Home Builders Challenge Dorchester’s School Impact Fee
By Jenny Peterson, Summerville Journal Scene

Legal action has been taken against the Dorchester School District 2 over recently-passed legislation that allows the school district to charge developers $2,500 on new homes to pay for the construction of new schools.

The Home Builders Association of South Carolina and the Charleston-Trident Home Builders Association have filed the legal action in which they challenge the legality of the impact fee legislation, according to Phillip Ford, executive vice president of the Charleston-Trident Home Builders Association.

The Home Builders Association of South Carolina is a statewide trade association representing more than 4,500 member companies. The Charleston-Trident Home Builders Association is affiliated with the state home builders association and represents more than 450 members companies.

State Sen. Mike Rose (R-Summerville) sponsored the impact fee legislation earlier this year, aiming to alleviate overcrowding at the rapidly-growing school district. The legislation was the first of its kind in the state. Superintendent Joe Pye has stated that all school in the district are currently at or over capacity. The district has 22,000 students.

To date, the school district has collected $122,000 in impact fees for new schools, according to Sheryle Young with the Dorchester County Administrator’s office. Impact fees are distributed through the county on a monthly basis, with 1 percent collected by the county for administrative purposes, Young said.

The builders’ group is arguing that the impact fee bill is “special legislation,” and therefore illegal.

“It gives only one school district (in the state) the authority to collect the tax,” said Ford. “The state’s constitution is very clear in prohibiting special legislation that applies to only one county, city, or school district.”

Rose, however, disagrees.

He said he uncovered state Supreme Court rulings exempting school districts from the “special legislation” rule. He contends that counties and municipalities cannot pass “special legislation” to collect fees, but school districts can.

Ford said the builders’ attorneys did not find wording in the state constitution allowing for special legislation in school districts.

“I didn’t see anything in the constitution where it clearly says the difference between a municipality and school district (in terms of special legislation),” Ford said.

Fred Gertz, the attorney representing the home builders, did not return a call for comment Tuesday.

Rose said the lawsuit is an example of homebuilders skirting away from the responsibility of paying for new schools.

“Their problem is that they want all the other homeowners that already live in Dorchester County to pay for the new schools,” Rose said. “They don’t want to pay, they want to maximize their profits. It’s greed. G-R-E-E-D.”

Rose noted that another recently-passed bill, which he did not vote in favor of, allows developers to be exempt from paying property taxes on unoccupied homes. Rose said that results in free police and fire protection.

He compared that legislation to the lawsuit and said both result in builders pushing the financial burden onto current homeowners.

“The bottom line is home builders are trying to profit by trying to milk other residents,” Rose said.

Charlton deSaussure, attorney for Dorchester District 2 schools, said he had not seen the lawsuit, but seemed confident that the school board did research on court precedents before passing the resolution to collect impact fees.

“We followed closely the legislation adopted by the General Assembly and we also used as a model, York County School District, which has had an impact fee for many years, which had been challenged and upheld,” deSaussure said. “We also reviewed the litigation, which was successfully defended by the town of Summerville. The board, when they were considering this, was mindful of the fact that litigation might be brought and, independent of that, (wanted) to do it correctly whether litigation was brought.”

Ford said the builders’ group feels the impact fee bill is not fair to all residents.

“Say that I’m buying a new home and have no kids, why do I pay $2,500 when other people who (have lived) in Dorchester County with two kids didn’t have to pay?”

Ford used several other examples of what he said is an inequitable system to pay for new schools.

“Say I’ve been paying taxes for 10 years and now I buy a new home; all of sudden I have to pay $2,500. There are some inequities in how impact fees are used for schools,” Ford said.

“We believe it is important to ensure that our public schools have adequate funding to meet their needs and mandates, but we also believe that those funds should come to them from legal sources,” Mark Nix, executive director of the Home Builders Association of South Carolina, said in a press release.

Ford added, “It is unfortunate that we have to take this action, but it is important that all South Carolinians challenge their government when they believe their government has made a mistake.”