Raleigh, N.C. — The state Senate gave final approval Monday night to repealing Orange County's power to impose impact fees on development to pay for schools and other public facilities.
House Bill 406 takes effect immediately. It is a local bill, so it's not subject to the governor's approval or veto.
Sen. Tommy Tucker, R-Union, a former county commissioner, called the county's steep increases in the fees "egregious."
Tucker said the fees on multi-family housing had been raised 25 percent in 2009, another 25 percent in 2010 and another 20 percent in 2011-12.
The biggest increase came at the end of 2016, he said, citing an apartment project that was assessed an impact fee of $302,000 in November 2016. After the county approved another increase, that fee skyrocketed to $1,593,000.
After House Bill 406 was filed, Orange County commissioners relented and reversed the increase for that project. They came to the legislature several times to plead with lawmakers not to repeal the fee, saying it would leave a hole in the county budget and would require them to raise property taxes countywide.
"Orange County should pay for their schools as 98 other counties do, through property taxes and budget management," Tucker argued. "They’ve gotten out of line. They’ve really brought attention to themselves. Either no counties should have impact fees or all counties should have impact fees. But Orange County needs to have its impact fee repealed – and repealed now."
Sen. Valerie Foushee, D-Orange, opposes the repeal. She was unable to be at Monday night's debate. Sen. Floyd McKissick, D-Durham, offered her argument in her place, saying the legislation "targets" Orange County.
"A very modest amount that would go toward public facilities is not unreasonable," McKissick said, warning that the repeal would have "a profound and substantial impact upon their local government budget."
He also pointed out that another measure under consideration would freeze all local impact fees during a year-long study.
"We should wait and allow the study to move forward," he urged. "If this was your county and your district, would you want to be singled out?"
"If that were my county or your county, I would say it’s time to stop that process," answered Sen. Jerry Tillman, R-Randolph.
The vote was 35-13, mostly along party lines, with one Republican, Sen. John Alexander, R-Wake, voting with Democrats against the repeal, and one Democrat, Sen. Joel Ford, D-Mecklenburg, voting with Republicans for it.