CORINTH — Residents could see an increase in the amount of taxes they pay in Corinth after council officials voted to give new developers a break in hopes of luring new development.
Council members last week voted unanimously in favor of reducing the roadway impact fees on new developments, saying that the city’s prior rate was too high and likely deterred growth.
Officials said they hope the decision will lure commercial and retail developers by adding an incentive that reduces the developers’ cost to build within city limits.
“It promotes growth, and we are pro-growth,” Mayor Paul Ruggiere said. “Corinth is a prime place for growth and the interest we’ve been seeing in the area is a strong indication of that.”
Impact fees are assessed to new developments to help offset their potential impact on the infrastructure during a 10-year period.
During the March 6 meeting, the council voted to reduce its roadway impact rate from 62 percent to 30 percent. The fee is based on the estimated impact by the development on local roadways. Officials said the prior rate was high compared to most cities of similar size.
City projections showed the city was on pace to collect nearly $10 million at the prior rate, but now, if projections remain accurate, the city could collect about $5 million. City Council members referred to the reduction as an aggressive move they hope will pay off.
The city’s Capital Improvement Advisory Committee had recommended keeping the roadway impact fee the same.
“If the roadway impact fees are reduced, it will shift the cost of providing additional capacity from new residential and commercial development to the existing Corinth taxpayers,” committee Chairman Joe Sturm wrote in a statement to the council before Thursday’s meeting.
Some council members said they recognized reducing the fee would probably create an additional tax for residents, but they also said the decision will lead to a lower tax burden in the future.
City staff, however, said any tax increase would probably be minimal.
“And on the flip side, if you bring a business in, then you get the sales tax and property values,” council member Randy Gibbons said.
City Manager Rick Chaffin said Corinth’s revenue relies significantly on the property taxes of residents. He said the city’s ultimate goal is to grow the retail and commercial tax base to lift the tax burden from residents.
JOHN D. HARDEN can be reached at 940-566-6882 and via Twitter at @JDHarden.