Arizona Home Builders May Pay New School Tab

A group of Arizona mayors is pushing a controversial solution to over-stuffed classrooms: make home builders pay an "impact fee" for the construction of new schools. The proposal, which goes to the state legislature in January, is being closely watched by other communities in the South and West facing the same problem.

Communities across the nation already collect impact fees for amenities like parks, fire stations, roads, and sewers. Orange County, Calif., is one of the few that collects impact fees to build schools, though developers there are pushing for a return to using bonds and property taxes alone.

"Should development pay for itself? I believe the answer is yes," says Phoenix Mayor Skip Rimsza, one of the mayors behind the move. "We have been solid partners with the home-building industry and have created great economies over the last decade," Mr. Rimsza said. "All we're asking from them is to give back to schools."

California developers have strongly opposed school impact fees, saying they push new home prices beyond the reach of first-time home buyers. Developers pay the fee, based on the size of a house, after each new home is sold.

In Denver, builders have successfully sued to roll back the fees. Other critics point to the lag between when the school is needed and when enough money has been collected to build it.. Some communities can wait as long as two years for a new school - too long in a rapidly growing area.

Rimsza says Arizona won't encounter the developer opposition seen elsewhere because school impact fees will be lower than California's and just one of several funding sources. "[Those states] have tried to build the entire facility with impact fees," Rimsza says. "We believe impact fees should be used to advance construction of schools, not pay for them [entirely]."

Arizona will allow individual cities and towns to collect impact fees, unlike California, which gave that job to school districts, says Kent Fairbairn, a lobbyist for the League of Arizona Cities and Towns. With some school districts growing over 10 percent annually, supporters hope the proposal, debated for 10 years now, will finally pass because it is no longer backed solely by the Arizona School Board Association.

Critics worry current property owners would also be taxed. "The fees should only fall upon new development," says Richard Lai, a professor in the Arizona State University planning department. Rimsza disagrees. "Good schools add value to the community. Even if people don't have kids in the system, their house is worth that much more."