Cities require developers to pay impact fees before allowing them to build large-scale developments. In theory, the fees protect residents from subsidizing new development by having developers pay for necessary public infrastructure and services, like roads and sewers. But too often, Arizona cities use impact fees, like Mesa's "Cultural Impact Fees," to force developers to pay for a spending wish list that has nothing to do with defraying the public cost of new development. In practice, impact fees are just special taxes on developers. And when developers pass them along to future homebuyers, who never had a voice in local politics, they amount to taxation without representation.
Given this reality, the fee freeze was certainly relevant to the budget issues of the special session. There is nothing arbitrary about the Legislature thinking a fee freeze, like a targeted tax cut, might improve the state's budgetary outlook by triggering more development, more money in homebuyers' pockets, more economic growth and consequently, more tax revenue. For this reason, the League's threatened lawsuit shouldn't pass judicial muster.
If a targeted tax hike would have been constitutional during last summer's special session, so are targeted tax cuts like the impact fee freeze. Rather than submitting to threats of litigation, the Legislature should call the League's bluff. Let the League file a lawsuit and then force it to prove impact fees for museums and visual arts centers are not taxes and that the goal is only to make development pay for itself.
Nick Dranias holds the Goldwater Institute Clarence J. and Katherine P. Duncan chair for constitutional government and is the director of the Institute's Dorothy D. and Joseph A. Moller Center for Constitutional Government.
Learn More:
Goldwater Institute: Home Builders v. Mesa
Arizona Republic: Controversial impact fees fund arts for Mesa
Arizona Republic: Arizona cities blast impact-fee freeze
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