The Truth About Impact Fees
                  Editorial by Jeff Goolsby, Editor

      There is a huge misconception about the need for impact fees in Henry County as well as not understanding the inflation/dollar devaluation disadvantage caused by impact fees. The announced need for the impact fees is to relieve the congestion caused by the recent fast growth in Henry County.
      The gasoline tax we pay each time we buy gasoline is earmarked to pay for road development, improvement, and maintenance for the area paying the gasoline tax. Road tax collected by Georgia is 10.5 cents per gallon and the Federal tax is 18.3 cents per gallon. Last year the Georgia road tax including accrued interest amounted to $691,000,000. Federal Road tax paid in Georgia amounted to $1,100,000,000 plus interest accrual.
      The 2,000 census reported 117,000 population in Henry County. Prorating by population, the amount of road tax collected in Henry County was approximately $26,000,000. In fiscal year 2,000, Henry County received $1,500,000 and in fiscal year 2001 through April received $27,000 from these Georgia road funds. This small amount is absurd and a serious neglect by our elected officials, which must be corrected.
      If Henry County had received any reasonable portion of these funds we could have already expanded the roads and Interstate exit bridges in Henry County so that we would not have a congestion problem. My research and discussions with Georgia DOT officials, indicates that our elected officials just have not done their jobs of looking out for the welfare of Henry County residents.
      Other things have been added and the rules have become blurred making it possible for the Georgia road tax money to be diverted to other things based on the skill of the officials requesting and directing the use of the money along with other obstacles. Some of the obstacles are lawsuits by the Sierra Club along with other similar organizations, Federal judges, and EPA rules that stopped the widening of the bridge over I-75 at Hudson Bridge Road even though the funds had been allocated and the work approved.
      These organizations mistakenly believe that slowing down highway improvements reduces ozone pollution, which often causes a 20 minute trip to take forty minutes, or much more, due to congestion that would not exist if road improvements were done when needed. This slow down doubles and triples the ozone pollution problem yet they claim they are doing their slow downs to reduce the pollution problem. How ironic. Our elected officials need to get these obstacles corrected including the Federal judge's flawed decision to stop the necessary and urgent improvements.
      SPLOST money has already built or is building a huge number of improvements with $54,000,000 collected to date of the scheduled $60,000,000. The Courthouse expansion, jail, 2 additional senior citizen centers, libraries, numerous recreation areas, and numerous other buildings. The building program has also included numerous street improvements that should have been paid for with gasoline road tax money that we should have received but didn't. This does a good job of expanding buildings for the expanding population growth.
      If the roads and bridges that are currently congested had been widened and improved as and when needed, we would not have a congestion problem and would not have any need for extra money, impact fees or otherwise. The huge increase in real estate taxes produced by building new homes will handle the cost for operating the new buildings if the money is handled correctly.
      Or perhaps the lack of effort was a deliberate Republican goal to create some additional inflation/dollar devaluation by duping the Henry County residents to vote for impact fees. President Reagan deliberately created Impact Fees with his shell game tax cut in which he discontinued returning a portion of Federal taxes to the communities from which it was collected. He and other Republicans knew that the communities would have to find other means of revenue so that nationwide, communities were duped into commencing Impact Fees.
      Impact fees was a major part of the Reagan-Republican scheme in which President Reagan, in eight years, doubled the cost of building homes, tripled the Federal debt from one trillion to 3 trillion dollars, megadrupled the cost of hospital care, added approximately 250 billion dollars in annual interest payments on the Federal debt, two depressions, etc., etc. George Bush, Sr. labeled this "VOODOO ECONOMICS" until he joined the Reagan Voodoo team. Impact fees were a major factor in Reagan's scheme to megadruple Nixon's inflation/dollar devaluation explosion.
      Inflation in home prices has a triggering effect on inflation in other products and services. When home prices increase, everyone wants a pay raise so they can buy as much house as before the price increase. This causes price increases to maintain the same profit margin for the businesses as before the pay raises. Plus, many companies use the pay raise excuse to increase their profit margin percentage, thus magnifying the inflation effect. If communities nationwide are trying and succeeding in an effort to increase housing prices with impact fees on housing, an inflation movement similar to The Reagan inflation/dollar devaluation could commence.
      Part of the reasoning for impact fees was to slow down home building and the growth of Henry County. Further the reasoning was that only people moving into Henry County would be paying the impact fees and not people already living in Henry County. Both of these reasonings are incorrect.
      If impact fees in the amount of $2,800 are added to the cost of building homes, The price would have to be raised approximately $4,000 by the time construction loan cost, discount points, closing cost, sales cost, etc., are added. If the impact fee is $1,800, the home price increase would be almost $3,000. This would not reduce the growth in Henry County much, if any, it would simply mean that a home buyer would be cheated by having to accept a smaller home for the same price they could have purchased without the addition of impact fees. Based on the national average, most people move approximately every 5 years. This means that people already living in Henry County would also be cheated out of $4,000 or $3,000 when they purchase another new home in Henry County.
      Today, Henry County already has an impact fee for water in the amount of $1,065 and sewer in the amount of $2,900. If the subdivision has sewer service, the total impact fee is $3,965, which causes a home price increase of at least $5,000. If the impact fee of $2,800 is added, it will raise the price of homes another $4,000 making a total of $9,000 with a payment increase total of approximately $90 per month for 30 years home buying inflation penalty for impact fees or $32,400 in 30 years. This can not be justified when the congestion due to population increases could be more than paid for if we obtain our gasoline road tax money which we have already paid but have not received.
      The City of McDonough has an impact fee for water in the amount of $1,665.77 and sewer in the amount of $1.821.23, making a total impact fee of $3,487 which causes a home price increase of at least $4,800. The increases would be proportionate to the county increases.
      One misconception is that home builders cause the growth in Henry County which is just the opposite of reality. What really happens is that businesses expand and some move into Henry County. This creates additional jobs and causes people to move into the area which creates a demand for more homes. Builders build new homes when they perceive that a demand exists for the homes they build. No knowledgeable builder would build any new homes unless it appeared that the demand existed first.
      Another misconception is that the county or the municipality furnishes extensions of water and sewer mains and subdivision are done at taxpayer expense. This is just the opposite of what happens
.       The company that develops the lots, builds, installs water mains, installs sewer mains when appropriate, paves the streets, and does all of this at their own expense, then deeds the streets, water mains, and sewer mains with sewer taps (if sewer required) to the county or municipality free of charge. Additionally, the developer pays for sewer (when appropriate) and water main extensions to the new subdivision.
      The price of the developed lot includes all of these costs, which is why lot prices are so much higher than undeveloped land. The new homes add a huge amount to the tax receipts with a small amount of extra cost to the county or municipality.
      There were 3,386 single family building permits and 49 multi family permits in addition to business permits issued in Henry County in the year 2000. If all of these units were built in 2000, this will increase real estate tax, receipts including school tax, in the range of $8,000,000 annually. This increase in tax receipts will continue every year hereafter plus the growth in population each year.
      There is no way that the increased cost for the newcomers can amount to $8,000,000 per year plus the additional increase if Henry County government is properly managed. If we do our work correctly and start getting a reasonable portion of our gasoline road tax back for our roads, we can build and improve more than enough roads to avoid a congestion and have a surplus without additional impact fees.
      Here is another sneaker that no one has told you about. When the price of new homes in Henry County increase by $4,000 caused by impact fees, the Henry County tax appraisals are required to be adjusted according to the selling price of new homes. Therefore, current Henry County residents's home tax values will increase $4,000 and the real estate taxes will increase simultaneously. In that manner current residents in Henry County will commence paying extra taxes for impact fees that really do not have any justification.
      I moved to Albany in 1951 and most of the streets were unpaved. At the time Nixon was elected, metro Albany had grown to approximately 100,000 population from approximately 50,000 population and all of the streets had been paved. This growth was similar to Henry County growth except that it was in a small area instead of a very large county. The air base closed 5 times during that time thus losing 10,000 population each time the base closed and added back 10,000 each time the base re-opened. The only time we had a significant congestion problem was just before the second bridge was built across Flint River for US 19.
      I started building homes in Albany and Southwest Georgia in 1954, developed a few subdivisions, and built 956 homes, some of which were built in this area. In the city of Albany, the city furnished all utilities, including electricity, gas, water and sewer at an extremely low price due to no income tax. They bought electricity from Georgia Power and sold it to residents for one cent per kilowatt while Georgia Power charged residents 1.6 cents per kilowatt.
      The City of Albany built sewer treatment facilities and drilled new water wells as needed for the huge expansion it was experiencing at the time using the profits from furnishing extremely low cost utilities. There was virtually no real estate tax increases, or anything like SPLOST money before Nixon was elected. There were no impact fees for water or sewer until President Reagan created impact fees by diverting most of the Federal income tax money that had been previously returned to the communities from which it came for police and fire protection, hospital cost for indigents, and other government needs. Before the Nixon inflation/dollar devaluation agenda commenced and the Reagan inflation/dollar devaluation explosion and Federal debt explosion, a private room stay in the hospital cost about the same as a room with a kitchenette for a family stay at the beach.
      I became an expert on real world political economics because of the beatings I received as a result of political actions that cost me a considerable amount of money. For 15 years I was the largest volume home builder in Albany. However, I was never able to accumulate much money because each time I began to get ahead financially, a political action, mostly Republican presidential executive orders, would severely damage me financially. I examined these damages and hidden reasons for the political actions and learned to spot concealed schemes and the effects of these schemes.
      The Eisenhower Administration raised interest rates more than 50% on home loan including 4 to 8% discount points which FHA and VA would not allow as cost in their appraisals.
      When John Kennedy became president, he dropped interest rates 1/2 percent, discount points dropped to 2%, which caused the economy to surge upward. When handled correctly, this is a perfect example of what low interest rates will do for the economy and employment.
      President "I'm not a crook" Nixon's goal was to, and did, start a huge inflation/dollar devaluation. Early in his administration, he discontinued subsidizing small company oil well drilling. At that time oil was $4 per barrel and we were buying 10% of our oil from the mideast. At a Georgia Home Builder directors meeting, I recommended that we oppose this as an association because it was obvious to me that this was a disaster for oil prices and extremely inflationary but everyone at the Board meeting voted against my proposal saying that Nixon was saving us money
.       Shortly thereafter oil prices went to $40 per barrel, gasoline went to $1.35 per gallon, and we began buying 50% of our oil from the mideast. The mideast oil wells were partially owned by our large oil companies. At that time a semi skilled carpenter pay was $1.50 per hour and they had to work almost one hour for one gallon of gasoline. This was a whopping jolt of inflation/dollar devaluation and even worse for fixed income people.
      In Nixon's first term he put forth an extreme effort to build FHA 235 subsidized housing for the poor with the objective of creating a shortage in building material. Shortly thereafter, he started wage and price controls, lying to the public by saying he was trying to prevent inflation. In his campaign for re-election, Nixon lied about his efforts to create inflation/dollar devaluation and admitted it in the same sentence, in one speech, he said, "I'm doing everything possible to prevent inflation but aren't you glad you are making more money now than 4 years ago."
      Immediately upon re-inauguration for his second term, he announced that he was canceling the 235 program and nothing under construction or in the pipe line would receive 235 funds unless a firm commitment was already issued. This executive order cost me $300,000 because I was building homes all over southwest Georgia and had money invested in the 235 effort which could no longer be financed for low income buyers. Soon after terminating the 235 program, Nixon raised interest rates which raised the cost of all products and services then terminated the wage and price controls. Construction cost on jobs I had in construction progress and under contract increased $33,000 in 30 days.
      Soon after Nixon resigned to prevent being fired for his Watergate Burglary, Gerald Ford who had been appointed by Nixon to succeed him and pardon him, ordered the Real Estate Investment Trusts (REIT) to call all of their loans, even though the loans were mostly sound loans, and simultaneously reduced the National money supply (Tight Money). This malicious loan "Call" destroyed the collateral on construction in progress which was either intentional or extremely stupid. This intentional or stupid act actually caused good loans to become bad loans and was the major cause of a huge number of Savings and Loan companies nationwide to be destroyed by good loans gone bad thus costing taxpayers many billions of dollars unnecessarily.
      I was developing a 113 lot subdivision in a black prestigious neighborhood using a development loan from a mortgage company that had about $95,000,000 borrowed from REIT's including my development money. They filed a Chapter 10 bankruptcy the same day the paving materials were delivered to my subdivision to complete my lot development, thus preventing further work.
      My subdivision would have been completed within 2 or 3 days if Ford had not issued his executive order requiring REIT's to call their loans. At that time banks in Albany would not lend any money on a development for black people, even though I had a waiting list of home buyers for the subdivision. This killed this development costing me $400,000 and bankrupted numerous companies nationwide in the housing industry as well as creating much unemployment nationwide.
      Immediately after President Reagan was inaugurated, he cancelled an apartment subsidy loan program for low income people. I had a sale processing on an apartment site I owned that needed that particular FHA loan program for the construction of the apartments. Reagan's cancellation killed the sale and cost me $195,000 plus a considerable investment later in an unsuccessful effort to re-sale the apartment site.
      A careful examination of the aforesaid devastating events and others not mentioned gave me an education and insight into real world political economics not available in economic textbooks. I developed a keen knack for determining the reasoning behind political scams and how to spot them. President Roosevelt said "Everything that happens in politics was planned that way by someone, or group, who had the power to make it happen".
      Impact fees are a national Republican scheme to create more inflation/dollar devaluation for which many Democrats have been duped into supporting. Incidentally, Reagan removed housing from the Consumer Price Index so the public would not realize what he had done to inflation in housing. The bottom line is that impact fees for housing is an inflationary/dollar devaluation wrong and sneaky way to increase taxes on everyone for things we have already paid for otherwise, plus additional impact fees would be a terrible mistake. The current housing impact fees are for water and sewer facilities despite the fact that the lot developer donates all of this to the County or Municipality free of charge and no cost to the city or county or taxpayers . It is amazing that government cost has become so skewed and out of line with other costs.
      If we are trying to remedy corruption with impact fees, instead of penalizing home buyers both current residents and new comers, plus people on fixed incomes, we should instead resort to investigating and exposing the corruption gang, then use every legal means to remove then from office and prosecute all of the perpetrators. If you would like to learn who some of the corrupters are in Henry County and how they operate, go to www.rojego.com on the internet and read my book Is This POLITICS & JUDICIAL CORRUPTION In Henry County.
      It is time that we require government to get back in line with its cost and provide necessary road work with the money we have already paid for these services. Last year, we paid $26,000,000 in road work taxes for road work in Henry County and got back peanuts, unbelievable but true. Letters, phone calls, and the ballot box is a good way to remedy these unnecessary problems.
      The Democratic Party is the party of the people, by the people, and for the people at large including full employment at livable incomes. The Republican Party, the Greed Party, is the party of the rich, by the rich, and for the rich who trick some Democrats into supporting their agenda and trickle down a few crumbs to Democrats.
      Unfortunately, Senator Zell Miller was persuaded to mistakenly support Bush's inflation/dollar devaluation scheme cutting taxes primarily for the rich and increasing spending to follow in the devastating footsteps of President Reagan's economic fiasco of inflation/dollar devaluation and Federal debt explosion. And, even worse, Senator Cleland was finally persuaded to mistakenly vote for the Bush tax cut flim-flam scheme, thus joining a small number of Democrats who were also persuaded to mistakenly vote for Bush's scheme.
      Why don't you send a copy of this editorial to both Senator Cleland and Senator Miller, and all U.S. Senators & U.S. Representatives, and request that they do not support or vote for any Bush flim-flam schemes.