Debate over municipal impact fees rekindled in the Legislature

For years, Arizona homebuilders and cities and towns have done battle over impact fees, which municipalities charged the development and construction industries to offset costs of “necessary public services,” such as streets, sewer, fire and police protection, for new communities. Recent court decisions and a 2009 moratorium on impact fees have given birth to a new impact fee reform measure (SB1525), modeled after laws in New Mexico, Nevada and Texas. A legislative moratorium on municipal development fees expires July 1. The Arizona bill was heard in committee Wednesday and adopted 6-1, sending it to the full Senate. The bill’s sponsor, Sen. Russell Pearce, acknowledged in testimony before the Senate Government Reform Committee , the “homebuilding industry is in dire straits,” but impact fees have “gotten out of hand.” “It’s a backdoor tax,” Pearce said, adding, “I’m not against impact fees, it just needs to be a reasonable [application].” “We’re driving people out of the ability to afford a home.” SB1525 requires impact fees must only be charged to fund the “current level of service” and not so-called gold-plated projects. Among court decisions cited as an example of the need for reform was one that sided with Mesa’s impact fee charged for cultural facilities, which has increased from $59 per home in 1998 to $221

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