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Impact fees vs. bond issues and sales-tax increases: When a lot of the growth in the valley comes from oil and gas development, then it’s time for the impact fees to pick up the tab.
Why do they always quote monthly cost for tax increases? To soften the blow. The average home in Grand Junction is $263,000. Now we are up to $140.16 per year.
Then there is another 0.25 percent sales tax increase. The average spending per year in Grand Junction is $24,000. Oops! That means
another $60 year.
Let’s look at how it impacts commercial development. Commercial is taxed at 3 1/2 times the rate of residential. By the way, whenever a business is taxed it is passed on to — you got it — you! We recently lost one of the largest commercial developments ever proposed and a big factor is the tax base. Maybe we need to refigure the equation.
CHRIS CAMERON
Grand Junction
2 Responses to “It’s time for impact fees to pick up the tab”
Posted August 20th, 2008 at 4:49 pm Login to Send PM Report this comment
I don’t necessarily disagree with Mr.Cameron’s preference for impact fees to finance new or improved infrastructure to cope with the demands caused by growth. But we don’t have them right now in sufficient amounts to cover the impact of growth. And the Real Estate industry is very infuentional locally and they contend, correctly, that higher impact fees cause higher home prices which can price new housing out of the range of most home buyers.
But the bigger issue is that only less than 15% of sales tax reciepts in Grand Junction is from Grand Junction residents. That means that our infrastructure is impacted heavily by those from outside the city and tourists. And we are, after all , the county seat. The impact is coming from far more than just new development within the city boundaries. The Public Safety bond issue which calls for a .25% sales tax increase will cost the average Grand Junction household about $40 dollars per year, or about 75 cents per week.It does not tax food, prescription medicine or gasoline. And most of the reciepts will be from non-city residents. The tax increase will go away as soon as the Riverside Parkway bonds are paid off if there is a Yes vote for the companion measure which will extend the current TABOR revenue restrictions permanently. We are currently badly hamstrung by TABOR restrictions. THe formula for the restrictions is a one-size-fits-all based on economic and growth conditions in the Denver-Boulder areas. The formula doesn’t take into account growth far beyond that of that area and it dosn’t take into account the need for increased infrastructure to accommodate growth. THe best means for handling the Public Safety initiative is by temporarily raising sale tax a small amount until the Parkway is paid for and then “sunseting” the tax rise and eliminating the revenue and budgeting restrictions while leaving the requirement for public votes for any tax increases and indebtedness. It may not be the way to handle it in a perfect world but we don’t have such a world and the need is now. It will never be any cheaper and there will never be any part of the proposal that will be unnecessary. The major point is that this method is the only one that vistors share the burden of growth, wear and tear of the infrastructure and the need for expansion of the infrastructure.
Posted August 21st, 2008 at 10:22 am Login to Send PM Report this comment
You comment: ” By the way, whenever a business is taxed it is passed on to — you got it — you! We recently lost one of the largest commercial developments ever proposed and a big factor is the tax base.”
Part of the reason that businesses do not come to GJ is because of the impact fees charged. Guess who pays for them? Certainly not the business as they never pay taxes, the consumer ALWAYS ultimately pays for ALL the expenses of a business. They are passed along in the cost of goods or services they sell.
Never be fooled into thinking that growth pays for itself. We all do and it is just the cost of living in a community with a vibrant economy.
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