Local governments could raise untold millions of dollars for road projects under a provision Gov. Tim Kaine inserted into the transportation-funding bill that became law last week.
The measure, which generates Virginia’s first significant batch of new revenue for transportation since 1986, allows localities to impose impact fees on new commercial and residential developments. The bill gives the impact-fee authorityto localities meeting specific population-growth qualifications, which the Northern Virginia jurisdictions do.
The fees would cover the costs for new roads to handle traffic created by the developments. Without the fees, localities would have to pay for the new infrastructure. Under the new law allows the fees could apply to any development that is built, even if it conforms with existing zoning classifications.
“This is a sweet deal for local governments,” Del. David Albo, R-Springfield, said. “No one has really calculated how much this will bring in. It could be an immense amount of money.”
Albo introduced legislation last year that would have allowed Northern Virginia localities to impose impact fees, but the provision was dropped from the omnibus bill legislators approved in February because some lawmakers opposed the idea. Kaine, a former mayor of Richmond, added the fees into the bill in March when he proposed numerous amendments, which the General Assembly accepted last
week.
“It is a powerful tool for localities that choose to use it,” Kaine spokesman Kevin Hall said. “There is an obvious connection between development and transportation.”
The Home Builders Association of Virginia unsuccessfully sought to have the fees stricken from the bill last week. Developers are upset the governor added the fees into the bill late in the legislative process when there was no time for public comment on the proposal. They are especially concerned because the bill does not strictly limit how much local governments can charge, which they argue will increase home prices.
The only restriction on localities is that they must charge only what they need to pay for new roads or improvements around the development. The funds cannot be used for roads in other areas or to pay for government programs.
