Senate committee hears debate on using development impact fees to pay for new school construction

Senators on a Georgia Senate committee heard testimony and public comment on Senate Bill 38 on day 12 of the legislative session, a proposal to let high-growth school systems levy development impact fees to pay for new school construction. The sponsor, Senator Dolezal, framed the measure as a mechanism to require new development to pay a pro rata share of the infrastructure costs it creates rather than placing those costs on existing homeowners.

The bill would add schools to the list of capital items that can be funded under the state's Development Impact Fee Act and would limit impact fees for schools to districts the bill defines as "high growth." Under the bill's triggers discussed in committee, a high-growth school system would be one that has experienced 20% or more population growth over the preceding 10 years and has incurred $250,000,000 or more in expenditures for new educational facilities. "You need to argue, from my perspective, why I need to be paying to build new schools for the new neighborhood that's going in down the street," sponsor Senator Dolezal said in committee.

The Georgia School Boards Association, represented by Stephanie Tanner, supported SB 38 at the hearing. Tanner told the committee that rapid economic growth increases demand on school systems and that school districts need additional tools to respond to that growth. "Our members are looking forward to the prospects of paving the way for high-growth school districts to be able to use development impact fees for educational facilities," Tanner said.

Trade groups representing builders and rental housing opposed the proposal. Austin Hackney of the Home Builders Association of Georgia warned the committee that adding new impact fees could worsen housing affordability and cited a South Carolina example in which school board impact fees exceeded $18,000 per single-family home. "For every $1,000 increase in the price of a home, an additional 4,687 households cannot afford that house," Hackney said. Hayden Stanley, representing the Apartment Association, argued that the proposal would shift costs to renters and commercial property owners who do not receive homestead or senior tax protections: "This might be a one-pot deal on a development, but it's not a one-pot deal on those who choose to rent their homes."

Committee members asked for clarifications on how SB 38 would operate alongside existing local funding tools. Senators discussed ESPLOST (Education Special Purpose Local Option Sales Tax), bond financing, and district reserves as existing mechanisms districts use to pay for new facilities. Sponsor Dolezal noted that in Forsyth County'which he identified as the only county that clearly met the bill's thresholds'school construction costs have been paid via bond debt and, recently, by cash reserves. He said Forsyth's road impact fee previously was $1,900 and had recently increased, and he estimated the typical single-family sale price in parts of Forsyth is closer to $700,000. Dolezal also emphasized statutory safeguards already in the Development Impact Fee Act: impact fees are capped by the pro rata study, must be used in the service area where collected and for the purpose collected, and must be refunded if not used within seven years. "Show me another tax that we do that with," he said.

Committee members raised constitutional and legal questions. Witnesses cited recent court guidance on the requirements for impact fees to show an essential nexus and rough proportionality between the fee and the burden created by the development. Austin Hackney referenced a court decision he called "Sheets v. County of El Dorado" to underscore that courts require a clear nexus and proportionality; the committee discussion noted the importance of how a fee study allocates students per new housing unit. Members also asked whether the constitutional amendment (SR 52) discussed alongside SB 38 would make the change statewide; Dolezal said a constitutional amendment alone would not have effect without enabling legislation and that the current enabling language would restrict levies to high-growth districts.

The committee did not take a vote on SB 38. The sponsor said he would bring a committee substitute on a different bill (SB 28) at a future early-morning meeting and that SB 38 and SR 52 were under discussion today as a hearing only. Public commenters and several senators asked the sponsor and staff to provide additional data, including county-by-county expenditure and growth figures, and some senators said they were open to adjusting the bill's numeric thresholds. "If we think 20% needs to change, if we think the $250 needs to change, I'm happy to put that on the table," Dolezal said.

Votes at the committee's opening housekeeping were recorded: the committee unanimously adopted the standing rules for the session by voice vote. The committee also agreed to table Senate Bill 28 so the sponsor and the lieutenant governor's office can complete a committee substitute; that motion was announced by the chair and accepted without further debate.

The hearing record includes the following named speakers: sponsor Senator Dolezal; committee chair (referred to in the hearing as Chairman Beach); Stephanie Tanner (Georgia School Boards Association); Austin Hackney (Home Builders Association of Georgia); Hayden Stanley (Apartment Association); and multiple senators who asked questions, including Senators Watson, Ginn, Hufstetler, Mallon, Dixon, Summers, McLaurin and Hutch. No formal committee vote was taken on SB 38 or SR 52 during this session.

The committee recessed without action on SB 38; the sponsor indicated he will return with further data and possible metric adjustments at a later meeting.