Public Watchdog.org

“Impact Fees” Just More Snake Oil For The Masses

07.18.17

We rarely agree with anything Park Ridge-Niles School District 64 Board member Tom Sotos says or does when it comes to the D-64 schools. But when “Tilted Kilt” Tommy gets something right – or even half-right – it deserves some recognition.

As reported in a current Park Ridge Herald-Advocate article (“Study to address proposed Park Ridge development’s impact on District 64,” 07.11.17), during a recent D-64 Board discussion of the City of Park Ridge’s possible assessment of “impact fees” on proposed new residential development on the current Mr. K’s site on Higgins just east of Dee, Sotos correctly observed that such fees aren’t “going to solve our problems” of more residences being constructed and burdening the schools with students who cost far more to educate than whatever taxes are paid on their parents’ residences.

Where Sotos missed the boat, however, was with his observation that “[i]f we assess an impact fee on the 31 units considered for the Mr. K site, that impact fee won’t be enough to help us potentially work around our particular problem if all 31 units end up having children in them.”

He’s right, but in the same way that getting the right answer on a math problem is undermined when you have to show your work and, in so doing, you demonstrate that you really don’t understand the applicable math concept.

That’s because the taxes on that 31-unit development can’t even cover the cost of 16 students attending D-64 schools, much less the cost of 31 school kids.

Let’s assume, just for Schlitz and Googles, that each of those 31 residences will have total RE tax bills of $20,000 per year – an unrealistically high assumption, for sure, because that would make them some of the highest-taxed residential real estate in the City. But it makes the math a little easier.

Of those $20K tax bills, roughly $8K per residence would go to D-64 each year. But the cost-per-student in D-64 is around $16K annually, so do the math: 31 units @ $8K/unit of RE taxes = $248,000 of revenue to D-64. Divide that by $16K per student and the whole development starts swimming in red ink if only 16 of the 31 units have just one student living in them.

Even if the developer were forced to pay an $8,000 per unit “impact fee,” the resulting revenue would barely cover the cost of 16 school kids.

And only for one year!

Add any more D-64 school kids above that 16 threshold and the District’s taxpayers will no longer be swimming in red ink, they’ll be drowning in the stuff.

So why is the D-64 Board even discussing such impact fees?

Ignorance and political posturing.

It seems and sounds like many/most of the D-64 Board members and Staff don’t really understand impact fees and how, historically, they have been used almost exclusively to address infrastructure problems anticipated from new development; e.g., the cost of sewer and water service improvements needed to handle increased demands from the new development, or the widening of nearby streets to add turn lanes and traffic lights for access and traffic flow, etc. Because that kind of infrastructure has predictable costs and lengthy useful lives, a municipality can calculate a one-time impact fee that puts the new development on the same financial footing – cost wise – as more established neighboring areas, and at no additional cost to the taxpayers.

Not so with the highly variable and annually recurring expenses of educating elementary school kids.

And that doesn’t even address the question of whether it would be legal for the City to impose impact fees on developers in order to obtain City approval of their developments, but then turn those impact fees over to D-64 or D-207.

As for political posturing, some of our local politicians are realizing that merely sounding fiscally conservative can fool many Park Ridge residents who desperately want to believe that their elected representatives truly are looking out for the interests of the taxpayers as much as (or more than) for the interests of the tax users. Spouting anything that sounds like it might save those taxpayers money, therefore, becomes a valuable political tool, especially for those politicians who don’t believe one word of their spiel but don’t have the honesty and integrity to publicly admit that they are big-government tax/borrow/spenders.

That makes a term like “impact fees” a wonderful substitute for real knowledge, understanding and principles.

So expect to hear the shallow-thinkers toss that term around for at least a little while longer, if only to avoid addressing the much more difficult problem of figuring out whether, and how, Park Ridge draws the line on allowing more housing for more residents who will drain the taxpayers’ pocketbooks with more and more kids using increasingly expensive public education.

And that’s irrespective of how good or mediocre the quality of that education might actually be.

To read or post comments, click on title.

5 comments so far

Just because impact fees aren’t suited to educational costs doesn’t mean the D64 board and the city council won’t waste hours talking about it.

How about just enforcing the zoning code that prohibits residential development at Mr. Ks and at various other sites in Park Ridge?

EDITOR’S NOTE: Enforcement of existing ordinances would be nice.

Poor Larry Ryles does not seem to have learned anything more about local government since he ran against Mayor Dave 4 years ago.

We certainly do “need to take pressure off taxpayers” as Ryles states, but he is wrong when he states that impact fees are “one of the ways” to do so, as this post capably points out. It sounds to me like his search for alternative revenue sources might already be pointing toward finding a way to fund teacher salary increases in 2020.

I hope the City’s new public works chair, Ald. Moran, promptly shuts the door on this dead-end idea so that Ryles and his D64 Board will stop wasting their time on it. Then the City can focus on the real target of zoning and multi-family residential.

Enforcing existing building codes would indeed be nice, the cost of educating students is robust to be sure, just wait until every school in PR needs multi million dollar additions and renovations to accommodate the influx of students from these proposed and ongoing multi family developments! Impact fees are a joke wake up sheeple!

You got it right, PW. Even if the Mr.K’s developer was willing to pay a $10,000 impact fee for each of those 31 units, that wouldn’t cover the cost of ONE YEAR’S worth of D-64 education for 20 kids in the schools.

Impact fees appear to be nothing more than a spit in the ocean.



Leave a comment
Line and paragraph breaks automatic, e-mail address never displayed, HTML allowed: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>