Impact Fees

What would our economy be like if all businesses operated like El Paso developers and the El Paso Water Utilities Public Service Board (PSB)? Unlike other business, these developers are unable to compete in a free market. Under normal circumstances, market forces would have replaced these developers with more efficient developers who have the talent and efficiency to compete.

But, although these developers are not efficient at developing property for new homes, they are very efficient at milking the PSB. These developers have received over $200 Million in subsidies from the PSB in the last ten years. The PSB has only one source of funds, water bills. So every man, woman and child in El Paso is supporting these rich and inefficient developers.

Subsidies have become the time honored way of doing things at the PSB. Developers have become rich with the aid of subsidies funded by two hundred thousand citizens living in poverty.

These rich inefficient developers have no shame. Now they are crying foul because the city council imposed a $1,500 impact fee on new homes to recover some of the money that the PSB is giving away. The developers say that the impact fee is unfair. They can't compete without subsidies and they won't allow market forces to replace them with developers who can. They feel entitled to go on taking money from the poor to support their business.

The PSB has spent $200 Million on growth and they plan to spend another $340 Million in the next ten years. Then they will spend $630 Million to import water from Hudpseth County. The total cost of growth will be $1.17 Billion. If the city council collects an impact fee of $2,900 per home, it will take 780,000 new homes to recover the $1.17 Billion total. The water company connected 3,540 new homes last year. At that rate it will take 220 years for growth to pay for growth. In the mean time, water customers are forced to pay for growth.