The controversy in Berkeley County over who should be taxed to pay for road improvements - developers or consumers - is the latest skirmish in a long-running debate about who should bear the costs of the region's population growth.
Across the tri-county area many governments impose impact fees - one-time charges for new homes and businesses meant to pay for some of the services they will require - while others have none. Meanwhile, residents of all three counties are paying extra sales tax, and in some cases higher property taxes, to pay for wider roads, more schools and other growth-related public services.
"We just believe the thought that new houses contribute to all of these issues, and they should have to pay more, is just not correct," said Philip Ford, executive vice president at Charleston Home Builders Association, which has challenged impact fees in court.
Overcrowded schools and roads across the fast-growing region illustrate the need for funding, and some local governments see impact fees as part of the answer.
Mount Pleasant and Mount Pleasant Waterworks collect impact fees amounting to $8,360 on each new single-family home, with larger, variable fees for businesses. Most - $6,500 - goes to the water and sewer utility.
"We have probably the highest impact fees in the region," said MPW's General Manager Clay Duffie. "It's the 'growth pays for growth' concept."
However, paying for growth requires all Charleston County residents to pay extra sales tax for transportation projects and school construction, and this year Mount Pleasant also raised its property tax. Berkeley and Dorchester counties also have extra sales taxes to fund road projects, in addition to transportation impact fees.
If impact fees dissuade growth, that's not apparent in Mount Pleasant, which has become the nation's ninth-fastest-growing large city.
Nearly 30 miles away, in unincorporated Berkeley County near Summerville, impact fees are well below those in Mount Pleasant, and far more controversial.
Berkeley County's transportation impact fee has been in place since 2006, but county officials want to get rid of that fee because they believe it is keeping new businesses from opening.
"The economics may work in Mount Pleasant, but not in a rural county," said Councilman Tim Callanan, chairman of the county's finance committee. "The fee (in Berkeley County) is so anti-business, and particularly anti-small business, that it has practically put commercial growth to a halt."
Callanan said impact fees make sense for residential construction, because new homes put cars on the roads and children in the schools, but state law doesn't allow counties to only charge fees for some kinds of development.
He said Berkeley County's transportation impact fee might prompt a job-creating business to locate on Palmetto Commerce Parkway, where neither Charleston County nor the city of North Charleston impose impact fees, rather than in Berkeley County.
It all adds up
Robert Pratt develops commercial real estate, and said a building he planned to construct and lease to a gymnastics center in Berkeley County had to be cancelled due partially to the transportation impact fee. He said a planned shopping strip near Knightsville suffered a similar fate.
"The impact fee was just another nail in the coffin," Pratt said. "It wasn't just the impact fee, but at the end of the day it all adds up, and these tenants can only afford so much."
Pratt said the gymnastics center will end up in a renovated building in Summerville. The town also has an impact fee, but it does not apply to existing buildings.
Last year, Summerville collected $788,353 from impact fees on homes and businesses.
"We just built Substation 5 for our fire department (with impact fees)," said Belinda Harper, the town's finance director.
The Summerville Commissioners of Public Works also has a fee associated with new development, called a facility cost recovery fee, but at $1,635 it's thousands less than other water and sewer utilities charge.
"Summerville has a very well-defined, compact service area that we have been serving for some time," said CPW Manager Charles Cuzzell. "Our fee is actually based on improvements that have already been built."
In contrast, true "impact" fees are tied to specific future needs. Utilities in growing areas charge thousands in impact fees because they need to run new water and sewer lines, supported by water supplies and sewage treatment plants.
Ford said that, unlike impact fees for schools and roads, builders see little problem with water and sewer impact fees, even though they tend to be the highest fees.
"As long as they are calculated correctly, there's usually not much heartburn, because it's a cost of doing business," he said. "You definitely need water and sewer to build houses."
"When you start getting into transportation, it gets a bit muddier," said Ford.
Summerville's impact fee for one house is $1,135. In Berkely and Dorchester counties, the fee is just under $1,400. For businesses, however, impact fees are based upon a series of calculations involving the size and nature of a business and the traffic it could generate.
For example, the fee for a hospital or nursing home would be determined by the number of beds, but a nursing home would have a much lower impact fee because people come and go less frequently than at a hospital. A furniture store would have a lower impact fee, per square foot, than a grocery store.
"Our models can determine the exact impact of a development when it comes in," Mount Pleasant Administrator Eric DeMoura said.
Ford said the connection between new homes and crowded roads is tenuous.
"Houses don't own cars," he said. "People do."
Along with Berkeley County Council members including Callanan, and the Charleston Metro Chamber of Commerce, the home builders' group supports using additional sales taxes to fund roads.
"We all benefit from growth," said Ford. "We all ought to have to contribute somewhat."
Reach David Slade at 937-5552
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