Home Builders v. Mesa (cultural impact fee case)

Posted on September 05, 2007 | Type: Case
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Case background:

Under Arizona law and the federal Constitution, building fees are supposed to be limited to the costs for “necessary” services—such as roads and sewers—that new residential developments impose upon a community. But many Arizona cities have begun looking at impact fees as new revenue sources, using them to fund unrelated facilities. Across the Valley, impact fees are soaring even as homeowners struggle to pay their mortgages and one of Arizona’s most important industries is on the ropes.

As an initial foray against excessive impact fees, the liberty watchdog Goldwater Institute has challenged the legality of Mesa’s “cultural impact fee” which imposes a tax on new construction to pay for public facilities unrelated to the impact of new development, such as museums. The construction of new homes can negatively impact existing sewage systems or roads, but negatively impact existing museums?

Mesa’s cultural impact fee, which has increased from $59 per home in 1998 to $221 today, is an egregious abuse of impact fees. Cultural facilities are nice, but they certainly aren’t “necessary” public services. Furthermore, the particular facilities for which these fees are collected have already been built, and the city has no plans to construct new facilities as a consequence of new residential development. The cultural impact fee has simply become a tool for city governments to levy excessive taxes on Arizonans without representation.

A judge ruled in favor of Mesa in the cultural impact fee case, and the Goldwater Institute filed an appeal. On November 4, 2010 the appeals court upheld the lower court's ruling. The Goldwater Institute is considering an appeal.

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The Stakes:

  • Stopping excessive taxes on residents who cannot vote for or against them
  • Restoring constitutionally limited impact taxes

Case Timeline:

  • September 5, 2007: Case filed with the Maricopa Superior County Court.
  • November 9, 2007:  Hearing scheduled with Judge Rayes, 1:30 PM at 101 W. Jefferson, East Court Building in courtroom 411.
  • December 10, 2007: Judge Rayes denies Mesa's motion to dismiss.
  • June 12, 2009: 10:00 a.m.  Oral argument before Hon. Douglas L. Rayes at 101 W. Jefferson, Courtroom 411.
  • July 14, 2009: Judge Rayes rules in favor of the City of Mesa.
  • July 16, 2009: The Goldwater Institute appeals Judge Rayes' decision.
  • June 23, 2010: 2 p.m. Oral arguments at Court of Appeals, Courtroom #1, 1501 W. Washington Street.
  • November 4, 2010: Court of Appeals upholds lower court's decision.

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