Successfully Going Broke

By Mitch Traphagen  (mitch@observernews.net)
 

TAMPA - In the business world, consultants are not well known for providing specific conclusions. For many, the more nebulous the findings, the better. The more precise the prediction, the greater the chance of being wrong.

The Hillsborough County City-County Planning Commission hired a consulting firm to provide a picture of where the growth is leading but there was no escaping their conclusion: Hillsborough County is growing rapidly and is going broke in the process.

The report was prepared by Tischler and Associates of Bethesda, Maryland. On August 25, consultants Paul Tischler and Carson Bise II presented their findings to the Planning Commission Board in Tampa.

In report after report, survey after survey, the Tampa Bay area is the darling of the nation. Unlike much of the country, the job market is good, crime is relatively low, the housing market is still booming and people are flocking to the area.

Common sense dictates that it is the last statement that is making Tampa Bay a star. The area is growing, the jobs are coming, all is well.

That is not necessarily so, according to Tischler and Associates.

The problem, according to the report, is that the revenue generated by growth is less than the cost of growth. That means it costs more to provide the roads, schools, utilities and other services than is gained by the additional revenue of the growth.

The numbers arenít small. According to Tischler, based on current sources of revenue, the deficit will total $2.1 billion by 2025.

According to Tischler, that impact will be felt primarily by the existing residents. Money that would be used to repair sidewalks, roads and parks in existing neighborhoods will have to be diverted to pay for new roads, new sidewalks and new parks in the new developments.

"The people who are effected most are the people in the existing neighborhoods," said Tischler. "Existing levels of service and the quality of life for those of you here today will suffer."

The report recommends an increase in the impact fees assessed by the county for new construction. The idea, simply put, would be to make the newcomers pay for their share of the infrastructure.

That notion was disputed, however, by Mike Peterson of Commerce Realty Services in Apollo Beach and by Joseph Nakiewicz of the Builders Association of Greater Tampa.

"A lot of things have happened that have chewed away at the revenue pie that arenít the fault of growth," said Peterson. "Why do we do politically popular things like reduce millage rates but talk about raising impact fees?"

Nakiewicz facetiously asked if we are losing money through growth, does that mean that we would make money if we lost population?

"We want to be careful that we do not shoot ourselves in the foot," said Nakiewicz, voicing his concern that raising impact fees would have a detrimental effect on the growth that is driving the region.

More than half of the projected deficit, $1.1 billion, in the Tischler report is attributed to the Hillsborough County School Board. Growth is projected to add $2.3 billion in revenue over the next 22 years but expenses are projected to be $3.1 billion.

More than half of that deficit, $526 million, is placed on School Choice Region Five, which includes all of south county.

"This is a result of the magnitude of new development assumed in this Region, which includes over 42,000 new housing units and almost 23,000 school children," states the report.

Not all of the blame was placed on growth, however. "Is new growth alone the cause of this problem? The answer is no," said Tischler. "Statistics show that there are more cars per household than there were 10 years ago and there are more trips being made. You could have stopped growth 10 years ago and youíd still have traffic problems. The new growth doesnít pay for itself but it is not new growth alone that is the cause of the problem."

The report also pointed to a reliance on grants to pay for health and social services in the county. Given the recent budget cuts, this creates an "artificial" level of service. The grants simply may not be available in the future.

"Hillsborough County cannot provide current levels of service without finding new sources of revenue," said Tischler.

The report recommends an increase in growth related sources of revenue including impact fees, ad valorem rates and communications services taxes as possible solutions.

Planning commissioner Teri Cobb made a motion to forward the report to the Hillsborough County Board of County Commissioners.  The motion was passed unanimously.

According to Planning Commissioner Anne Madden, the BOCC has also commissioned a similar analysis.

Growth has become the business of Tampa Bay. It is a circle - the jobs come because the people are here, the people come because the jobs are here. Tampering with that circle is not for the faint-hearted.

It is easy to say that newcomers should pay for the additional services that are required by their presence. Unfortunately the solution may not be that simple since an increase in impact fees may well result in making the region less attractive to newcomers. Not to mention that few, if any, existing residents have actually paid for their share of the infrastructure when their moving van was unloaded.

On the other hand, long time residents have made an investment in the community through years of paid taxes. Should their services be reduced in favor of new developments?

The solution, of course, depends upon your point of view.

Tischler and Associates has completed more than 400 impact analyses around the nation, including reports for several of the largest counties in Florida.

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