School boards wrong again

Now that property values and home building are rising again, the Sarasota and Manatee school boards see an easy target for money: jack up the price of new homes.

By Matt Walsh
| 1:08 p.m. November 12, 2015

Sarasota
Opinion

They are so predictable. All of them — especially the Manatee and Sarasota school board members. The Manatee and Sarasota county commissioners as well.

They are elected as representatives of taxpayers and taxpayers’ interests. In time, they often become advocates for government — they want more of it … more taxing, more spending, more rules, more intervention.

How to fund school building with private funding

The following is excerpted from “Building Schools with Private Dollars,” published by the Reason Foundation:

In the United Kingdom and Nova Scotia, a private developer will often finance 100% of the construction of a new school in exchange for long-term lease payments from the school system. This lease may run for 20 or 30 years and cover only normal business hours.

After hours, the developer is free to lease the building to compatible educational orga-nizations, such as trade schools, refresher programs, colleges and universities.

Much of the developer’s increased revenues under this ar-rangement are effectively passed on to schools in the form of lower rent. When builders know they can make more money by leasing their facility at night, they adjust their bids accordingly when they vie for the right to build the school.

In many cases, school systems also have the option to buy the building at a predetermined price. Contracts may even call for the owner of the building to refurbish the kitchen or other aspects of the building.

The cycle is starting all over again. We saw this week and a few weeks ago when the two school boards vote to re-impose school impact fees.

We all remember, of course, the moaning and dooms-daying that occurred during the recession, when tax collections shrank right along with the economy and all governments were forced to reduce expenses.

That was followed by the predictable next phase, during which all of these elected public servants realized a declining economy is not a path to success. So they took on the cause of spurring economic growth. They cut back or put a moratorium on impact fees they imposed during the good times, with the intention of helping create an economic and business climate that jump starts housing starts, attracts expanding businesses and provides fuel to help re-ignite the local economy.

It’s all in the play book.

Now comes the next phase. The economy is gaining momentum. Florida’s growth engine — population growth — has restarted. And new homes and condominiums are being permitted and built at a brisk pace.

Now most rational people would interpret that phenomenon — of increasing population — as a positive. More people means more economic activity — increasing demand for housing, groceries, medical services, automobiles, furniture. More jobs to meet the demand. More new businesses to meet the demand. More choices for consumers that lead to more competition and pressure on businesses to keep their prices in check.

All to the good.

But back in the school board and county administration headquarters, the elected advocates for government don’t see this increasing activity merely as a positive creating additional sales-tax and property-tax revenues funneling more money into their coffers. They see population growth and new construction from two other perspectives:

As a threat that must be controlled — for some, stopped — because they see increasing population as a negative, not a positive. They view rising population as an increasing strain on what they bemoan as already underfunded public services and infrastructure. In Sarasota County, we’ve heard $240 million as the unfunded infrastructure backlog. In Lee County, they say it’s $500 million.
They also see this renewed growth as a source of money to be tapped.

So where do they turn? Pull out the play book. Go back to the impact fees. Lately, that means going after the easiest target — school impact fees. Shooting ducks in a pond.

School impact fees provide great cover for school board members and county commissioners. They can vote to impose the impact fees on home builders, arguing the money is needed to pay for the construction of more schools, while at the same time winning hosannas from the vocal constituents who oppose growth.

Coming clash over form-based zoning

You can see it coming.

Many residents of the city of Sarasota are becoming apprehensive, suspicious, skeptical and fearful. They keep hearing about this new form-based code that is coming in 2016.

For two years, Karin Murphy and a colleague in the city’s Urban Design Studio have been crafting new design concepts and codes neighborhood by neighborhood, using the principles of form-based code. They have made multiple presentations to residents and neighborhood associations.

The designs look great. But when you start changing what people can and cannot do with their property, anxiety levels rise.

If city administration officials and commissioners are wise, they would be working now on how they plan to persuade taxpayers and property owners to buy in. It won’t be easy.

In fact, the city’s efforts remind us of the commentary in Monday’s Wall Street Journal. William Easterly, an NYU economist wrote: “Does successful city development require expert planning? Or do some of the best neighborhoods arise spontaneously?

... Here’s the lesson: Development comes spontaneously, and often by luck. It takes restraint for planners — and we economists who advise them — to simply stand back and let things unfold naturally over years and decades.”

Advice that would be wise to heed.

What’s more, school impact fees aren’t immediately or directly felt by the counties’ existing taxpayers, so they won’t scream. Impact fees are primarily a tax on a future home buyer, who has no voice in this tax.

So hit the developers and home builders. They’re easy targets. They are always portrayed as Florida’s Darth Vaders, the environmental pillagers and greedy profiteers. (How sad that so many of the 19 million people living here don’t see developers and home builders for the good they provide; for taking the risk and borrowing money, for often times pledging their personal worth as collateral to build the roofs over the heads of Floridians.)

Here’s what these elected government advocates and anti-growth advocates fail to accept: Developers and home builders don’t pay the impact fees. In fact, not one business in America actually pays taxes. Every business, every developer, every home builder passes on those costs to their customers.

Nor do the proponents of impact fees accept this: Higher impact fees are no different than increasing the price of gasoline or the price of a pack of bacon. When the price rises, the demand goes down.

When housing prices go up because of impact fees, fewer people buy homes. They go elsewhere. And: No wonder housing is unaffordable.

School impact fees aren’t the formula to pay for new schools. Commissioners and school board members will say that’s correct; they’ll call them a tool in the toolbox.

But when you really look at them, school impact fees are not just an inhibitor to economic growth and a contributor to unaffordable housing. They are unjust and the wrong approach to fund new schools. Explain how a new resident to Manatee County from out of state, one who has no children, creates an impact on schools for which he should be taxed. Explain how it is fair to impose a school impact fee on an existing Sarasota County resident with no children who moves from an existing home in the city to a new home in the county? Explain how it is fair to impose an impact fee on a new home but not on one that is torn down and rebuilt.

Developers and their customers should pay for the roads and public services their projects require. But imposing a school impact fee on every new home or new commercial building won’t solve school district funding issues. There are other methods for that — e.g. sales taxes, property taxes and an expanding business and population base.

Taxpayers and residents in Manatee and Sarasota counties are tired of hearing about a lack of affordable housing. School impact fees certainly don’t help eliminate that need. If the Manatee and Sarasota school boards and county commissioners had the courage, they would reject school impact fees and throw them out of their play books.