Impact Fees and Employment Growth.

Local jurisdictions across the country continue to adopt alternative financing options, although the effects of these remain uncertain. There are two views of impact fees: (a) an old view, that fees are a tax on development increasing prices and reducing quantity and (b) a new view, that fees provide services and reduce future taxes, thus increasing demand and prices. The research presented in this study, based on data from Florida counties, finds that the relationship between fees on commercial development and fees on employment differs across different categories of economic activity. The use of fees is positively related to service-sector employment growth and negatively related to manufacturing employment growth. This result suggests that different sectors realize different levels of benefits from infrastructure provided through fee revenue and that policy decisions based on total employment may suffer from overaggregations and lead to unintended consequences. [ABSTRACT FROM AUTHOR]