Special Taxation Districts to Handle Infrastructure Maintenance

One of the ideas  policy makers discuss to address the problems with funding storm water system maintenance is to create special tax districts.  These districts would then impose assessments by geographic watershed areas to fund special projects including storm water system maintenance.   By adopting and implementing the districts on a local scale, local governments would hope to avoid the problems of approving and earmarking unpopular tax increases across the whole jurisdiction.   Special tax districts could make the adoption and implementation of more taxes politically acceptable.  The district could be used to justify the tax by area.



One problem associated with the districts is they still require additional taxes.  Commercial and industrial developments without adequate detention and retention structures also generate a disproportionate amount of storm water.  Local governments have the incentive to grant special tax exemptions to lure industry.  The effect of implementing such exemptions could disproportionately cast the burden of funding system maintenance on other tax payers indirectly.

Other problems could include the constitutionality of disproportionate taxation and the procedures for authorizing  special tax districts.  However, the method may be a necessary tool to address the huge demands for public infrastructure funding in the future.   These questions constantly arise in our practice at Teague & Zeliff, LLC.