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Venice Florida! dot com

Hey buddy, can you spare a dime?
Due to inadequate impact fees, how much does growth really cost the average lone taxpayer? For every new single family home that is built, an existing taxpayer can expect to have to pay 10, which really isn't that much... until you figure in multipliers like 40,000 new homes

-- John Patten, 10/17/06
--
jpatten@veniceflorida.com

Got a comment? Make it here.


County Commissioner Jon Thaxton (left) and Venice Taxpayers League Vice President Ray Lesko at September's VTL meeting in city hall


The war between the North and South revisited (yawn)

So the county and the city are at war over annexations and rezonings and growth and home development and construction and strained natural resources and egos and concurrency and money (concurrency is the concept that roads and schools and sewer lines and such have to be built concurrent to the growth that will require it). But mostly, it's about the money. It's always about the money.

Of course you know by now that the county is blaming the cities of North Port and Venice for having wild and debaucherous Growth Gone Wild parties. The county is stating that between the two cities and the county's own projected growth plans, they can't keep up with the capital expenditures needed for concurrency. The county sheriff is likely to need a new jail and rumor has it that he wants it somewhere within the Venice city limits. County utilities will need more sewer lines.  Roads, those ultra-expensive connectors between home and away-from-home, need to be built.

That's why, the county says, they need Venice and North Port to chill under the county's cold thumb. Taxes are skyrocketing as it is and the tax burden for existing taxpayers to pay for all of the growth that has happened in the last five years or so, plus the taxes caused by the projected new growth that the county wants, is all going to lead to ever higher and ever higher taxes yet.

So Sarasota County says this whole mad growth and tax escalation thingie can be brought under control if the cities knuckle under and let the county, and only the county, approve all future growth.

Drive outside the city limits in Venice. Go east on Center Road. All of the new county-approved gated communities that are glomming that span of road makes Venice planners look like amateurs. Then drive east on Venice Avenue past the city limit sign and head towards Snook Haven. Be comforted with the knowledge that all that ugly greenery that nature put there will soon be replaced with tan stucco and red tile roofing.

Thank you Sarasota County for saving us from uncontrolled growth. God knows what we would do without you.

 

Lost
Something curious and new hit me within the past five or six weeks. I'm probably like most folks, not the sharpest knife in the drawer when it comes to arguing the fiscal complexities of ever-growing urbanization. I learned this stuff late in life after watching the fights about growth between Venice Taxpayers League prez Herb Levine and former and present city councils and city managers. City officials have touted growth as the magic elixer that will bring in greater tax revenue but just the new residents will be hit, while Levine cited study after study, stating that growth costs everyone by causing an escalating debt storm.

That Levine, he crazy crazy. Crazy man when he argue growth. So crazy that he ought to be in jail.

Last month, County Commissioner Jon Thaxton spoke to a packed Venice Taxpayers League meeting. Thaxton was doing advance roadwork for the then-proposed annexation and rezoning amendment, a ballot initiative that he and the county wanted badly. It would castrate city hall by not allowing them to build out and build out unless they begged and groveled before county officials first.

County officials really enjoy stuff like that. Begging and groveling, I mean. So do city officials, unless they're the ones who have to beg and grovel.

Levine and his usual suspects were damned near orgasmic at the prospect of this baby hitting the ballot screens. I was leaning towards Levine's point of view right up until I asked a series of questions that, apparently, nearly everyone else on the planet already knew the answers to and the ramifications of. I had to fight off another Taxpayer Leaguer to finish my series of questions, but I walked away amazed and perplexed.

What's the big deal, I asked Thaxton. We build, you assess impact fees to pay for the supporting infrastructure and such. Is it just that you guys are bad at managing the money?

Thaxton answered that it would be great if the impact fees covered 70% of the cost of the full economic impact of a single new house, but that, in fact, the number was closer to around 35%.

I. Never. Knew. That.

It never even dawned on me that there might be such a disparity between the created cost and the actual payment. Over the course of the next week or so, everyone in government and in the various factional government fanboy clubs looked at me strangely when I brought it up. From Levine to City Manager Marty Black to one of the principles of Mike Miller's Waterford Company to Jeff Boone, all agreed that Thaxton's assessment was about right and what the hell planet had I been living on that I had never figured that out before?

I went into a fog of sorts. This proposed amendment that everyone on all political sides felt strongly about... it suddenly meant nothing to me. The worst part was... I felt stupid, like everyone else had known the rules and I'm showing up on a municipal golf course with a basketball -- well, I thought we were playing a game of ball-in-the-hole. I thought I must be the crazy one because I was the only person I knew who felt that in the long run and on the bottom line, this whole amendment issue meant absolutely nothing. All of the arguments on both sides were packages of pure USDA Grade A cow chips.

So I went a little crazy. Maybe a lot. Then I got mad.

 

Jump to September 14
The county commission meeting on September 14th that dealt with whether or not the amendment would go on the ballot, every single speaker, from the squeaky nails-on-a-blackboard voice of Venice Neighborhood Coalition's Sue Lang to CQG's aging frat-boy C.J. Fishman, had strong opinions about whether or not this amendment should be tossed onto the ballot for voters to pounce on in a feeding frenzy of tax revolt (video of the entire fiasco -- just move the time slider back and forth and you'll hear a whole bunch of folks saying the same things over and over).

I wasn't going to speak. Lame duck commish David Mills gave everyone three minutes due to the vast number of folks who wanted to chant their mantra of choice on the issue. I watched hour after hour as citizens walked up to get their one-fifth share of Warholian fame to speak their mind about why this amendment was the greatest thing since Jonah Salk or the worst thing since Mussolini. This was Peter Gabriel's Grand Parade of Lifeless Packaging. Disgusted, I left and went to a nearby burger joint to wolf down a burger, fries, and a shake. I returned to the meeting -- the goddam parade hadn't skipped a beat. Drone after drone walked to the podium to speak words that had already been spoken by somebody else. Standing in the back of the hall next to Marty Black, this towards the end of the march of the opposing clones, I turned to Black and said "I can't take this bullshit any longer. I'm just gonna go up there and piss everyone in the county off."

Black gave a little smile and said "Yeah, you need to expand your range."

Levine was in front of the microphone, waving a picture of dollar signs and saying that this was why so many people in government and the construction biz were behind  trying to kill the proposed amendment. This led to a bit of nastiness in which commish Paul Mercier mistakenly thought Levine had just accused him of taking graft. Mercier and Levine sparred angrily while I filled out my request to speak card.

I turned in the card and was called to the podium. I gave my speech about my feeling on this circus and told the county commissioners that this amendment meant nothing if they didn't address the impact fees. They were just jerking everyone, myself included, around (video at right).

I fully expected to get lynched before I could walk out of the hall. Instead, something very strange happened. I ended up talking with Black, local developer attorney Jeff Boone, a couple of developers, Levine, some anti-growth folks, and all of them... agreed... with... me.

WTF?

I've lost it. The touch is gone. I can usually piss most people off without even trying, this time I was on a deliberate mad tear to commit political suicide and I was getting praised for it from weird corners.

This is a damned strange town.

Levine had a slightly different take. He agreed that I was right, but he'd rather I had supported the amendment anyway. Levine's reasoning was that the cities and the county were both growth machines and as such, they were both his political enemies when it comes to the subject of growth. "Any time I have my two enemies in a fight to the death, I'm going to urge them on because then I'll only have one enemy." All things considered, that's actually pretty sound logic.

 

Hey buddy, can you spare a dime?
Sometime later, I came up with a bizarre question: on this disparity between impact fees collected and actual expenses paid, how much does it really cost the average taxpayer? This assumes that there really is such a thing as an average taxpayer (there isn't), but just for grins, let's assume for a moment that such a beast actually exists. I asked the county for some simple numbers: the actual impact fees that the county charges, the number of homes that are currently on the tax rolls and the number of homes that are under construction or are about to enter the tax rolls.

I didn't get simple answers. In fact, I got a variety of different answers because of differing impact fee structures in the county (south county homes are hit with slightly higher impact fees than north county homes, for instance), but the answers I did get gave me at least some rough numbers to work with in a pretty simple calculation.

The numbers I ended up settling with (which are already out of date, but) were these: 202,530 existing homes on current tax rolls; impact fees of $10,693 are charged per home (south county amount); and about 7,000 new homes that are either under construction or were just finished are about to hit the tax rolls. Now if I accept Thaxton's statement that impact fees only cover about a third of the actual cost of impact, that means for each new house that is built, an additional $21,386 worth of expenses per house is spread around to every other existing taxpayer.

I didn't include the impact of commercial development and the spread  that would go to existing commercial taxpayers and residential taxpayers, but I also wasn't including commercial property taxpayers either, so the two would likely cancel each other out and probably have a minimal averaging effect on the final output.

I did some elementary and amateurish crunching and came up with what I believe to be a reasonably close figure: Every new house that is built costs an average already existing homeowning taxpayer an additional 10. That's 10 per new house per existing taxpayer.

So if I'm an average taxpayer and I'm standing outside of a gated community of, say, 700 homes, I've paid $70 just for the pleasure of looking at the outside of that gate. I have to pick up that debt whether I like the looks of that gate or not, and that's only one gated community.

Down in North Port, they are talking about some 40,000 new homes. That's a whopping average $4,000 per-each-county-taxpayer worth of debt. According to the county, there's over 7,000 new homes that are just about ready to come onto the tax rolls. That's another $700 right there.

That 10 per house adds up real fast, but that distributed debt only addresses infrastructure -- roads, sewers, water, etc. There's the additional expense of added services (fire, police, schools, etc.) that aren't addressed in the impact fees. Even then, all of that only addresses the economic impact. There's also sociological and ecological impacts, costs that are very real but not immediately monetary and therefore seemingly intangible.

The averaging I've done is a fiction, to be sure, and here's why. The biggest tax burden goes to homes that don't qualify for the homestead exemption. The debt doesn't pile up on homesteaded homes, but it still bites the homesteaders -- they're trapped. They can't sell and buy another place because the exemption doesn't travel with them. Selling a home and buying another can cause a tax increase of 1,000% or even more if you've owned your current home for more that ten years because the newly purchased home is taxed at a newly reassessed rate.

Then there's the snowbirds who can't qualify for homestead as this is their secondary home. They pay the full rate. Rental properties, even annual rentals where individuals and families live in the home year round, don't qualify for homestead exemptions despite the fact that annual rentals are quite clearly a homestead in the popular sense of the word.

Many who invested in the growth boom are losing everything because of escalating taxes, property insurance and the inability to sell at any reasonable price. A massive wave of foreclosures can only follow, and that's good for nobody: banks, businesses, real estate sales and homesteaded homeowners.

In this growth created market, there's only one winner: according to recent articles in the newspapers, auctioneers are making out like bandits. They can't yammer fast enough to get from one auction to the next.

So that average tax debt of $4,000 from 40,000 new homes isn't really an average debt of $4,000. Homesteaders won't pay it and as a result, all of their share gets doubled over onto all of the homeowners who aren't homesteaded, which in turn makes their tax debt (and tax payments) even higher.

Add one more item into the mix: escalated property values brought about by the real estate frenzy of the past few years, which in turn causes higher assessments because of taxable value.

All of that adds up to monster tax bills for anyone who has bought a home in the last few years. Additionally, renters are hit with the same inflation caused by all of this. The landlord has to pay the tax bill, so the costs are passed on to the tenants in ever-escalating rental rates. So if you are a renter, don't think for a second that none of this affects you, it does and in a very big way.

Property values would have risen anyway, that was arguably an uncontrollable factor. But the tax debt you picked up because of growth, because you are picking up the tab for someone else's profits -- that could have and SHOULD HAVE been controlled.

It wasn't, so you're screwed. But those new gated communities that you are paying for do look damned nice, you have to admit that.

 

Raise impact fees? Are you mad?
So why not raise the impact fees? After the county commission meeting, commish Nora Patterson went out of her way to make sure that I understood that raising the impact fees to a fair and realistic amount will never happen. That leaves only one alternative. As the debt continues to rise from both city and county development, the millage rate will have to be increased. It's easier for politicos to anger the existing populace and blow off the few who figure all of this out. Much easier than it is to anger the developers whose campaign donations are needed for a successful re-election bid.

 

John Patten is the head of Web Operations for Creative Pages, and has worked in broadcasting for over 12 years. He can also be incredibly rude at times.

 


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