From the Keller Citizen today:
The Keller Economic Development Board is eyeing an aggressive incentive policy that includes sales tax breaks and fee waivers for prospective businesses.
The nine-member board proposes waiving all construction-related fees and sales taxes over a business’s first three years. It would be a broad attempt to pump up the city’s lackluster commercial tax base.
My first thought was this was way too aggressive and the City Council will never pass it. My next thought was with all the doom and gloom in the news, this may indeed have a chance of passing.
What are your thoughts?
I’m too passionate about this issue to let my remarks languish in the comments. — Jim Carson
In my first city council goal setting retreat, I proposed that one of our goals should be the dramatic reduction, and ideally elimination, of impact fees.
Impact fees are substantial penalties imposed on developers under the pretense that the development causes an increased “impact” on city services like roads, police, fire, water and sewer. While it is certainly true that development does cause costs for these services to rise, that cost is more than made up by water and sewer usage fees and property taxes. In retail development they are also supplemented by sales tax. The idea that developers impose a net cost on a community is a despicable fraud. Just look at the near-unanimous call for MORE DEVELOPMENT for crying out loud.
Impact fees are hidden taxes promoted by cowardly city managers, self-important mayors and council members, and freeloading citizens who want ever more services and ever less taxes. Impact fees are a way of gouging the productive elements of society who often have no vote.
When we were prioritizing our goals, Steve Trine whined when I put three or four of my dots (votes of importance) on impact fee reduction, claiming that it wasn’t “fair” that I had gamed the system. Bob Kirk stated his belief in the lie that development is a net cost to a community, and the matter was dropped.
All that notwithstanding, I am still against the idea of granting breaks to selected businesses temporarily. Whatever happened to the idea of the level playing field? Better known as Equal Protection of the Law, as expressed in the Fourteenth Amendment.
I doubt there is a single person in Keller who would call for punitive taxes to be levied on small upstart businesses. But by imposing draconian impact fees on everyone, and then granting relief from these fees to a few larger, more legally sophisticated developers (like was done for Tabani/Stein Mart), we’re effectively doing the same thing.
As for “rebating” sales taxes — again for selected businesses — we need to remember that these taxes never belonged to the business. They belong to the people of Keller from the moment of the retail transaction. Returning sales taxes to a business is financially indistinguishable from the city endorsing your property tax check and handing it to the retailer.
The city council should abolish impact fees for all and “rebate” sales taxes to none. Fair’s fair.