The Virginian-Pilot
©
RICHMOND
A bill is being introduced today that would fundamentally change the way developers help cover the cost to local governments of providing roads, schools and police service to new homes.
The measure would eliminate cash payments that developers make to local governments toward municipal services and replace them with another fee set by the state.
It also would raise the grantors tax property owners pay when they sell commercial or residential real estate.
Sen. John Watkins, R-Chesterfield, is sponsoring the bill, which is supported by the Home Builders Association of Virginia.
Currently, developers' payments, called proffers, are negotiated directly with local governments.
Developers complain that proffers have lost their voluntary nature and have become a requirement to get construction projects approved.
Watkins' bill would replace the proffer with an impact fee and give state lawmakers, not local officials, the power to set and change the fee. It also would charge impact fees on property that was zoned without a proffer.
Cities and counties that are members of the Hampton Roads or the Northern Virginia transportation authorities would not be subject to the grantors tax hike.
The state road funding package that passed the General Assembly last year already included an increase for those taxes.
Watkins said switching to an impact-fee system, coupled with a grantors tax, would create a more reliable revenue stream for municipal services.
Watkins did not specify what the fee amount would be but said every city and county would be eligible to collect impact fees.
In the past fiscal year, 281 localities across Virginia were eligible to accept cash proffers. Chesapeake, Suffolk and Virginia Beach all collected some proffers in fiscal year 2007, according to the state Commission on Local Government.
The Virginia Association of Counties is concerned the bill would limit the flexibility local governments have to accept cash or other dedications of land or other types of contributions from developers.
"We want to be sure that local governments get as much, or more, revenue to pay for needed infrastructure caused by growth... than they get currently for cash proffers," said Ted McCormack, the group's director of governmental affairs.
This proposal is one where home builders and Realtors, two industries that often are on the same side of legislative proposals, disagree.
Martin Johnson, the Virginia Association of Realtors' director of government affairs, said his group worries that Watkins' bill furthers a trend of "continuing to shift the burden on buyers and sellers of residential and commercial real estate."
Historically, home builders have opposed impact fees.
Michael L. Toalson, executive vice president of the state home building group, replied to several e-mails from The Virginian-Pilot on Thursday, but did not respond to questions about the bill.
Julian Walker, (804) 697-564, julian.walker@pilotonline.com
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you need to realize you're getting screwed
When you see that the Home Builders are in favor of this, that should be all you need to know. What they are trying is to remove the ability for local governments make growth pay for itself. They want to build anywhere, and place expanded demands on public infrastructure -- roads, schools, you name it -- and not have to pay for it. And the grantors tax increase is just a way to increase the cost of their competition (existing homes) while lowering their own costs. Existing homes don't need new schools, new roads, etc. Why should they pay so that the creators of sprawl don't have to?