Excise tax replaces impact fee

With majority of precincts reporting in, voters OK plan

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— An excise tax designed to replace the city's impact fee on new development was headed for approval Tuesday night.

With six of eight precincts reporting, 56 percent of voters had approved the excise tax.

The 1.2 percent tax on new development will replace the current impact fee on Jan. 1. Like the impact fee, the tax is designed to force growth to pay for itself.

"This is a much fairer way for our community to deal with growth," City Council President Kathy Connell said.

The impact fee on a single-family home is $4,000 no matter the size or value of the home. Because excise taxes are on a percentage basis, a homeowner building a $1 million home would pay more than a homeowner building a $300,000 home.

Both the impact fee and the excise tax contain are designed to accommodate affordable housing.

The impact fee was created by the City Council a year and a half ago with the intention of having "growth pay for itself." With the excise tax, development will still pay for extra infrastructure needs such as expansion of water, sewer, roads, drainage, environmental system and credits for open space.

Impact fee committee member Kathi Meyer said she was pleasantly surprised by the outcome because the committee had only $500 to spend on educating the public on the issue.

"I'm thrilled the taxpayers took the time to really understand this," she said. "The community agreed that there was a better way to deal with growth impact issues."

Connell said many residents felt the impact fee was unfair. The council formed the Impact Fee Advisory Committee to look at alternatives to the fee. The excise tax is the result of the committee's work.

Anthony Vaida, who chaired the committee, said the excise tax gives taxpayers an opportunity to spread the cost of development.

The excise tax makes a large adjustment on the amount commercial development will pay. The impact fee on commercial development is between $1,200 and $1,400 based on square footage. Now, all commercial developments will pay the same 1.2 percent charge required of all new buildings.

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