Gwinnett Impact Fees

One question often asked about impact fees is, “Will charging them cause my tax bill to decrease?”

The short answer is– they can. The following example is intended to provide a generalized overview of the potential value of an impact fee program solely in terms of the benefit to the taxpayer where the fee replaces general funds for the construction of the selected public facilities. ~

In 2005, Gwinnett County issued building permits for 8,258 detached homes, townhouses and mobile homes. (2005 Development Activity Report Draft)

This example assumes a per single-family housing unit fee of $1,600. (This example does not consider fees on non-residential development, which would significantly increase total revenue.)(The fee amount is completely fictitious and based on a sampling of metro Atlanta jurisdictions charging fees: Cherokee Co. = $1,643; Henry Co. = $1,661.50; City of Roswell = $2,057; City of Alpharetta = $1,131; City of Atlanta = $1,544; the national average is much higher)(Source: county and city web sites, 2005 National Impact Fee Survey by Duncan and Associates, Austin TX)

Total potential revenue generated by fee on single-family development in 2005: $13,212,800 (8,258 units X $1,600)

In 2005, Gwinnett County assessed a millage rate of 10.14. The tax rate generated approximately $231,806,000 in tax revenue, or $22,860,552 per mill. (Source: MillageRate.com, from county documents)

The $13,212,800 generated by the fee on single-family housing units in 2005 is equal to .578 mills ($13,212,800 / $22,860,552 = .577974). The amount represents 5.1% of the total property tax revenue necessary to fund the 2005 budget.

The 2005 property tax bill (county general fund millage only, not considering exemptions) for a $200,000 home was $811.20. (Source: MillageRate.com)

On a $200,000 home, a reduction of .578 mills equals a property tax savings of $46.24. The higher the tax bill, the greater the benefit. (Source: MillageRate.com)

Conclusion

Had Gwinnett County charged an impact fee of $1,600 on every new single-family housing unit permitted in 2005 (even if no fee was charged on any other development type) and that money used to fund public facilities which would normally be funded in the general budget, the county could have passed to the current homeowner a benefit in the form of a significant property tax cut (a 5.7% decrease for a $200,000 property, not considering exemptions).

In addition, the purchaser of the new home on which the fee was charged would have received a “rebate” of a portion of the fee passed to him in the purchase price in the form of a lower tax rate the following tax year.

An impact fee program, even one that generates a revenue level that some might consider insignificant, can have a measurable benefit to current and new residents… in dollars and cents that you can count.

(Total housing units: 2000=11,203, 2001=9,453, 2002=9,316, 2003=8,562, 2004=8,753)