Fees on growth need new look
The Portland City Council decision last week to expand fees on development to pay for new parks should spark a review of such fees charged in the city and region. The issue is not whether new development should pay its share of expanded infrastructure and important public facilities. It should — and has for many years. In Portland, for example, park fees have been assessed on new construction since 1998. Other communities around the region have similar fees for roads, parks, water, sewer, and fire and life safety. In the past 18 months, Metro adopted an excise tax on new construction to help pay for the planning required in urban growth expansion areas. However, there are two questions that government and business leaders need to agree upon: What is the fair share that new development should pay? And how much public infrastructure expansion and improvement can we afford? Weight falls heavily on business Both are difficult questions to answer in increasingly tough economic times. The answers may seemingly vary from community to community. While population growth is driving much of the need for expanded infrastructure, most suburban communities lag behind Portland, which already has significantly developed urban services in place. The issue also becomes more pressure-packed as many communities face huge shortfalls in funding infrastructure maintenance. Yet taxpayers, including businesses, can only afford to pay so much to maintain livability and keep up with growth. The Washington County Board of Commissioners seemingly admitted as much early this month when it put on hold a proposed increase in traffic impact fees. Many business leaders thought the fees were too steep, and some local mayors agreed. The expansion of Portland’s fees to pay for parks was equally severe. Previously, the fee was applied to new housing and sought to recover only 25 percent of growth’s effect on the need for new park facilities. The new fee structure expands that cost responsibility to 75 percent and now includes commercial development. What can we really afford? On a case-by-case basis, most development fees would be hard to oppose. We are strong proponents of public investments in infrastructure to maintain quality communities and a vibrant economy. But elected leaders need to remember that new development already pays an assortment of other fees. A proposed increase in any one fee — such as for parks — cannot be considered in a vacuum. The cumulative impact of the fees is significant. Before the expansion of Portland’s park fees, city of Portland development fees were approaching $3 per square foot on new construction. Like the owner of a home, businesses also pay general property taxes, road improvement property taxes and state gasoline taxes. While we are confident that local residents want business to pay its share of the impact of growth, taxpayers also must keep in mind that fees charged to a business largely will be passed on to the consumer. And fees that cannot be passed on or absorbed may cause a business to close or never locate here in the first place. Before any further increases in fees are proposed, elected officials need a more realistic determination of what improvements are needed and balance that list with the ability of the public, businesses and taxpayers to afford them.