to implement impact fee increases starting in 2010 instead of 2009 as currently proposed, and is asking for a lower increase than currently proposed.

The fee proposal staggers the cost of building based on the structure’s size — the bigger the building, the more developers pay.

For example, the builder of a 3,000-square-foot house pays about $5,000 in impact fees. If approved, the legislation will initially lower the fee to $2,344 before raising it to $4,699 on Jan. 1, 2010, and then to $11,721 by July 1, 2010.

Developers, such as Dwight Taylor of Corporate Office Properties Trust, have opposed significant fee increases and suggested Anne Arundel raise its property taxes despite a cap on tax revenue. The property tax in the county is set at 0.88 cents per $100 assessed value.

Leopold introduced the first impact fee proposal in January, and at first would not budge on his proposed numbers, but lackluster support from the council compelled him to withdraw the bill.

Now on his second version, this time co-sponsored by three council members, Leopold’s hope for fee increases is threatened again as strife over the data, and worries that fee increases are unwise in this economy, has the council split.

“My hope is that the council will recognize the need for infrastructure improvements,” said Leopold, who has argued the need to increase fees he believes have been “artificially low” for years.

Benoit hasn’t taken a side, but said he is skeptical about the bill now that another last-minute change has been thrown upon the council.

“It takes a while to really drill down into legislation like this. We’re still finding issues the data used to support the figures,” Benoit said.
View article comments Leave a comment