A legislative proposal is being considered that, if enacted, would devastate many cities and towns across Arizona. The proposal is a five-year moratorium on development impact fees (also known as growth impact fees).
The proposal would not only prohibit the imposition of new impact fees for five years, but it would also prohibit the collection of impact fees already in effect and counted on by cities and towns.
Impact fees are an effective financial tool that help cities and towns manage growth. Cities and towns that are faced with new growth collect these fees in order to build new infrastructure to accommodate the growth, in effect, calling upon new growth to “pay for itself.”
Residents were adequately served by existing infrastructure before growth occurred, and therefore they should not have to bear the burden of new residents and their accompanying infrastructure needs.
Impact fees are charged with each building permit issued within a municipality that has enacted impact fee ordinances to address the cost of new growth and the required infrastructure needs caused from this growth.
Impact fees were approved by the Arizona Legislature many years ago. States across the country also have enacted this financial tool for cities, towns and counties. Using this legal method, Queen Creek (with a growth rate of 268 percent from 2000 to 2005) has been able to provide new residents with road improvements, two new parks, 32 new traffic signals, sewer service, a new library, increased services from the sheriff’s office and fire apparatus.
Because of better roads and sewer service, commercial developers began locating in Queen Creek: Power Marketplace, Queen Creek Marketplace, Cornerstone at Queen Creek and Queen Creek Professional Village, to name a few. Such projects generate additional revenue for the town in the form of sales taxes and property taxes, which the town uses to pay for facilities and services all residents need.
The projected revenue from impact fees allowed Queen Creek to obtain $150 million in bonds and loans to finance the required new infrastructure caused from growth. Queen Creek has a municipal bond rating of “A” on its bonds due to Queen Creek’s ability to repay its debt (through the collection of impact fees). Queen Creek must repay this debt on a prescribed schedule. The debt service schedule was meticulously calculated based on the assured revenue stream of impact fees.
If Queen Creek cannot continue to collect the impact fees that were legally enacted, then the only source for paying the community’s debt service must come from the general fund.
This would devastate the town’s budget. Not only would all infrastructure building abruptly come to a halt, but basic services that residents count on would be deeply affected.
The General Fund would exist only to service debt and would not be available for basic services. Massive layoffs of staff would occur.
Every area of the town’s budget would be impacted, including public safety programs. Parks would more than likely have to be closed because the town could not maintain them. No new roads would be built or improved and there would be no personnel to maintain roads.
Regional programs to better air quality would be in jeopardy in the town because of limited resources. Many recreation programs would cease to exist. Communications that residents count on for information about their government (Web site, cable channel 11, broadcasting of Town Council meetings, About Town newsletter, Town Hall forums and public open houses, to name a few) would be impacted, with many eliminated, because of no money.
Devastating cities and towns is not the answer to the state’s financial crisis. Keeping cities and towns healthy, functioning and serving the public is vital to economic recovery. Queen Creek has always been financially conservative and focused on providing a high quality of life to its residents.
Queen Creek has already cut staff and expenses to address the economic downturn. Because of this downturn, more budget reductions are planned for the next fiscal year. We adopted the spirit of belt-tightening early in the economic downturn in 2006.
I am sorry that the state did not. We have been conservative with our resources to try to protect our residents, while the state was spending with abandon. We laid off employees, cut salaries, and went to a four-day work week long before that became common.
We have fought the financial battle associated with unprecedented growth in our town with precision and foresight. The cities and towns will find ways to solve our own problems but not if we have to carry the state as well.
We felt the winds and knew the storm was coming. Please do not punish us to help those who did not heed the warnings. This proposed legislation is a low blow to all cities and towns and will not serve the citizens of Queen Creek or Arizona well.
Please contact your legislators and let them know that cities and towns cannot endure the hardship this proposal would cause. You can find contact information for your legislators at www.azleg.state.az.us/MemberRoster.asp.
Art Sanders is mayor of Queen Creek.