I'm probably going to stay out of the fight over impact fees taxes this time around. I think I just want to remind folks what this particular impact tax increase pertains to so that the "discussion" can stay on track. And the reason I put "discussion" in quotes is because we all know this is going to turn into a shouting match fueled with lies and a complete disregard for the facts.
The tax will only cover water and sewer improvements that are outside of the pipe, valves and services already paid for by the developer. These taxes levied on homeowners (the end user always gets hit with the taxes) are to be put in a pot and saved for the day a new lift station, water storage unit, sewage treatment plant or other major facility is needed to serve the population. The tax paid by the homeowner may not even go to improve any water or sewer facility in their area - FYI.
This tax does not cover police, fire, roads or any other city provided service. Please do not use the need for their expansion in the argument over these specific impact taxes. Not a single dime will be used to hire more cops or provide more parks. There are other funding mechanisms that are natural to tax base expansion that fund those amenities.
To be clear - this tax only covers new sewage treatment plants and major water delivery and storage units. Got it?
Do remember that every other utility bears the cost of adding rate payers to their system. Electricity, gas and cable come to mind immediately. They will gladly extend their services into new neighborhoods because they know the new rate payers will more than pay for growth - they understand the concept of economies of scale. Think about that in this argument as it goes forward. The city wants to charge you $3,000 to get on their water system. Cable, gas and electricity = $0.00. Somebody has their math wrong or is fibbing a little.
(Side bar: Isn't it funny how the government claims that growth doesn't pay for itself while the private market not only claims that growth pays for itself, they show that is pays profits at a higher margin? How could their be such differing takes on the same situation?)
I would also like you to realize the cost of the impact tax on a new home in East El Paso. We're talking a $3,000 increase for each homeowner. That's not a big deal for a rich westsider who's financing $300,000 to $500,000 for a new home. That guy trying to buy a $110,000 home in East El Paso is going to feel it. That's almost 3 percent of the cost of the house. And that fee is likely not going to go toward a new sewage treatment plant or water holding facility for his new home. It's just a tax levied with no identified benefit for that specific taxpayer.
This tax is purely... hold on... I'm about to go Senator Shapleigh on you here - it's a purely regressive tax affecting the lower income folks much more than the rich people. It is a direct barrier to achieving long term financial health for medium and low income El Pasoans. There's no arguing that away. The dream of home ownership for hundreds of thousands of El Pasoans is just that much further away once this tax passes. Democrats in El Paso are going to have to rectify their love of the environment with their hate for regressive taxes.
You must also know that this idea of "fairness" among rate payers is misunderstood by the mayor - that's if they quoted him correctly in the paper (which they probably did). New rate payers don't suck the money away from the old rate payers. In fact, the new rate payers make it possible to upgrade and improve the old infrastructure. Just look at all the improvement below the freeway in the last ten years (thank you very much Joyce Wilson). None of that work is possible without the growth around the city. Those new properties valued much higher than the existing properties in old neighborhoods paid for those improvements. Don't let anyone try to tell you otherwise.
If the new tax passes, those older neighborhoods that desperately need upgrading are just going to have to wait. New development will shift outside of the city into the county and into New Mexico. Judge Escobar and friends will likely welcome the revenue given their recent money troubles.
Southern New Mexico will do everything but build the houses for the developer to get them to build on their land. They would love the new tax base. A few thousand new homes in Dona Ana has an extreme impact on their revenue.
And if you don't think that after 2009 that all of the developers in town went out and bought cheap land in the county and in New Mexico - you're pretty dense. After the first impact tax was passed, they saw the writing on the wall. There's no real difference in living in Santa Teresa or in El Paso these days. Hell, the city and TXDot have done everything they can to make it easier to commute from over there into El Paso. Once Country Club is done there will be three super highways into El Paso from New Mexico. Enjoy El Paso while living in New Mexico and paying lower taxes.
The other fact you need to embrace with this move is that El Paso is effectively stating that it refuses to grow any further. El Paso prefers to "stagnate" as some economists call it. This tax would signal a period when El Paso would retract into itself sending medium income dollars away from the city out to the county or even beyond. Real estate supply in the city will become limited and that will drive up prices - and drive out the lower and middle class residents.
Right now the cost of living close to downtown is kept reasonable by the choice of affordable housing not too far away. Remove one factor and the other will skyrocket in price. This is not a guess - this scenario has played out in cities around the country, and the world, for hundreds of years. Infill is for rich people only. El Paso doesn't have that many rich people.
The political ramifications here are rather interesting. Most of Steve Ortega's opposition by the monied folks in town was due to his outlook on development and impact taxes. While one or two developers backed Ortega, all the others strongly backed Mayor Leeser. The fear was that Tania Chozet would win Ortega's seat and with Ortega mayor they'd rain down hell on the real estate economy in El Paso with their progressive views. Screw the baseball stadium - Leeser was about saving the housing market in El Paso.
Today Mayor Leeser is talking like a progressive. I mean, if you just saw his words on a piece of paper you'd think it was Ortega, Byrd or even Senator Shapleigh being quoted. Leeser championing this issue is like Grover Norquist saying "I think we need to double the size of the IRS and raise taxes to fund that increase in the size of government." It's just weird.
I'm sure Leeser's biggest backers are nothing short of livid with his liberal, anti-business stance on this issue. He was hired to do the exact opposite of what he's trying to do here. I can't imagine what his backers are saying to him right now. He's about to cost three developers who supported him a few million each. They would have been better off supporting Ortega!
It will be interesting to see how Noe, Holguin and Robinson react to the taxes being higher for their districts. I bet they vote against them citing "fairness."
Lilly will vote for higher impact fees along with Limon and Niland.
The swing votes will be Romero and Acosta.
Romero is facing a recall and will likely face Jim Tolbert to save his job. That district will demand he vote for the impact fees. If he knows what's good for him...
Acosta's constituents don't care about this issue, so her ear will be toward future financial support for a run for higher office. I would suppose the developers would get to her and she votes no.
That makes it a 4-4 tie and Leeser would have to break it. He's already blabbering on about "fairness" like he knows what he's talking about, so you can imagine he's going to vote to put a new tax into place.
And once that happens, the new "business mayor" will have voted for two tax increases in his first year in office. Wow. Steve Ortega won that race. Or at least his ideas and platform did. That's the real story here.