Cities of NC, unite!

Is Wake County being a spoiled crybaby?  Or is it a municipality straining under a breaking budget that's watching its money go to other parts of the state?  Today's paper brings a story about Wake County commissioners raising a fuss about the fact that the urban parts of the state are footing the bill for the rest of it.  Frankly, I don't think it's necessarily a bad thing that the rich, thriving parts of the state contribute disproportionately to the budget, nor do I think it's a bad thing that we don't see a full return on our contributions.  But I do have some sympathy for Wake facing massive budget needs for the school system, although in a lot of ways they got themselves in this mess by allowing themselves to grow so ridiculously fast. 

The rural parts of the state are suffering badly in a globalized economy that has eviscerated North Carolina's manufacturing and agricultural base and left a heartbreaking string of dying small towns.  The urban parts of the state are economically thriving, but our roads and schools are reaching the breaking point.  Revenues continue to grow rapidly, but not rapidly enough to keep pace with the evergrowing infrastructure and service needs. 

There is, however, a remarkably simple solution to all of this.  It's not even a new idea by any stretch of the imagination.  But you have to click on the little "Continue reading" link to find out what it is... 

They're called impact fees.

Right now, in Durham County, as in most counties, when a development firm wants to put in a new housing development, it has to pay the county a fixed fee per house in order to cover the cost of running water, sewer, storm drains, and other county services out to the development.  These fees are closely monitored by the state to ensure that all they do is go to support the things that they're supposed to; the county can't charge more than it needs for sewer lines, then turn around and use it to pave the streets.  However, by default, the only things the county is allowed to charge for are streets, utilities, and parks and recreation. 

One thing here is noticably absent: schools.  Two North Carolina counties, Chatham and Orange, have received special dispensation from the State to charge an impact fee on every new house to go towards school construction and capital upgrades.  In many cases, it is the schools budget which is breaking the backs of urban budgets across the state.  I know for a fact that Durham, Wake (Raleigh), Mecklenburg (Charlotte), and Buncombe (Asheville) are dealing with schools that are bursting from growth, and I would guess that Guilford (Greensboro), Forsyth (Winston-Salem), New Hanover (Wilmington), and other quickly growing counties are experiencing the same.   And so, not surprisingly, Durham tried for a decade, hat in hand, to go to the state legislature and ask for the right to charge fees, only in Durham County, to pay for school construction.

Durham's legislative delegation overwhelmingly supported it.  The Commissioners supported it.  The citizens as a whole supported it.  So why didn't it pass?  Simple.  Because people who don't represent Durham blocked it, at the behest of the homebuilders' lobby.  These people, you see, are making a killing throwing in one crap subdivision after another anywhere close to RTP, or to downtown Asheville, and the imposition of an additional fee, much the same way a tobacco tax slows cigarette purchases, will slow down the rate at which developers may purchase open land, build subdivisions, and sell cheaply made homes built with low density wood that rot and sag after less than a decade.  The key here is that impact fees do not simply get passed on to home buyers, becuase as much as tacky, insulting commercials for new houses try to make you think otherwise, homebuyers have more choices than just new construction.  Because it decreases the speed at which they can be sold, impact fees also lower the asking price for developable land, which of course means that landowners are less likely to sell to a developer.  So, in all, the money generated by impact fees comes from a lot of places and has a lot of effects, including slowing growith, increasing the value of preexisting homes (whose property owners have been paying property taxes to build the new roads that support the developers), and slightly increasing the sale value of new homes.  (More can be found in a Brookings Institute report on impact fees.)

None of this is good for developers.  So, they haven't allowed any county to pass legislation to allow such fees since 1987.  Finally frustrated with all of this, Durham's county attorney looked to language in the state's constitution which allows counties to charge for necessary services, and requires them to provide a quality public education system, and said that the constitution gives us the right, and went ahead and did it.  Of course, as expected, the NC Homebuilders Association, whom I cannot sufficiently express my contempt for, sued to block it, eventually winning in court.  (Because of the Herald-Sun's silly policy of hiding articles after a week, I'm forced to link to an N&O article on the subject, which provides a good overview of the case.) 

So, for Durham, it's back to the drawing board.  But let me go back to why Durham couldn't get it through the legislature: (which has all sorts of side implications in Geography for the manifestation of scale in the human and political world).  Remember, Durham's delegation faithfully tried to push this legislation through, but each time the homebuilders have managed to convince enough important lawmakers who represent other parts of the state to block it.  After all, it doesn't concern their district, so for them, it's just a free campaign contribution for a very wealthy group with a lot to lose if the legislation goes through.  Because the governmental venue through which this legislation must pass spans the state level, a group which is organized at the same scale as the state such as the homebuilders can influence enough non-local politicians, such that regardless of how united the Durham front is, it can't break through. 

Ah, but what if the cities unite? 

And that's where this article about Wake Couty gets interesting.  As much as I think Wake's crowing about the state budget is misplaced, their idea to get the big cities together to fight politically is spot on.  The urban counties, of course, have a disproportionately higher population than the other counties (duh), and hence have greater representation as a whole.  If the legislators from Wake, Durham, Mecklenburg, Buncombe, Guildord, and New Hanover decided they wanted to push through impact fee legislation, the homebuilders wouldn't have a chance in hell of stopping it.  Their best gambit, of course, is to convince those legislators that impact fees are a Really Bad Idea, just as they convinced the impressionable Mary Jacobs on Durhams Board of Commissioners to vote against it.

However, one key features of state legislators is that their districts are small enough that highly organized movements within them can gain their ear and compete with large dollar donors for attention.  So what we need is a statewide alliance of local urban activists to come together and come to some consensus on how to push the ability for the wealthier municipalities to pay their own way out of their costly problems, rather than dickering over how much of the state budget goes where.

Let the cities continue to support the rest of the state in a time when rural areas are struggling, but also quit putting up obstacles to our ability to actually pay for our own solutions to problems. 

Comments

[Anglico]

Great post. Thanks for linking it to BlueNC. Let's make this happen.

[Joseph H. Vilas]

I think Durham should kick Wake County in the crotch, then run to the West Coast. :)