Report recommends changes to fiscal neutrality

 

Report recommends changes to fiscal neutrality

 

Date: January 23, 2014
by: Alex Mahadevan | Digital Content Producer

 
 

 

The second draft of a report on the fiscal side of Sarasota County growth policies begins with a sharp criticism of local planning regulations.

"Sarasota County... (has) some of the most prescriptive growth management policies in the country," reads the Laffer and Associates report on fiscal neutrality provisions for new development. "Accordingly, Sarasota has some of the highest and most volatile housing prices in the state, and is growing slower than both the state average and Manatee County."

But unlike the previous draft, which Sarasota County commissioners criticized for failing to recommend specific changes to fiscal neutrality policies, Laffer has honed in on recommendations.

For a new development project to receive initial approval, the developer must prove the project is fiscally neutral or beneficial — that taxes, fees, assessments and charges for services balance out new public facilities and services to support the development. The Sarasota 2050 plan, a controversial long-term planning document guiding building east of I-75, requires developers to do that at the outset of a project, and in subsequent phases.

The Laffer report recommends eliminating the ongoing nature of the fiscal neutrality provision, and using an economic model to determine the upfront cost-benefit of a new development to the county tax coffers. If the expected tax revenues of new development outweigh the cost of infrastructure to support it, the county could simply borrow the funds necessary for improvements — the new taxes should pay off borrowing costs.

The report also urges the county to lean toward impact fees rather than fiscal neutrality policies as a tool to assure new development pays infrastructure costs.

"Sarasota should focus the majority of its attention on setting accurate impact fees, then eliminate the fiscal neutrality provision," the report states.

 

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