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FAIRNESS OF ORANGE COUNTY AND HILLSBOROUGH COUNTY
SCHOOL IMPACT FEES
STEPHEN FULTON SHAW
A DISSERTATION PRESENTED TO THE GRADUATE SCHOOL
OF THE UNIVERSITY OF FLORIDA IN PARTIAL FULFILLMENT
OF THE REQUIREMENTS FOR THE DEGREE OF
DOCTOR OF PHILOSOPHY
UNIVERSITY OF FLORIDA
Stephen Fulton Shaw
This paper is dedicated to those affected by economic injustice. For the deserved denied
opportunity as well as the prudent taxed by the profligate.
I thank my wife Melanie, my Mom, my sister and brother, and my larger family and
friends who have encouraged and assisted me always. I remember wanting to quit this journey
back in law school and Mom saying, "You did not think it would be easy did you?" I want to
also put in a word for Dad, I know that he would have loved to be here with all of us to see this
I further thank Drs. James Nicholas and Raymond Issa and my committee for their deep
expertise, creative ideas and unselfish mission to educate. I will not forget the day that James
Nicholas and Raymond Issa told me to stop thinking like a student and start thinking like a
scientist, philosopher and professor: that was the beginning of the end of this paper and a spark
within me to confront and attempt to solve real problems that face people, communities and
Ultimately, I give credit to Jesus Christ.
TABLE OF CONTENTS
A C K N O W L E D G M EN T S ........................... .................. ................................................4
LIST OF TABLES ............... ...... ...... ........................ 7
LIST OF FIGURES ............................... ... ...... ... ................. .8
A B STR A C T ................................................. ..................................... .. 9
1 INTRODUCTION ............................................... ........................... 11
Statement of the Problem, Methodology and Objective...........................................12
Public Education Finance in the United States and Florida ......................................13
The Philosophical Context for Public Education Finance...................................14
The Historical Context of Public Education Finance in the United States..........17
The Historical Context of Public Education Finance in Florida .........................21
2 THE SCHOOL IMPACT FEE ............................................................................27
The Em ergence of the Im pact Fee........................................................... ... .......... 29
Im p act F ee F orm u nation ................................................................. ....................3 1
Consum ption Based Im pact Fees ............................................. ............... 32
Improvements Based Impact Fees .............................................. ...............33
Differences betw een Fees............... ................................................ ...............34
The Fee Formula and Basic Implementation Considerations..............................35
Impact Fee Credits................... .. .............. ....... ......36
School Im pact Fees ................................ .... .... .. .............. ........ .... 39
School Impact Fees as an Urban Planning Tool...............................................43
School Impact Fees in Other States ...................................... ...............45
S u m m ary ............................................................................... 4 6
3 IM PA C T FE E F A IR N E SS .............................................................. .....................51
Orange County and Hillsborough County Impact Fees................. ....... ...........52
Orange County, FL Impact Fee Ordinance ............................... ................52
Hillsborough County, FL Impact Fee Ordinance...........................................54
Philosophies and Disciplines on Fairness........................................ ............... 56
P lato on F airn ess................................................................................ ..... 57
Plato and School Im pact Fees.................................................... .............. .. 58
A ristotle on F airness........... ..... ..................................................... .... .. .... .. 60
A ristotle and School Im pact Fees.............................................. .................. 61
Social Contract Theorists on Fairness .... .......... ....................................... 63
T hom as H obbes............ ......................................................... .... .. ..... 63
Jo h n L o c k e ............................................................................................. 6 4
Im m anuel K ant ... .... ....... .............. ........ .... .................. .............. .. 65
Social Contract Theory and School Impact Fees .........................................66
U tilitarianism on F airness......................................................... .....................69
Jerem y Bentham ...... .. ....... .... .... ...... ...... .... .. ................ 69
John Stuart M ill ........ .... ...... .... ........... .. .. ............ 70
Utilitarianism and School Impact Fees............... ........ ...... ... ........... 71
Contemporary Political Philosophers on Fairness.......................................72
Jo h n R aw ls ......................................................................7 2
Rawls and impact fees ............... ............... ................... 74
R obert N ozick ......................... .. .................... ......... ........... 75
Courts of Equity on Fairness .. ............................................................. ...............77
Concepts of Fairness in the Courts of Equity ....... ......................................77
Courts of Equity and Impact Fees .............................. ...............79
P sychology on F airness ............................................... ............................ 80
Piaget's develop ent of fairness................................. ............ ............. 80
Kohlberg's development of fairness ........................ ...............81
Psychology and Im pact Fees ........................................ .......................... 82
Sociology on F airness........... ...... ............................ ................ .. .... ..... .. 83
G am e-theory in social science.................. ... ..... ....... ............... .... 83
Game-theory application of rational egoism and Social Darwinism ...........84
Sociology and Im pact Fees............................. .......................... ................86
Judeo-Christian Theology on Fairness ......................................................... 87
The influence of Judeo-Christian theology in American politics ................88
Hebrew Pentateuch and Christian Old Testament on fairness .....................88
Jesus on fairness ...................... ................................ ............... 88
Judeo-Christian Theology and Impact Fees ................................................89
Su m m ary ............. .................................................................................... 9 0
4 SUMMARY AND CONCLUSION .................................... ......... ......................93
C conclusion ............................................................................................... 96
L im station s ............. ...................................................................................... 9 7
D A T A ............. ..... ............. .......................................................................1 0 0
LIST O F R EFEREN CE S ... ... .............................................................. ............... 101
BIOGRAPHICAL SKETCH ......... .. ................. ......... .... ....................... 107
LIST OF TABLES
2-1. Sources of state and local government revenues1992 and 2002.............................48
2-2. Sources of state and local government revenues per capital 1992 and 2002..............48
2-3. Intergovernmental revenues from state per capital 1992 and 2002............................49
3-1. Philosophy and discipline m atrix. ........................................ ......................... 91
LIST OF FIGURES
1-1. Floridian's perception of spending of tax dollars on public schools......................25
1-2 Floridian's perception of the degree of spending on public schools......................26
2-1. Florida's population 1910-2010 ......................... ................ .. ......................47
2-2. Reported impact fees by government type, fiscal years 1993-2004.........................49
2-3 Intergovernmental coordination of impact fees.. .....................................................50
3-1 Zone of impact fee fairness in the public school finance continuum....................91
4-1. Orange County's fee on the public school finance continuum. ............................99
4-2. Hillsborough County's fee on the public school finance continuum.....................99
4-3. Average Florida school impact fee on the school finance continuum. ..................99
Abstract of Dissertation Presented to the Graduate School
of the University of Florida in Partial Fulfillment of the
Requirements for the Degree of Doctor of Philosophy
FAIRNESS OF ORANGE COUNTY
AND HILLSBOROUGH COUNTY SCHOOL IMPACT FEES
Stephen Fulton Shaw
Chair: James C. Nicholas
Cochair: R. Raymond Issa
Major Department: Design, Construction, and Planning
Impact fees are a matter of increasing fiscal importance for Florida counties and school
districts within Florida counties. School impact fees are a charge placed upon new residential
development to cover the county's cost of additional required school infrastructure necessitated
by school-aged population growth. With shrinking public school funds from traditional sources
and increasing school-aged population growth, counties are under increasing pressure to use
school impact fees as a means for funding new school construction.
There exists rich literature regarding the legality of impact fees. Lacking, however is
scholarship addressing the fundamental fairness of impact fees. Hence, the fundamental fairness
of the fees remains unclear and the fees continue to be a source of much controversy.
This dissertation will first discuss the evolution of school impact fees in Florida and the
methodology of establishing school impact fees. Thereafter, philosophy, ethics, courts of equity,
psychology, social science, and Judeo-Christian theology will be surveyed to determine
fundamental concepts of fairness from which to analyze the fairness of school impact fees. The
objective of this dissertation is to determine whether Orange County and the Hillsborough
County school impact fees are fair. When these school impact fees were analyzed against
philosophic and disciplinary ideas on fairness, Orange County's $7,000 fee on single family
homes was determined fair while Hillsborough County's fee of $195.95 could not be determined
Impact fees are a matter of increasing fiscal importance for Florida counties and school
districts within Florida counties. In 2004, impact fee collections in Florida were reported as
$1,182,450,641, with $510,833,648 going to school districts.' To put impact fees in perspective,
all of the presently enacted Florida local option motor fuel taxes raised only $732 million, 60%
of which is raised by impact fees. Impact fees can be seen as costs of development, which they
are, but they are also an important source of capital improvement funding. Florida and its local
governments have been challenged in coping with the extent of development that has occurred
and is projected to continue. Impact fees are one means of meeting the needs of new
While of increasing fiscal importance, however, impact fees are not without controversy.
On the one hand, the majority of Floridians believe that public money is being spent efficiently
on public schools and that public schools are under-funded.2 As shown in Figure 1-1, a majority
of Floridians believe that public school officials are spending taxpayer's money somewhat
effectively or very effectively. Figure 1-2 shows that 81% of Floridians believe that the amount
of money spent on public schools is either about right or too low with 58% saying that the
spending is too low.
Further, in 2002, Floridians passed Constitutional Amendment Nine requiring smaller class
sizes in public schools. It is estimated that the construction cost required to implement
Amendment Nine is $9.3 billion over a period of 8 years or $1,371.67 each year for every
1 See Julian C. Jurgensmeyer, Clancey Mullen, James C. Nicholas, Tyson Smith, Gregory T. Stewart, Bob Wallace,
and Randy Young, Impact Fee in Florida: Their Evolution, Methodology, Current Issues and Comparisons with
other States (White paper prepared for the Florida City and County Management Association, October 2005).
2 See Greg Forster and Susan Schuler, Florida's Opinion on K-12 Public Education Spending (a poll conducted on
behalf of the Milton and Rose D. Freidman Foundation for Educational Choice, January 24, 2006).
Florida household for the same period. Accordingly, Floridians believe that their public schools
are operating efficiently and that they believe that more needs to be spent on public schools and
public school infrastructure. Regarding impact fees specifically, 68% of Floridians believe that
new housing developments should pay impact fees for schools and other government
On the other hand, many developers, landowners and homebuilders believe that school
impact fees are not fair. A recent Florida Supreme Court case highlighted the school impact fee
opponents' claim of unfairness. Developers who paid impact fees on their newly built homes in a
community that permanently prohibits school-aged children claimed that the school impact fees
were unfair because their development produced no increase of students.4 Therefore, while a
majority of Floridians support school impact fees, there exists the likelihood for ongoing
controversy and the ultimate question of the fairness of school impact fees.
Statement of the Problem, Methodology and Objective
Local governments are under increasing pressure to use school impact fees as a means for
funding new school construction. Rich literature exists regarding the legality of impact fees.
Lacking, however is scholarship addressing the fundamental fairness of impact fees. In the
broader sense, John Friedmann explored the influence of philosophy on planning and argued that
planning itself is the application of fairness concepts developed from various philosophies and
disciplines.5 However, inquiry into the fundamental fairness of impact fees as a specific planning
3 See Executive Summary, NPG Florida Opinion Poll on Population, Growth, Development, Immigration and
Sprawl 1999 (a poll conducted by Negative Population Growth, September 23-27, 1999).
4 See Volusia County v. Aberdeen at Ormond Beach, LP, 760 So.2d 126 (2000).
5 See John Friedmann, Planning in the Public Domain: From Knowledge to Action (1987) (tracing the roots of
planning as an application of fairness. Friedmann notes that Saint-Simon (1760-1825) is credited as an early
proponent of planning based upon scientific principles and not the rule of men. He argued that scientific principles
of planning (found in Philosophers such as Kant) are much more likely to create a meritocracy and meritocracies are
mechanism is absent. In this absence, the fundamental fairness of the fees remains unclear and
the fees continue to be a source of much controversy.
The evolution of school impact fees in Florida will be discussed. Thereafter, philosophy,
ethics, courts of equity, psychology, social science, and Judeo-Christian theology will be
surveyed to determine fundamental concepts of fairness from which to analyze the fairness of
school impact fees. The objective is to determine if the Orange County and Hillsborough County
school impact fees are fair.
Public Education Finance in the United States and Florida
Public finance for formal education is a relatively new phenomenon. Prior to the age of
public finance for education, the education of children was seen as a duty of parents. British legal
philosopher Blackstone, whose Commentaries (1723-1780) were highly influential in the
American legal and government system, said that parents' duty to educate children was self-
evident and by far a parent's greatest duty to his or her children. Blackstone expressed confusion
fair. Thus, planning can bring fairness. August Comte (1798-1857), as a pedagogue of Saint-Simon argued for
planning as an application of fairness because planners could be separated from administrators. Therefore, planners
could make plans that are fair without the pressure to alter plans to fit the desires of any particular constituency. This
view is closely connected to Kant's Categorical Imperative and Rawls' Original Position discussed later. Friedmann
also identifies four paradigms in which planning applies fairness. The first is planning as social reform using a
scientific paradigm to inform and limit purely political decisionmaking. Karl Mannheim (1893-1947) originated this
concept of planning in his 1929 book, Wissenschaftliche-Politik. The second is planning as policy analysis based
upon the work of Herbert Simon (1916-2001) on administrative behavior. Simon studied how large organizations
might make better decisions using a "bounded rationality" that puts logical and fairness constraints upon individual
decsionmakers in the context of large organizations (i.e. governments, corporations.) The third is social learning of
which John Dewey (1859-1952) made substantial contributions. Social Learning focused upon overcoming
contradictions between theory and practice. This paradigm seeks to reduce dissonance between what a decision-
maker knows to be fair (i.e. possibly a determination of what is fair based upon Kant's Categorical Imperative or
Rawls' Original Position and actual practice). This paradigm is often referred to as Pragmatism. The forth and final
paradigm is planning as social mobilization characterized by direct collective action from bc Io\" as opposed to
"top down" planning. Friedmann regarded this paradigm as planning without science and fairness by direct
democracy. This paradigm, however, might be limited in its ability to produce fair outcomes for the same reason that
Plato's Socrates found democracy unfair. That is, the rule of the will of a majority of the masses might not produce a
fair result. As an example, if there are three people with each an equal vote, 2 of the three can vote to take away the
property of the other. In this pure democracy, the two persons who took the other's property are not constrained by
anything other than each one's ability to combine with the other persons to determine the outcome of property
as to the lack of laws punishing parents who failed to educate his or her children. He reasoned
that perhaps society thought it was punishment enough to leave the parent, who neglected the
instruction of his or her family to those troubles that inevitably result from allowing children to
Early American legal philosopher James Kent continued the theme of parental
responsibility for education in his Commentaries. Like Blackstone, Kent extended this duty to a
civil liability. He noted that should a parent abscond and leave his or her children a public
charge, the absconding parent's estate should be liable to be sequestered and the proceeds
applied to the education of the child. Over the past two centuries however, the education of
children has moved from an individual parental duty to a public function.
The Philosophical Context for Public Education Finance
The public schools of the United States were formed from a philosophical reasoning that
dates back to Aristotle. In Politics, Aristotle envisioned each citizen pledging allegiance to the
state to place the interests of the common good of all above those of self and common interest.
Aristotle argued that man has a natural impulse to increase his own pleasure and decrease his
personal pain by advancing the condition of society. This advancement of the common good
would ensure liberty and justice for the individuals in the society. Aristotle argued that
individuals are better served by the wisdom of collective judgments than the determinations of
individuals because, over the long run, considerations made only in self-interest will factor just a
part and not the whole of any given issue. This philosophy holds that the common will is a more
reliable standard for social conduct than the caprice of the individual.
6 Grace Abbott, Child and the State (1968) at 11.
SKern Alexander and Richard G. Salmon, Public School Finance (1995) at 6.
In his 1792 report on the status of public education to the French National Assembly
philosopher Condorcet argued that "only through universal education could citizens be taught
effectively to enjoy their rights and fulfill their responsibilities."8 This quest for the general will
was enunciated earlier by Rousseau as the "most important rule of legitimate and popular
government." Rousseau's general will envisioned collective decision-making as opposed to an
This philosophy translated into the need for an educated citizenry to preserve the
republican form of government. The view was best expressed by Founding Father James
Madison when he concisely explained, "[a] people who mean to be their own Governors, must
arm themselves with the power which knowledge gives."10 This view held simply that if an
individual failed to receive an education, it was not that individual alone who suffered the
consequences but that society too would also suffer. In the individual's subsequent limitation in
knowledge, and the skills for getting knowledge, the individual would not be helping the
electorate to make the best possible decisions. Anthropologists support this view that a publicly
educated electorate assists in the efficient functioning of a state.1l
Accordingly, the state has an interest in educating the masses that surpasses even the
individual's interest in his or her own education. As the individuals' level of civic competency
increases commensurately with education, so too does the civic efficiency and fairness of the
8 R. Freeman Butts and Lawrence E. Credmin, History of Education in American Culture (1953) at 190.
9 Jean Jacques Rousseau, Discourse in Political Philosophy (1785) from The Social Contract and Discourses,
G.D.H. Cole trans. (1973) at 135.
1O James Madison, ;'; ,a,,i', ofJames Madison: Comprising his Public Papers and his Private Correspondence
(letter to W.T. Barry, August 4, 1822) Gilliard Hunt ed. (1910) at 103.
1 Yehundi A. Cohen, li-,,,i of Men's Minds: .Arimhl. i. 'g ...1 Perspectives on Education 39-40 (1971) at 39-40.
The above political philosophers directly connect the effectiveness of a republic or democracy to
the education of its citizenry.
Moving past merely the interest of the state, some contemporary political philosophers find
adequate education an individual human right. The movement toward recognition of a human
right to education started in the 1800s through the emergence of liberalism embodied in Engels.12
Nineteenth century liberal thought influenced the definition of educational rights in Europe.
Beginning with Germany in 1849, the right to education began appearing in the constitutions of
European nations. The German constitution affirmed education as a right of every German. This
provision, however, did not create an absolute duty of the state to provide the fulfillment of the
The first instance of international recognition of the right to education occurred in the
aftermath of WWI. The various broken nations and minorities sought protection of religious and
linguistic identity though treaties adjunct to the principle peace treaty ending the war. The Treaty
between the Principal Allied Powers and Associated Powers and Poland in 1919 sought to
provide guaranteed minority educational rights. The 1924 League of Nations Declaration of
Geneva implied a universal right to education but did not expressly proclaim the right.
On the national scale, the 1936 Constitution of the Soviet Union provided the first
proclamation of a right to education with a corresponding state duty to educate. This provision
was for all grade levels including higher education and vocational training. Other socialist states
correspondingly followed. On the world scale, the United Nations General Assembly declared in
1948 that everyone has the right to education. Since that time, most internationally recognized
declarations on human rights enumerate education as a human right.
12 See Douglas Hodgson, Human Right to Education (1998).
The Historical Context of Public Education Finance in the United States
State concern for public education and tax support for the public schools can be traced to
actions of the colonial legislature of Massachusetts. The Massachusetts law of 1642 directed
"certain men of each chosen town to ascertain from time to time, if parents and masters were
attending to their educational duties; if the children were being trained in learning and labor and
other employment profitable to the state; and if children were being taught to read and
understand the principles of religion and the capital laws of the country they were empowered to
impose fines on those who refuse to render such accounts to them when required."13 Cubberly
observed that this was the first time in the English-speaking world that a legislative body enacted
legislation requiring that children be taught to read.
The 1642 law was tried for five years and found unsatisfactory. In 1647, the legislative
body of the Massachusetts colony enacted ye olde deluder law. The preamble of the law stated
that one of the chief projects of ye olde deluder Satan was to keep people in ignorance of the
Scriptures. Accordingly, the obvious way to defeat Satan's purposes was to teach the people to
read and write. To that end, the legislative body ordered that every town must provide, at public
expense, teachers and schools for the education of the children in that town. This Massachusetts
law influenced other colonies so that by 1720 Connecticut, Maine, New Hampshire, and
Vermont had all followed Massachusetts.
Throughout the colonial period, while New England continued to develop publicly funded
education, the central colonies like New York, Pennsylvania and New Jersey relied upon
parochial schools. These parochial schools were primarily funded by their respective
denominations but were also able to benefit from fees and rate bills. Rate bills are special taxes
13 Ellwood P. Cubberly, History of Education (1920) at 364.
levied upon parents and are assessed in proportion to the number of children sent to the schools.
The primary purpose of these parochial schools, like the schools in New England, was to teach
religion. However, reading, writing and arithmetic were seen as an essential means to that end.
Large portions of the New England and central colony populations consisted of religious
dissenters from Europe. Alternatively, the early settlers of Virginia and the rest of the South were
not religious dissenters but rather agents of British businesses. As a result, the majority of these
settlers supported the Church of England and continued to provide education in much the same
way as existed in England. Under the British system, schools were either under the church or
private control. Private schools were financed by private tuition and patronized almost
exclusively by the wealthy. Wealthy families also hired private tutors in the home or sent their
children to Europe for education. The poorer children generally had only apprenticeship training
or a small number of seats in charity schools.
Summarizing the public educational landscape in the colonial period of America, public
education was available in only a few New England colonies and even in those colonies
education was not entirely free. Outside of New England, education was provided by parochial
or private schools financed primarily by the parents of the children attending them. Under this
system educational opportunity was a generally a function of the wealth of a child's parents and
few children were educated who did not come from wealthy parents.
The general public's attitude toward education in the national period of American history,
approximately 1783 to 1876, can be summed up in Article III of the Ordinance of 1787 that was
enacted by the Continental Congress contemporaneously with the United States Constitution. It
reads, "[t]he means of education shall forever be encouraged."14 Although applied only to the
14 Federal and State Constitutions, Vol. II, F.N. Thorpe ed. (1909) at 957.
states known at the time as the Northwest Territories (i.e. areas west of the Appalachians that we
now call the Midwestern States), this ordinance implied that education was a state responsibility
and a vital aspect of a republican or democratic form of government. The provisions of this
ordinance encapsulate the political and educational philosophies of the founding fathers.
The beliefs of persons of advanced knowledge and forward-looking perspectives have a
profound influence on subsequent events even though the policies advocated may not have been
accepted at the time. Here we see the philosophy that liberty, equality, and good government is
linked to an educated citizenry.
Public education developed slowly in the early national period. The best known of the
early advocates was Thomas Jefferson. In 1787 he wrote in a letter to James Madison, aboveoe
all things I hope the education of the common people will be attended to; convinced that on this
good sense we may rely with the most security for the preservation of a due sense of liberty."1
In 1816, after his retirement from the presidency, he wrote to Charles Yancy, "[i]f a nation
expects to be ignorant and free in a state of civilization it expects what never was and never will
be ... There is no safe deposit [for the foundations of government] but with the people
themselves; nor can they be safe with them without information."16
Despite the advocacy of Jefferson and others, tax-supported public education did not
generally become available in the Middle-Atlantic and Midwestern states until after 1830 and in
the Southern states until the late 1800s. Although some progress had been made by the middle
1800s, free public education was not generally available in the United States. According to the
15 See Thomas Jefferson, Works of Thomas. ,. n... i in Twelve Volumes, The Federal Edition (Letter to James
Madison, 1787) Paul Leichester Ford ed. (1906).
16 See Thomas Jefferson, Works of Thomas. ,. n... i in Twelve Volumes, The Federal Edition (Letter to Colonel
Charles Yancey 1816) Paul Leichester Ford ed. (1906).
Seventh Census of the United States, in 1850 only about half of the children of New England,
one-sixth in the western territories, one seventh in the Mid-Atlantic States and paltry numbers of
children in the South were provided with a free public education. As late as 1870, 57% of the
student-aged population was enrolled in the public schools and the average length of the school
term was only 78 days.
Tax support for the public schools was largely confined to the elementary grades until the
latter part of the 1800s. Up until 1840, not much more than a dozen public high schools had been
established in Massachusetts and not more than an equal number in all of the other states
combined. Private academies and parochial schools provided most of the secondary education
available. Throughout this period, legislation providing for the establishment of high schools was
attacked in the courts of many states. One such challenge, the Kalamazoo case, was to become a
resounding justification for the creation of public high schools nationwide. In the 1875
Kalamazoo case, the Supreme Court of Michigan rendered an opinion so favorable and so
positive in support of taxes for high schools that it greatly influenced the development of high
schools in other states. Yet high school education was not universally available by the close of
the nineteenth century. Only 8% of the population 14-17 years of age was enrolled in grades 9
through 12 in public high schools by 1900. In rural areas, public high schools did not become
available until after World War I.
Free public education developed very slowly in the United States during the first quarter of
the nineteenth century. However, between 1830 and 1860, constitutional and statutory
authorization for tax-supported public schools was general in the Mid-Atlantic and Midwestern
states. All of the New England states had authorized tax support of public schools prior to 1830.
Legal provision for tax support of public schools in the South was not generally authorized by
the state legislatures until the late 1800s. But even after tax levies for public schools were
authorized supporters of public schools, not only in the South but also in other states, frequently
faced bitter opposition to such levies. The colonial belief that church and parents were solely
responsible for the education of children was an obstacle that was to give ground grudgingly and
remains very much in evidence today.
Although taxes for public schools were generally authorized during the nineteenth century,
they were frequently supplemented by tuition charges and/or rate bills. Rate bills were abolished
in most of the Northern and Midwestern states between 1834 and 1871. However, the practice of
charging tuition, especially for public schools, continued well into the twentieth century. Tuition
was disguised by calling it an incidentalfee. Such fees made education still the largely the
province of the wealthy with the poor mostly unable to participate.
In summary, public finance for formal education is a relatively new phenomenon. At the
birth of our nation's colonial period, a child's education was viewed as a duty of his or her
parents and not that of the state. However, concomitant with the ideals of a republican or
democratic government and liberty, philosophies that saw virtue and necessity in an educated
citizenry were taking root in the American psyche. During the colonial period, governments,
beginning in New England and graduating southward, began creating public schools and taxing
their citizens to finance those schools. In the early national period and throughout the 1800s, this
trend slowly continued with more and more public schools becoming available for children
throughout the growing country. By World War I, children even in remote rural areas were
provided free education by public schools.
The Historical Context of Public Education Finance in Florida
Florida's movements towards public schools started in 1831 through the efforts of the
Florida Educational Society. This movement created the first free school in Saint Augustine in
1832. Through the 1860s, a few Florida counties organized public schools. The 1865 Florida
Constitutional Convention recorded some discussion of a constitutional provision for free public
schools statewide. Subsequently, the 1868 Constitution created a fund for public schools and
introduced language that public education is to be provided by the state. Finally, the 1885
Constitution contains the language that we see today regarding the right to a free, state funded,
education for the children of Florida.
In 1947, the Florida legislature passed an act creating a Minimum Foundation Program.
This legislation recognized inequalities in public school funding among the Florida counties and
school districts that resulted from differences in the wealth of local landowners (who paid local
ad valorem real estate taxes). A minimum foundation program guarantees a certain foundation
level of expenditure for each student, together with a minimum tax rate that each county or local
school district must levy for educational purposes. State aid from state general taxes is used to
make up for the difference between the minimum tax rate and the foundation expenditures.1
Opponents of impact fees point out that the fees can usurp the principles of the Minimum
Foundation Program because wealthier communities can build more expensive schools than can
less wealthy communities.
Florida's Minimum Foundation Program has grown into the more comprehensive Florida
Education Finance Program (FEFP) that was initiated in 1973.18 A main thrust of the FEFP is to
insure equal access to education for all Florida students regardless of geographic or local
economic conditions. The FEFP recognizes four factors to equalize public school funding:
varying local property tax bases; varying education program cost; varying cost of living; and
17 See A.R. Odden and L.O. Picus, School Finance: A Policy Perspective (1992).
18 Doing the Math: Southern State School Finance Systems, Jonathan R. Watts Hull ed. ( i '4) at 12.
varying cost for equivalent educational programs due to sparseness and dispersion of the
population. The FEFP operates by determining the number of full-time equivalent students in a
school system and then applying multipliers to that number. The multiplier adjusts for the four
equalization factors and the result is an adjusted value for each individual school district. The
product of that calculation is then multiplied by a legislatively set base per-student allocation
($3,537.11 for FY 2002-2003) and further adjusted by a cost of living and other adjustments.
Combined, the multipliers and adjustments attempt to equalize funding to all public schools
regardless of the wealth of the ad valorem taxpayers in that school district. Where ad valorem
taxation falls short of the minimum state-legislated level of funding per student, the state makes
up the difference.
Since enactment of the Minimum Foundation Program and FEFP, public school financing
has come from a combination of state and local sources (including an optional ad valorem tax
surcharge made available in 1996).19 While impact fees are a growing component of local
contribution to county and school district public school financing combinations, they are not the
only innovative financing mechanism. Some districts have begun Educational Facility Benefit
Districts (EFBDs). These districts are a public/private agreement to levy non-ad valorem
assessments and borrow money to finance/construct public schools within the EFBD.
Another growing source of public school financing is the use of charter schools. The
original intent of charter schools was to provide a forum for innovative instruction and learning
but they have since evolved into an innovative source of public school construction funds.
Charter school construction is characterized by cooperation amongst school districts,
city/counties, developers and private individuals/agencies. The North Lake Park Community
19 D. Brent Wilder, Financing Solutions for Florida Schools (2 I'4).
School in Orange County is an example of private/public cooperation for charter school
construction. In 1997, Orange County Public Schools (OCPS) was approached by a local
developer and the City of Orlando with the request to build a new elementary charter school
through private and public cooperation.20 The school was planned and built with the private
developer's funds to OCPS specifications. The gymnasium was financed by the private non-
profit YMCA. OCPS was to pay back the developer for the principal cost of building the school
over a five-year period after the school opened. OCPS would pay the interest through
reimbursement of impact fees collectable from the developer. Thus, the need for a new public
elementary school was met through cooperation of the school board, the developer and outside
non-profit organizations. This innovative arrangement opens the possibility for any number of
private and non-profit contributions to public school construction costs.
Impact fee opponents criticize the current public school financing scheme in Florida by
asserting that the current system is either failing to work within the massive amounts of dollars it
currently receives or there is a changing of the burden from state (general taxation) finance of
public schools to private financing of public schools. Going back to the 1906 report of the state
school superintendent, Florida public schools provided education to 130,345 students with state
spending of $1.02 million dollars. Since that time, Florida's public school student enrollment
has constantly increased to its current level of 2.7 million students with state spending of about
$5.9 billion dollars this fiscal year.21 Although there has been a massive increase in the number
of students, the cost of providing of education to those students has increased exponentially. In
20 Henry Boekhoff, Financing Solutions for Florida Schools (2'" '4).
21 Florida's e-budget (2006).
1909, the state spent $149 per student (adjusted for inflation).22 Last year, the state spent $2,185
per student. Therefore, this year's spending figure represents an increase by a multiple of fifteen.
Similarly, local millage rates have increased significantly and local taxation initiatives have
passed. Even with such an increase in spending, Florida local governments and school districts
continue to assert that more public school construction is needed. This, of course, requires more
money and innovative ways to appropriate that money. Opponents of impact fees assert that what
had traditionally been a burden upon the state under general taxation is now unfairly being
shifted to developers, homebuilders and residential landowners through impact fees.
Now that the philosophical and historical context for public school financing has been set,
details of public school financing will be discussed. For the purpose of the objective, school
impact fees in particular will be examined.
0 Very Know/No
Not at all
O Somewhat 0 Not very effectively
Figure 1-1. Floridian's perception of spending of tax dollars on public schools. Source:
Forster & Schuler (2006).
22 Inflation Calculator (2006).
E Too high
Floridian's perception of the degree of spending on public schools. Source:
Forster & Schuler (2006).
THE SCHOOL IMPACT FEE
Impact fees arose as an issue in Florida in the 1960's a period of rapid population growth
and high inflation. Between the 1950's and the 1970's, Florida's population doubled from 2.8
million to 5 million.1 As Figure 2-1 indicates, this decade began the nearly 300,000 person per
year growth of the state that continues today. As Florida's population grew, so also did the costs
of providing services. Significant inflation began in the 1960's and escalated to double digits in
the 1970's and 1980's.2 The condition of rapid growth combined with inflation set off a
taxpayer's revolt, first in California and eventually nationwide. Non-taxation means of financing
public goods and services were demanded by the public in an effort to stem escalating tax
burdens. User charges, including impact fees, were a response to the public's demand.
Florida local governments get money almost equally from the State, from local property
taxes and from user charges such as impact fees. Table 2-1 shows total receipts by all local
governments in Florida by type and as a percent of total revenue for both 1992 and 2002. Over
this period there is a slight tendency for all taxes and property taxes to go down while current
charges rise. Table 2-1 also shows local government revenues in the nation. These data reveal
that Florida local governments make less use of taxes than do local governments nationally. Both
nationally and in Florida, the use of taxes is decreasing as a source of revenue. Conversely,
charges and miscellaneous, specifically current charges, are the rising source of revenue. User
charges are a large component of current charges.
1 See Julian C. Jurgensmeyer, Clancey Mullen, James C. Nicholas, Tyson Smith, Gregory T. Stewart, Bob Wallace,
and Randy Young, Impact Fee in Florida: Their Evolution, Methodology, Current Issues and Comparisons with
other States (White paper prepared for the Florida City and County Management Association, October 2005).
2 Inflation by Decade (2006).
The trend nationally is away from taxes and towards charging those that use or benefit
from a service the cost of providing that facility or service. Table 2-2 shows local government
finance data from Table 2-1 on a per capital basis. Here we see Florida local governments
receiving slightly more revenue per capital than the national norm. However, they receive less of
their revenues from taxes than is the norm, meaning that Florida local governments have been
turning more to non-taxation means of funding. This is especially true for all charges and current
While there is a general movement toward non-tax means of local government funding,
this trend is even more pronounced in Florida. Given that Florida local governments receive
more money per capital than the national norm might suggest that there are adequate funds and no
need for supplementation. However, the State of Florida raises $3,312 per capital as contrasted
with $4,683 for all states. When state and local revenues are considered together, Florida's per
capital receipts amount to $5,468 as contrasted with $6,607 for the nation.
Perhaps most significant is that Florida state intergovernmental spending is $851 per capital
as contrasted with $1,317 nationally. If Florida provided local governments with
intergovernmental funds at the national rate, local Florida governments would have gotten an
additional $7.9 billion in revenue last year. In addition, Florida's sharing of state revenues with
local governments has fallen behind the practices of other states. Table 2-3 focuses on state
revenues provided to local governments. Revenue to local governments from state governments
in 1992 was $660.27 per capital in Florida and $775.79 for all states. In 2002 Florida's per capital
amount grew by 42.9% to $934.22 and the national average grew by 61.4% to $1,263.85. These
data, when read with those of Table 2-2, clearly show what has been the situation with local
government finance in Florida. Per capital tax burdens imposed by Florida local governments
increased by 35% while property taxes grew by 28%. All charges grew by 43.4% while current
charges grew by 68.5%. All of these increases occurred while the state of Florida was cutting
taxes and lagging further behind in intergovernmental revenue. Impact fees fall within the
general pattern of moving toward non-taxation means of funding as local governments attempt to
The Emergence of the Impact Fee
The first appearance in Florida of what is currently termed an impact fee was by the local
government of Gulf Breeze when it imposed a charge for parks at the time of subdivision in the
early 1960's. This was ruled an unauthorized tax and therefore unconstitutional in Carlann
Shores v. GulfBreeze.3 Hollywood's attempt to get money for parks met a similar end in
Venditti-Siravo v. Hollywood.4 Maitland followed also followed this trend in Admiral
Development Corp. v. Maitland.5 The year 1976 had two significant cases. In Wald Corp. v.
Dade County, Dade County's requirement for the dedication of land for drainage canals was
upheld .6 Also, the Florida Supreme Court decided Contractors and Builders Assn. ofPinellas
County v. City ofDunedin.7 In this case the court wrote:
Raising expansion capital by setting connection charges, which do not exceed a pro rata
share of reasonably anticipated costs of expansion, is permissible where expansion is
reasonably required, if use of the money collected is limited to meeting the costs of
expansion. Users who benefit especially, not from the maintenance of the system, but by
the extension of the system should bear the cost of that extension.
Therefore, impact fees were found valid where the cost of the additionally required infrastructure
3 Carlann Shores v. Gulf Breeze, 26 Fla. Supp. 94 (1966).
4 Venditti-Siravo v. Hollywood, 418 So.2d 1251, 1253 (1982).
5 Admiral Development Corp. v. Maitland, 267 So.2d (1972).
6 Wald Corp. v. Dade County, 338 So.2d 863 (1976).
7 Contractors and Builders Association of Pinellas County v. City of Dunedin, 329 So. 2d 314 (1976).
is borne by the new development causing the need for additional infrastructure but also that the
new development does not pay any additional amounts that would cause a windfall to existing
development. The Dunedin court makes clear that such charges, impact fees, are not unlimited.
Extending their rationale:
[t]he cost of new facilities should be borne by new users to the extent new
use requires new facilities, but only to that extent. When new facilities must
be built in any event, looking only to new users for necessary capital gives
old users a windfall at the expense of new users. New users can only be held responsible
for the costs attributable to new use and not for other costs, especially any charge that
would yield a "windfall" to the existing community.
Dunedin was a case involving a municipally owned water and sewer utility.
Hollywood Inc. v. Broward County extended into the application of the Dunedin logic to
parks, the same government facility that the cities of Gulf Breeze, Maitland and Hollywood
unsuccessfully tried to fund with development charges.8 In HollywoodInc. the court focused on
requiring new users to pay for the costs attributable serving the new users. The HollywoodInc.
Court provides the principles of the Dual Rational Nexus Test. Specifically:
The local government must demonstrate a reasonable connection, or rational nexus,
between the need for additional capital facilities and the growth generated by the
development being charged the impact fees, and
The government must specifically earmark the funds collected for use in acquiring capital
facilities to benefit the development charged the impact fees.
Home Builders and Contractors Ass'n. v. Palm Beach County established that road impact
fees were permissible and within the authority of a non-charter county .9 The Court in St. Johns
County v. Northeast Florida Builders Ass 'n. recognized school impact fees as within a county's
power if the rational nexus requirement from Dunedin was followed .10 Volusia County v.
8 Hollywood Inc. v. Broward County, 431 So.2d 606 (1983).
9 Home Builders and Contractors Association v. Palm Beach County, 446 So. 2d 140 (1983).
10 St. Johns County v. Northeast Florida Builders Association, 583 So.2d 635 (West 1991).
Aberdeen at OrmondBeach, LP held that if a nexus cannot be established then no impact fee can
be charged. Impact fees evolved in Florida through the courts, ultimately being recognized as
being within city and county home rule authority.11 This method of evolution was perhaps the
only option since Florida cities and counties were exploring new issues of governance and
government finance. In the end, the body of law that came out of this process clearly established
Impact fees are permissible;
Impact fees cannot be imposed or structured to benefit or provide a windfall to existing
Impact fees must satisfy the dual rational nexus between the need for facility
improvements and new development; and
Local governments are required to show that developments paying impact fees will
receive benefit from the expenditure of those fees.
Impact fees began in Florida as minor supplements to local government capital improvement
funds. The park fee at issue in HollywoodInc. was $125 per single family home and the school
fee at issue in St Johns was $385 per single family home. The amounts today are in the
thousands with Collier County's school impact fee toping $10,000.00. Therefore, the evolution
has been both in the use of impact fees and in the amount of those fees.
Impact Fee Formulation
There are two generally accepted impact fee formulation methodologies commonly used in
Florida. These are the consumption-based and improvements-based methodologies. These
methodologies have evolved during the last twenty years. While the majority of Florida impact
fees are consumption-based, both have been used to satisfy the requirements of the dual rational
nexus test discussed earlier. Although there are variations in the application of these
methodologies, this section discusses the basic methodology, underlying assumptions, and
1 Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So.2d 126 (West 2000).
implementation requirements of each methodology. This section also addresses the basic
differences between the methodologies and how each of the methodologies furthers the
implementation of the comprehensive plan and in particular the Capital Improvements Element.
Consumption Based Impact Fees
The consumption-based or standards based methodology calculates impact fees based on
the value of public infrastructure consumed per unit of land use. The value of the public
infrastructure is usually developed by calculating the replacement cost of the existing public
capital infrastructure. This value is then related to a facility-based standard such as, elementary
schools per 1000 population or acres of parks per 1000 population. Values are generally
expressed in terms relevant to those facilities such as value per acre and per capital. The key
underlying supposition is that growth consumes some identifiable quantity of public
infrastructure capacity, and the fee is based on the cost of providing that identified quantity.
Proponents of consumption based impact fees argue the flexibility to the government as a
significant advantage to the consumption approach. Specifically, a government that uses a
consumption based impact fee can develop its capital improvement program to include projects
that directly respond to where growth and thus the need for the public infrastructure occurs. The
capital improvement program list of improvements is reviewed annually and that list can change
as growth patterns change, resulting in new project priorities. Finally, it should be noted that
ordinances that implement consumption based impact fees generally include a provision that ties
the need for and benefit of impact fees to projects that must be included in the local
government's capital improvements program and comprehensive plan capital improvements
Improvements Based Impact Fees
The improvements based or needs based methodology charges new development based on
a specific set of capital improvement projects. This approach is usually based on a long-range
master plan that includes a list of future projects that are determined to be necessary to
accommodate existing and future growth at the adopted level of service. Under the needs based
approach, an analysis is usually made of the impact of any existing deficiencies and an
adjustment is made to account for deficiencies existing at the beginning of the planning period to
assure that the cost of correcting those deficiencies is not shifted to new development. However,
generally, no adjustment is made for excess capacity built as part of the improvements list that is
available at the end of the planning period, since the improvements driven approach did not
charge for the existing excess capacity that is available at the start of the planning period and that
is consumed by new development. The implicit or explicit assumption is that there may be
excess capacity in every infrastructure system, and as long as the amount or proportion of excess
capacity at the end of the planning period is reasonably similar to what was there at the
beginning, there is no need to make adjustments for excess capacity.
Proponents of the improvements based methodology indicate that this method provides a
direct tie to the Local Government Comprehensive Planning and Land Development Regulation
Act that requires local governments to adopt a list of planned capital improvements as part of
their comprehensive plans. In the improvements based methodology, the list of capital
improvements used in the calculation of the cost component is usually the list of improvements
included in the five year or longer Capital Improvement Program and the local government's
Capital Improvements Element. Proponents say that this methodology gives the development
community assurance that the impact fees they pay are being spent on the specific improvements
under which the impact fee was calculated. When the local government changes the list of capital
improvements, the resulting impact fee should be recalculated using the new list of capital
improvements. Finally, similar to ordinances for consumption based impact fees, improvements
based impact fee ordinances also include provisions that tie the need for and benefit of impact
fees to projects included in the local governments capital improvements program and
comprehensive plan capital improvements element.
Differences between Fees
The basic difference between the two is that the consumption based impact fee charges
new development based on the value of the capital asset being consumed by each unit of land
use, whereas, the improvements based impact fee charges new development based on the cost of
a specific set of improvements and their associated cost per unit of land use. As indicated
previously, the key underlying assumption for consumption based impact fees is that growth
consumes some capacity of all public facilities and not just the new infrastructure being built.
In improvements based impact fees, growth is being charged based on a specific set of
project improvements that the local government is planning to build through their adopted capital
improvements program. When the list of improvements in the capital improvements program
changes, the impact fee should be recalculated based on the new list of capital improvements.
In summary, both methods have been used successfully in Florida and both methods
satisfy the requirements of the dual rational nexus test. In Florida, the majority of the impact fees
use the consumption based methodology. Additionally, each approach tends to be more
applicable in particular situations. The inherent flexibility of the consumption based approach
allows the jurisdiction to match impact fee receipts to specific projects as the needs for specific
projects are identified. Improvements based systems are more inflexible and are more applicable
to those situations where specific needed improvements can be identified well in advance and
impact fees can be tailored to those specific needs.
Experience has shown that both approaches are valuable tools of capital improvement planning
The Fee Formula and Basic Implementation Considerations
The general impact fee formula can be represented as:
IMPACT FEE = (DEMAND X UNIT COST) CREDIT
DEMAND = the amount of capacity needed to accommodate new development, based on
the existing or adopted LOS standard, or the associated need for service such as, vehicle miles of
travel, elementary schools per 1000 population, acres of parks per 1000 population, library or
other building square footage per 1000 population, among others;
UNIT COST = the cost per unit of capacity or demand based on the calculated value of the
asset or set of improvements.
CREDIT = the value of the future non-impact fee revenues that growth will generate that
will also be used to pay for the capital facility expansion of that pubic infrastructure.
Regardless of which methodology is used in the impact fee study, there are certain criteria
and procedures that need to be followed in developing and implementing impact fee programs.
These include, but are not limited to:
Local governments must establish LOS standards for each impact fee program area.
Local governments must apply the same LOS standard to both existing and new
An "existing deficiency" is created when a local government establishes a LOS standard
that is greater than the current LOS.
New development cannot be charged impact fees designed to correct an existing
deficiency. To charge new development based on a LOS standard higher than what exists
12 See Jurgensmeyer, Mullen, Nicholas, Smith, Stewart, Wallace, and Young, supra note 1.
today, the local government must have a financial plan (non-impact fee revenue sources)
to eliminate the existing deficiency within a reasonable amount of time (generally five
years or less).
Facility costs should be reflective of recently built projects, current bids and architects
and engineers estimates of project costs.
Credits, discussed more thoroughly in the next section, should reflect the additional non-
impact fee revenues reasonably expected to be generated by new development being
charged the impact fee when such revenues are used for the same infrastructure for which
impact fees are being charged.
There are many other policy related issues that are addressed as each community updates and
implements impact fees. These policy issues are unique to each community and are reflected in
the impact fee technical analysis.
Impact Fee Credits
Most impact fees include as a component of their methodology the consideration of
whether a credit as a deduction from the cost component of the fee calculation is required.
Generally, a credit is a reduction in the amount of an impact fee due from a newly constructed
development resulting from either the donation of the property or improvements by that
developer or the payment of tax or other revenues applied to pay for the same infrastructure that
is being funded by the impact fee. This contribution generally takes one of the following forms:
Developer Contributions This credit may be due as a result of the donation of property
or improvements from a particular development to a governmental entity which reduces
that development's impact on the system. Frequently these contributions take the form of
the donations of right of way or a particular site upon which some type of government
facility will be constructed. Under these circumstances, the amount of the credit is
generally determined through either the provisions of the impact fee ordinance or by the
terms of a specific development agreement.
Tax and Other Revenues A credit may also be due as a result of the payment of taxes
and other revenues by the newly constructed development which are available and
applied toward the funding of the same infrastructure for which the impact fee is
collected. These contributions are normally applicable to all similar developments and are
incorporated into the calculation of the impact fee itself.
The credit component comports with the fundamentals of the dual rational nexus test. Impact
fees, as with all other types of fees, are limited to offsetting the cost of the regulation or the
service that that is being provided.13 In the context of impact fees, the amount of the fee cannot
exceed the capital cost of the impacts resulting from the newly constructed development.14 To
make certain that the amount of the fee does not exceed this cost, a credit is given for
contributions of property and improvements made by a developer and for the payment of taxes
and other revenues that are available and applied toward the provision of the same infrastructure
for which the impact fee is collected. The clear purpose of the credit is to make certain a newly
constructed development pays no more than the unfunded cost of the infrastructure needed to
serve that new development.15 The particular approach utilized to consider the availability of a
credit within the context of an impact fee methodology may vary, and the courts have generally
recognized that the local government imposing the fee is best able to evaluate the differing
approaches. The only limitation is that any methodology utilized must consider and provide a
credit for other revenues that are available and applied toward providing the same infrastructure
for which the impact fee is collected. In determining whether the payment of taxes or other
revenues is credited against the impact fee, only those revenues that are applied toward the
funding of improvements and create additional capacity to serve that development, are entitled to
a credit under Florida law. Newly constructed development, just as existing development, pays a
13 See Atkins v. Phillips, 26 Fla. 281 (1890); Tamiami Trail Tours, Inc. v. City of Orlando, 120 So. 2d 170 (1960);
and Broward County v. Janis Development Corp., 311 So. 2d 371 (1975).
14 See Contractors & Builders Association of Pinellas County v. City of Dunedin, 329 So. 2d 314, 320 (1976) and
Home Builders & Contractors Association of Palm Beach County, Inc. v. Board of County Commissioners of Palm
Beach County, 446 So. 2d 140 (1983).
15 See St. Johns County v. Northeast Florida Homebuilders Association, 583 So.2d 635 (1991) (where the Supreme
Court discussed the credit calculation and characterized the fee as the average net cost of $448 for building new
schools that would not be covered by existing revenue mechanisms).
variety of taxes and revenues to the Federal, State and local governments. Those revenues may
be used for operations maintenance, repair and even renovations, but they are not connected to
new capacity. Therefore, no credit is required. However, those taxes and revenues that fund
additional capacity in the same infrastructure system for which the impact fee is being collected
are entitled to a credit under existing law in the State of Florida. All impact fees in Florida
provide such credits.16 As we have seen validated previously, a two-pronged test determines
whether taxes or other revenues must be credited from an impact fee:
First, whether the taxes or other revenues paid by that newly constructed
development are legally available to fund the same infrastructure for which the
impact fee is collected. (Legally available in this context means not restricted or
otherwise committed for purposes other than for what the impact fee was
Second, whether those legally available taxes or other revenues are actually applied
toward reducing the cost of the infrastructure requirements for the newly
constructed development that pays the impact fee.
If a revenue source meets this two-pronged test, then a credit must be deducted from the capital
cost determined in the impact fee calculation.
Impact fee methodologies may, and frequently do, vary in how they approach the
consideration of credits. Some methodologies employ a more generous approach to credits not
necessarily because they are legally required but rather for ease of administration, to avoid legal
challenge or based on direction from the elected officials. These approaches are valid and
represent a judgment by the legislative body. However, merely because a more generous
approach to credits is incorporated into a methodology does not mean that it is a legal
requirement for a valid impact fee. For example, some methodologies incorporate a credit for
past taxes and revenues paid to a local government prior to the actual development of a property.
16 Jurgensmeyer, Mullen, Nicholas, Smith, Stewart, Wallace, and Young, supra note 1, at 13.
Though such adjustments may be made in the calculation of an impact fee, they are not required
to be credited unless the created capacity is available to serve that property at the time it was
developed. If these contributions were not applied to provide the capacity to serve any
development on that property, then they are not a substitute for the impact fee and no credit is
Additionally, a variety of planning periods have been used to analyze credits from a newly
developed property. The courts have granted local governments deference in the selection of the
particular planning period to be used. However, the particular period selected should be
consistent with the ultimate aim of the impact fee which is to provide the necessary infrastructure
to serve that development and to do so in a timely fashion. Therefore, an inherent connection
exists between the use of impact fees and the requirements of growth management laws to
provide the necessary infrastructure to serve a development concurrently with its impacts.
School Impact Fees
School impact fees have been the most frequently litigated of all impact fees. To date,
there have been four major suits dealing with school impact fees in Florida. With the average
school impact fee in Florida now reaching $3,286, the amount of school impact fees is probably
a major factor in the frequency of litigation. While amounts vary, it is common for the school fee
to be the highest of all the impact fees charged and the fastest growing. Further, as Figure 2-2
denotes, school districts are rapidly expanding the use of impact fees. As mentioned earlier, most
Floridians recognize public schools as important to the well-being of Florida. Paying for school
capacity however, has become more difficult with declining state revenues, voter resistance to
local taxes and bonds, and increasing public sentiment that new growth should pay for new
schools. As a result, school impact fees have increased in use and amount.1
Like other impact fees, school fees involve the costs of building schools, demands placed
on the school system from increased enrollment, and credits for other revenues that pay for the
needed improvements. School impact fee costs typically include school buildings, furnishings
and equipment, support facilities, the land for schools and support facilities, and school buses.
The demands placed on schools are usually measured by the average number of public school
students per dwelling unit. The credits against impact fees involve several sources of revenue
that are restricted to capital improvements for educational facilities, including money from the
State of Florida, the school district Capital Improvement (real estate) Tax that is capped at 2
mills, revenues derived from the sale of Certificates of Participation or General Obligation Bonds
and the Half-Cent Local Option Sales Tax for schools. To the extent that these sources of
revenue are available and appropriated to pay the capital costs of expanding school capacity,
they are incorporated as reductions in the amount of impact fees adopted.
One variable that distinguishes school impact fees from other types of impact fees is that
school impact fees involve more than one public sector organization and their elected officials.
School districts provide the schools but local governments regulate development. The creation
and use of a school impact fee typically involves different roles by school districts and local
governments and school impact fees require a high degree of cooperation among local
governments. The school district cannot receive impact fees unless the county agrees to adopt the
ordinance. The county depends on the school district to have properly calculated the fees and to
spend them appropriately. Cities typically collect the school impact fee adopted by the county
pursuant to a countywide ordinance adopted by the county. In St Johns the Florida Supreme
17 See St. Johns County v. Northeast Florida Builders Association, 583 So. 2d 365 (1991).
Court held that school impact fees cannot be collected unless substantially the entire county is
subject to the requirement thereby underscoring the need for intergovernmental cooperation. In
some instances, the cooperation between school district and county is sufficient to lead to the
approval of a school impact fee, but with some disagreement about the amount. While many
counties adopt rates calculated by their school district, some counties have reduced the amount
of the impact fee proposed by the school district.
Another variable involves exemption from school impact fees for development that creates
no impact on schools by forbidding school age children from living there.18 Simply put, the
Aberdeen Court held that developments where school aged children are legally barred cannot be
required to pay school impact fees.
Two recent cases raised questions about the methodology and data that are used to
calculate school impact fees. In Brown v. Lee County,19 a significant part of the plaintiff s
challenge to the school fee involved issues about specific data and methods used to calculate the
fee. The plaintiff s witnesses disagreed with many of the data and methods used by the district in
calculating the fee. The court ruled that the school board made a reasonable choice which does
not become automatically unreasonable simply because, with some extra effort, the school board
could have developed a potentially better data source. In other words, school boards and local
governments must use reasonable data and methods to comply with the dual rational nexus
requirements, but there is no official or sanctioned, or even preferred way to achieve the
18 See Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2nd 126 (2000).
19 See Brown v. Lee County, Lee County Circuit Court Case No.: 01-11623-CA (2001) (currently on appeal in the
2nd District Court of Appeals).
The most recent school fee case is Homebuilders of Metro Orlando v. Osceola County.20
The central issue in this case was a policy decision by the school board to prioritize its spending
of general capital improvement funds such that the highest priority was given to the
maintenance, repair and renovation of the existing schools. Once these needs were met, general
capital improvement funds would be devoted to expanding capacity to meet the growth needs of
the district. What particularly aroused opposition was that there was no general capital
improvement funds remaining after the needs of the existing schools were met. The result was
that no credit against impact fees was provided because there was no other revenue available to
be applied to school capacity for new development.
Another aspect of Osceola was the use of a global credit methodology that considered all
capital revenues received by the school district from all taxpayers, not just the taxes paid by new
development. Yet another issue was the use of a five-year planning period for determining costs
and the revenue credit. The Court held that the choice of impact fee methodology, including the
priority use of revenue, the global calculation of credits, and the use of a five-year planning
period is at the discretion of the school board and county provided that the choices are not
arbitrary. The Court found that Osceola County's choices were reasonable, rational and not
The issue of implementing the 2003 constitutional amendment to reduce class sizes in
public schools looms on the horizon of the impact fee continuum. The amendment requires that
the State of Florida pay for the cost of the additional classrooms. However, state funding has
only met a small fraction of the need. The responsibility for compliance with the Class Size
Amendment falls to the local school district, regardless of state funding. Some districts have
20 Homebuilders of Metro Orlando v. Osceola County, Osceola Circuit Court case CI-04-OC-1024 (2i" 1 4 (currently
an open case).
already expressed a reluctant willingness to use local taxes to build the necessary classrooms (at
the same time they will press the state for reimbursement from funding the state is supposed to
provide). Use of local taxes for the class size amendment reduces the amount of money available
to pay for new classrooms for new development, which will inevitably increase pressure to enact
school impact fees or increase the existing ones.
Another issue affecting school impact fees is the recently passed legislation that mandates
school concurrency. Florida now requires schools as a mandatory component of concurrency. If
school capacity is not available or assured, new developments expected to house new school
enrollees cannot be approved or must be conditioned on school capacity availability. This again
will increase the need for new school construction, thereby increasing pressure to enact impact
fees or increase the existing ones.
In summary, school impact fees arose out of a shortage of the general capital improvement
fund. Impact fees were recognized as a legal means to fill the funding shortfall. As the shortfall
grows, school impact fees have risen. While the provision of school capital funds by other means
will automatically reduce school impact fees through the credit procedure, increasing
populations, the Class Size Amendment, and the new concurrency requirement will all place
tremendous pressure on local governments to enact school impact fees or increase the existing
School Impact Fees as an Urban Planning Tool
School impact fees have become an important tool for Florida school planners.21 Impact
fees help to implement the planning goals of adequate provision of facilities, concurrency and
cooperation between school districts, local governments and developers. Inherent in impact fee
21 See Steve Donnelley, Toolkit for Tomorrow's Schools: New Ways of Bringing Growth Management and School
Planning Together (2003).
formulation is the provision of adequate public schools for a growing population. Impact fees are
generally charged at the issuance of building permits for new residential development and fund
school construction for the increase in students anticipated from the new development. Further,
the fees can assist in the requirement of concurrency by relating the construction of the new
schools necessitated by new development. Planners attempt to insure for the provision of school
facilities when they are needed. School impact fee ordinances require a temporal relationship
between population growth and new school construction and, therefore, further this planning
goal. As mentioned earlier, Florida's new concurrency requirement is likely to increase pressure
upon school planners to use impact fees a concurrency compliance tool.22 While sometimes
viewed by opponents as growth inhibitors, school planners can actually use school impact fees as
growth facilitators. Unlike moratoriums which bar development for a period of time, impact fees
allow for development to continue but require residential developers to incorporate more of the
true cost of the development. The fees also facilitate growth by incorporating credits into the fee
scheme. In this way, planners have the flexibility to allow development to pay for itself through
dedications and other inputs.
School planners use impact fees to enhance cooperation amongst school districts and local
governments. Impact fees, as a planning tool, require a higher degree of cooperation between
school districts and local governments than do other planning mechanisms. Thus, the use of
impact fees facilitates coordination of site selection, construction timing, and fee collection.
Similarly, impact fees allow planners to increase cooperation from developers. Impact fees create
certainty for residential developers in that they set forth an exact cost to obtain a permit in favor
of the uncertainty of negotiating development exactions and dedications.
22 Florida Statues 163.3180(13) (2006).
Impact fees help to implement the planning goals of adequate provision of facilities,
concurrency and cooperation between school districts, local governments and developers.
Because they are effective in implementing these planning goals, there will likely be increased
pressure for school planners to use impact fees to comply with Florida's new mandatory school
School Impact Fees in Other States
In addition to Florida, school fees are found in California, Hawaii, Maryland (authorized in
some counties by special acts), New Hampshire, Pennsylvania, Vermont, Washington and West
Virginia. School impact fees tend to be in the thousands of dollars and imposed only on
residential development. Thus, their prohibition in much of the country might be an indication of
both the controversy surrounding these fees and their political sensitivity.
Colorado counties and towns had used school impact fees to fund infrastructure. More
recently however, Colorado has adopted an impact fee enabling act that has all but shut down
local government's ability to adopt school impact fees.23 Because the enabling act is a legislative
product of the legislature however, there is less of an explanation of the reasoning behind the
measure than if the rule would have come from the Courts.
Massachusetts, alternatively, struck down school impact fees through its Courts.24 The
Massachusetts Court revealed its reason for ruling that school impact fees are unfair. The
Massachusetts Court specifically cited the Florida rational nexus standard set forth in St. Johns
and emphasized that its own standard is elevated over the Florida standard. In particular, the
Massachusetts Court noted that the benefits provided by school impact fees were not
23 Colorado Local Government Land Use Enabling Act, Title 29, Article 20 (2006).
24 Greater Franklin Developers Association v. Town of Franklin, 49 Mass. Ap. Ct. 500 (2000).
particularized enough to the payer. In its analysis, the Court found it unfair that the fees,
earmarked for capital improvements, could be used to buy a new cafeteria in which students in
(previously existing) homes not paying the fee would be allowed to eat. This reasoning is overly
simplistic and narrow in that it fails to account for the premise that the fees would not be
earmarked for a new cafeteria were it not for the fact that an additional cafeteria is needed to
accommodate new growth. The philosophy behind this ruling will be revisited later.
Florida is both a low tax and a rapidly growing state. Florida's population increase
between 1990 and 2000 alone exceeds the entire population of 22 states. Thus a substantial
demand exists for capital facility expansion to accommodate this growth. There is also a clear
preference on the part of the public to remain a low tax state. The financial responsibility for
accommodating the growth of Florida has been borne increasingly by local governments. The
State has been reducing taxes during the recent past as burdens for many costs, most significantly
roads and schools, have been shifted to local governments. Local governments have responded to
these demands in a variety of ways. Local taxes have been raised, especially taxes on all retail
and motor fuel sales, but property taxes have only increased by $198 between 1992 and 2003.
Impact fees have been instituted or raised as local jurisdictions responded to the needs of their
growing communities. According to the 2003 Census of Government, local government capital
outlay in Florida was $5.2 billion. The best available estimate is that impact fees raise some $1.2
billion, which is 23% of total local government capital spending, showing that 77% of all local
capital funding is paid for by the general public.
Capital funds for school construction in rapidly growing Florida counties are needed.
While sometimes unpopular, impact fees have evolved in Florida to supplement available means
of funding growth to accommodate capital improvements. The courts have imposed standards
with respect to the fairness of impact fees and imposed limitations to assure that impact fees are
used only to accommodate the new developments being charged. No local government is
required to charge impact fees, and there are some notable exceptions that choose to deal with
funding needs in other ways. Local governments, largely on their own, are accommodating over
300,000 additional people per year and doing so with declining assistance from the State and
within a context of maintaining low taxes. Impact fees are an established component of this
Like other counties in Florida, Orange County and Hillsborough County have enacted
school impact fees. Each fee is a planning tool that is legal under the principles set forth
previously. While these fees are legal, a determination of the fairness of the fees is discussed in
the next chapters.
0 Persons in millions
10 30 50 70 90 00 10
Figure 2-1. Florida's population 1910-2010. Source: U.S. Department of Commerce, Bureau
of the Census, Census Population of Counties by Decennial Census 1900-1990;
Profile of General Demographic Characteristics: 2000; and Interim State
Population Projections: 2005.
Table 2-1. Sources of state and local government revenues1992 and 2002 (values in millions of
United States All local governments
General revenue from own sources $389,470 100.0% $597,359 100.0%
Taxes $201,130 63.3% $369,730 61.9%
Property $149,765 47.9% $269,419 45.1%
Charges & Miscellaneous $120,469 36.7% $227,629 38.1%
Current charges $72,795 11.8% $153,382 25.7%
Florida All local governments
General revenue from own sources $21,561 100.0% $37,897 100.0%
Taxes $11,420 53.0% $19,533 51.5%
Property $9,454 43.8% $15,372 40.5%
Charges & Miscellaneous $10,141 47.0% $18,365 48.5%
Current charges $6,317 29.3% $12,095 32.0%
Sources: US Bureau of the Census, Statistical Abstract of the United States, Table 441, Local
Governments Revenue by State: 2002 and Table 498, Local Government General Revenue, By
State: 1992 and State and Local Government Finances by Level of Government and by State
2001-2002 and 1991-1992.
Table 2-2. Sources of state and local government revenues per capital 1992 and 2002 (values in
millions of dollars).
United States All local governments
General revenue from own sources $1,401 $2,143
Taxes $887 $1,341
Property $671 $984
Charges & Miscellaneous $514 $802
Current charges $165 $309
Florida All local government
General revenue from own sources $1,597 $2,220
Taxes $846 $1,143
Property $700 $899
Charges & Miscellaneous $751 $1,077
Current charges $250 $422
Sources: US Bureau of the Census, Statistical Abstract of the United States, Table 441, Local
Governments Revenue by State: 2002 and Table 498, Local Government General Revenue, By
State: 1992 and State and Local Government Finances by Level of Government and by State
2001-2002 and 1991-1992.
Table 2-3. Intergovernmental revenues from state per capital 1992 and 2002 (values in millions
Florida $660.27 $934.32
All states $775.79 $1,263.85
Florida as % 85.1% 73.9%
Sources: U.S. Department of Commerce, Bureau of the Census, 1992 Census of Local
Governments, State and Local Government Finances, Table 1. U.S. Department of Commerce,
Bureau of the Census, 2002 Census of Governments, State and Local Government Finances
93 94 95 96 97 98 99 00 01 02 03 04
93 94 95 96 97 98 99 00 01 02 03 04
0 County, municipal and special district fees
I School district fees
Reported impact fees by government type, fiscal years 1993-2004. Source:
Florida Legislative Committee on Intergovernmental Relations, Florida Impact
Fee Review Task Force, Final Report and Recommendations, February, 2006,
Appendix 3, Chartl.
1 Study Calculating Impact Fee
Rates is Conducted by the School
5 The School Board Spends
the Impact Fee
Money to Provide the
Needed by New Development
3 Impact Fees are Collected
4 County and
Impact Fees to
Intergovernmental coordination of impact fees. Source: Jurgensmeyer, Mullen,
Nicholas, Smith, Stewart, Wallace, and Young.
Impact Fee is
IMPACT FEE FAIRNESS
Western political philosophy traces it literary roots to ancient Greece around 400 BC.
During that time, Plato and Aristotle and even their earlier predecessors argued and wrote about
fairness in political decisions and outcomes. These original philosophers started what is deemed
the Great Conversation. The Great Conversation is the discourse of the large questions of life
such as: fairness, evil, the existence or non-existence of God, and the meaning of life. This
discussion began rather informally as ancient man began to discuss the large questions of life and
continues today both informally and formally through academic philosophy, academic
disciplines and theology. This chapter will survey a broad spectrum of philosophies, academic
disciplines and even some theology to determine fundamental concepts of fairness against which
the fairness of impact fees is analyzed. Table 3-1 gives an overview of the philosophies and
disciplines and their position with respect to fairness.
When the philosophies and disciplines are examined comprehensively, a zone of impact
fee fairness emerges within the broader public school finance continuum. As described in Figure
3-1, the public school finance continuum spans between the extremes of general taxes only and
impact fees only. Within this continuum lies a zone of impact fee fairness whereby impact fees
The philosophies and disciplines help to construct a zone of impact fee fairness based upon
logic, history, experience and thought but without a discrete mathematical explanation because
fairness is a non-discrete mathematical concept. That being said, however, the studied
philosophies and disciplines do set forth general parameters of the fairness of impact fees so that
the zone of fairness can be roughly identified.
School impact fees can be determined fair under the parameters set forth in the
philosophies and disciplines. However, this support is qualified in that the fees must not be so
miniscule as to constitute too little of the general taxation/impact fee combination. Likewise, on
the other end of the continuum, the fees cannot be the only means of public school finance. If the
fees occupy too little of a proportion of the combination, the elements of fairness that impact fees
bring to the combination are negligible. On the other hand, if the fees occupy too great a
proportion of the general taxation/impact fee combination, the elements of fairness that general
taxation bring to the combination are negligible. As a county's general taxation/impact fee
combination approaches the extremes of general taxation only (on the left) and impact fees only
(on the right), gray areas emerge where it cannot be determined whether the fees are fair or not.
Where the Orange and Hillsborough County impact fees lie on the public school finance
continuum will determine whether they are fair or not.
Orange County and Hillsborough County Impact Fees
Orange and Hillsborough Counties' school impact fee ordinances were chosen for analysis
for three reasons. First, the ordinances are similar in that both contain provisions and language
that is representative of the Model Impact Fee Ordinance.1 Second, they are similar in that they
are both representative of many school impact fee ordinances in Florida. Third, however, they
are dissimilar in that the Hillsborough fee is $195.95 per household whereas the Orange County
fee is $7,000 per household. This difference provides a good means for determining the fairness
of the respective fees.
Orange County, FL Impact Fee Ordinance
On March 8, 2005, Orange County, FL enacted its latest school impact fee.2 The
1 Model Impact Fee Ordinance, Article 22-1, Section 22-109 (1988/1989).
2 Orange County Impact Fee Ordinance (2006).
ordinance's provisions and language are comparable to the Model Impact Fee Ordinance. The
Orange County ordinance requires that builders of new residential dwelling units must pay an
impact fee, at permitting, for the cost of required new educational facility construction. The
builder must pay $7,000 per new single family home. As a reference point, this amount is about
3% of the $242,000 average home price in Orange County.3 The ordinance provides an
alternative calculation method if the builder can show that the actual impact of his or her
dwelling units is less than the impact estimated by the economic and population study. Of
particular interest to this study, however, are the exemptions to the fees.
Exemptions are situations whereby builders of new dwelling units are not required to pay
the impact fee. The Orange County ordinance contains six exemptions, four of which are for
instances where the new residential building activity would not create any new dwelling units.
Exemptions under Section 23-161, Subsections (1) and (2) are given for the expansion of
existing structures or construction of accessory buildings that would create no new dwelling
units. Subsection (3) exempts replacement of an existing dwelling unit and Subsection (4)
exempts mobile home tie-down permits where the impact fee has been previously paid. Under
these four exceptions, the ordinance recognizes that there are certain residential building
activities that do not create the need for additional educational facility construction.
A fifth exemption is for construction of new senior housing as defined under the federal
Fair Housing Act .4 Different from the four above, this type of building activity does produce
new residential dwelling units. However, this exemption is based upon the assumption that this
3 Orlando Regional Realtor Association (2006).
4 Senior housing that prohibits permanent residence by persons under the age of 18 by recorded deed restriction,
recorded declaration of covenants and restrictions, or recorded plat restrictions and which qualifies as one of the
three types of communities designed for older persons that are exceptions from the prohibitions of discrimination in
the Fair Housing Act, 42 U.S.C. et seq.
type of residential building activity will not produce the need for any additional new educational
facility construction. It is assumed that new qualified senior housing communities will not create
any additional student-age residents and, hence, not create any need for additional educational
A sixth exemption for government-owned residential construction, however, is not based
upon the premise that no additional dwelling units will be created nor that new educational
facility construction will be necessitated by the new additional dwelling units. Rather, this
exemption simply grants a blanket exemption for government-owned residential construction
with no other constraints.
Hillsborough County, FL Impact Fee Ordinance
Hillsborough County, FL enacted its updated school impact fee in April of 2000.5 Like
Orange County's ordinance, Hillsborough's provisions and language are comparable to the
Model Impact Fee Ordinance. Hillsborough County's ordinance is a large and comprehensive
and should be considered one of the most sophisticated impact fee ordinances existing. The
ordinance's economic and population support comes from the adopted two-phase study entitled
Comprehensive Impact Fee Study released in two parts in March and April of 2004.6
Similar to the Orange County ordinance, the Hillsborough County ordinance provides that
builders of new residential dwelling units must pay an impact fee, at permitting, for the cost of
required new educational facility construction. The builder must pay a proportionate share of the
cost of the new educational facility construction necessitated by his or her proposed new
dwelling unit. Hillsborough school impact fees are currently a $195.95 for a single family home.
5 Hillsborough County Consolidated Impact Assessment Program Ordinance (2006).
6 Duncan and Associates, in association with James C. Nicholas, Comprehensive Impact Fee Study (I" I14).
As a point of reference, this amount is .05% of the $272,175 average existing single family home
price in Hillsborough County.7 Intense debate surrounds this relatively trivial amount, and the
fees are likely to increase substantially in the near future.
As in Orange County, the ordinance provides an alternative calculation method if the
builder can show that the actual impact of his or her dwelling units is less than the impact
estimated by the economic and population study. Again, of particular interest are the exemptions
to the fees. Unlike the Orange County ordinance, however, Hillsborough's fees include an
exemption for residential construction when the builder is providing low income housing.
The Hillsborough County ordinance contains seven exemptions, six of which are for
instances where the new residential building activity would not create any new dwelling units. A
seventh exemption is for government-owned residential construction. Again, like the Orange
County ordinance, this exemption assumes that government-owned housing will create new
school capacity need but grants a blanket exemption none-the-less.
Distinguishing itself from the Orange County ordinance, the Hillsborough County ordinance
contains an exemption for construction of new affordable housing. While the affordable housing
builder or developer is exempted from the impact fee, the county does not forfeit the fee. Instead,
an equivalent fee is transferred from the Municipal Service Tax Unit (MSTU) Fund. An MSTU
is a taxing district authorized by State of Florida Constitution Article VII and Florida Statute
125.01.8 The MSTU is a legal and financial mechanism for providing specific services and/or
improvements to a defined geographical area. An MSTU may levy ad valorem taxes to provide
funds for the improvements within the geographical area. With the MSTU paying the fee, the
7Greater Tampa Area Realtors Association (2006).
8 Florida Constitution, Article VII 9(a)(b) (2006) and Florida Statutes 125.01(2)(q) (2006).
cost of the new school construction is shifted. The cost is shifted from the low income
households to higher income households within the same MSTU.
Summarizing this section, Orange County and Hillsborough County school impact fee
ordinances were chosen for analysis for three reasons. First, the ordinances are similar in that
they contain provisions and language that is representative of the Model Impact Fee Ordinance.
Second, they are similar in that they represent of many of the characteristics found in all school
impact fee ordinances in Florida. Third, the ordinances differ in that the Hillsborough is currently
$195.95 per three-bedroom, single family detached household whereas the Orange County fee is
$7,000 per single family household.9 This significant difference provides a numeric basis for
inquiry as to whether one, both, or neither are fair.
Philosophies and Disciplines on Fairness
We will now look at the fairness criteria against which to analyze the two selected impact
fee ordinances. This represents nearly five thousand years of inquiry into the question of fairness.
9 Both Orange County and Hillsborough County ordinances require payment of an impact fee for multi-family and
mobile home dwelling units in addition to single family dwelling units. Orange County's fees for these types are
$3,807 and $4,104 respectively and the Hillsborough County Fees range respectively from $8.54 to $236.62 and
from $56.56 to $285.98 depending upon the number of bedrooms. The range of impact fees for single family
detached in Hillsborough County ranges from $63.50 for a two-bedroom dwelling to $488.05 for a five-bedroom
dwelling. The fee of $195.95 for a three-bedroom, single family detached was selected because three-bedroom,
owner-occupied, single family detached is the most prevalent form of residential households in the Tampa-St.
Petersburg MSA according to the 1998 U.S. Department of Housing and Urban Development American Housing
Survey for the Tampa-St. Petersburg Metropolitan Area, page 19. Three-bedroom single family detached also
logically corresponds to Orange County's blanket designation of Single Family Detached House that forms that
county's basis for its non-multi-family and non-mobile home category. Orange County does not make a distinction
for the number of bedrooms within the single family detached category. While Hillsborough County distinguishes
between the number of bedrooms within the single family detached category and requires different fees for each
category and both counties distinguish between single family detached, multi-family and mobile home, these fees
are not otherwise different for the purpose of determining their fairness. The categories of fees within each county's
fee ordinance are based upon relatively minor differences in the projected need for additional infrastructure that each
different residential land use type will necessitate. All of the fees in each category are similar in scale. For instance,
while there are some greater disparities, the Hillsborough County fees for a three-bedroom dwelling unit are
approximately: $196 for single family detached; $178 for multi-family residential; and $237 for mobile homes.
Thus, in general, differences in fees for the different dwelling unit categories are based upon their relatively minor
difference in projected impact and are not considered so disparate as to require separate fairness analysis. Therefore,
the fee for three-bedroom, single family detached is used as the representative fee for both counties.
Plato on Fairness
Prominent modem philosopher Alfred North Whitehead remarked, "[t]he safest general
characterization of the Western philosophical tradition is that it consists of a series of footnotes
to Plato."10 While Plato wrote on a wide array of philosophical issues, this section will focus on
Plato's notions of fundamental fairness.
Republic provides elements of Plato's fundamental political philosophy." Plato uses the
Greek word dikaisyne for fairness. Dikaisyne comes very near to the meanings of morality or
righteousness and connotes a positive duty of man or a metaphysical virtue.12 It covers the whole
field of the individual's conduct in so far as it affects others. Plato contended that fairness is a
quality of the soul, a virtue in which men set aside the desire to taste every pleasure and to get
selfish satisfaction out of every object.
To clarify his own idea of fairness, Plato first uncovers various other prevalent views. In
the Republic dialog, we see one character's description of fairness as giving to those that which
is due to them. Plato criticizes this notion of fairness by connoting that it is not fair to give a
psychopathic killer his weapon back.
A second actor comes along with an augmented view of fairness. He asserts that justice is
doing good to friends and harm to enemies. Plato emphasizes that fairness is a virtue and that
virtues are, by their elemental nature or essence, good. He posits that good can only come from
good actions and truly good actions lead only to good results. Doing evil to anyone, including
one's enemy, is inconsistent with the most elemental definition of fairness.
10 Alfred Whitehead North, Process and Reality: An Essay in Cosmology, David Ray Griffin and David W.
Sherburne, eds. (1979) at 320.
1 Plato, Republic, Benjamin Jowett trans. (2005).
12 See D. R. Bandari, Plato's Concept of Justice: An Analysis (2005).
A third actor arrives with another construct of fairness. Fairness to this actor is simply the
application of power by those who have power. This philosophy can be expressed in the maxim:
might makes right. Under this definition, it is fair for the powerful to exert their personal desires
upon the weaker masses simply because the powerful own the power and have a right to use it. In
interpersonal relationships, this form of fairness can be expressed when a bully child takes candy
from a more passive and weaker group of children. On the societal scale, it is expressed when
laws or government action are made by, and for the benefit of, the powerful few.
Again, Plato criticizes this view of fairness. Plato uses the analogy of a physician with his
or her patient. He argues that a physician exercises his power not in his or her own interest but in
the interest of a patient. Likewise, he argues that the rulers should do what is good for the people
for whom they exercise their governing power over. Plato characterizes fairness by observing
that injustice creates divisions and hatreds and fighting, and justice imparts harmony and
Plato and School Impact Fees
A tenet of Plato's conception of fairness is that it is the natural role of the more powerful to
use his or her skill, intelligence and wealth to insure that society's systems and interactions are
fair. His ultimate conclusion is that fair systems and interactions will result in harmony and
friendship. This philosophy is found in the modern premise that a society that provides universal
free education is peaceful and that a society void of free universal education creates unfavorable
conditions. This view is confirmed in recent studies.
Laynard's 2005 study found that, while educational level does not directly correlate to
happiness, increased education leads to an increased ability to learn and an increase in this ability
directly correlates to an increase in happiness.13 This theory indicates a correlation between
education and happiness in the individual. Following, the less educated are less able to
constructively engage in activities that lead to their happiness. Following the allegory of the
physician and patient, Plato would find unfairness where the powerful and knowing in society
fail to enable the weaker and unknowing to engage in activities that lead to happiness as a result
of failing to provide education. In this analogy, parents represent the powerful and knowing and
school aged children represent the weaker and unknowing.
As to society, Eisenberg and Martinez's 2000 study found a strong correlation between the
lack of education and crime.14 The study found that the prison population of the United States is
about 1.5 million and that the typical offender is uneducated. Of these prisoners, 19% are
illiterate and up to 60% are functionally illiterate as compared to 4% and 23% respectively for
the national adult population. The study concluded that prison education is far more effective at
reducing recidivism than other methods. Further, a 1999 Taxwatch study concluded that for
every $1 Floridians spend on education, Floridians save more than $2 on prison costs.15 These
studies suggest a strong correlation between education and unfavorable and costly condition of
criminal behavior. If we look at Plato's determination that divisions and violence are the result of
injustices in society, differences in education might be elements of unfairness that foster these
negative societal characteristics.
Impact fees are an attempt to stave-off the problems associated with low educational
opportunity. Florida counties are pressured to provide free education to a growing population of
13 See Richard Layard, Happiness: Lessonsfrom a New Science (2005).
14 See Michael Eisenberg and Alma I. Martinez, Impact of Educational Achievement of Inmates in the Windham
School District on Recidivism (2000).
15 Taxwatch and the Center for Needs Assessment and Planning, Return on Investment for Correctional Education in
children with less money from ad valorem taxes, intergovernmental transfers, and other historic
sources. Impact fees are being used to force those residential developments adding this pressure
to pay for the infrastructure. Impact fees, as an augmentation to general taxation, fall under
Plato's allegory of the physician patient relationship whereby the equipped physician is the fee
payers and the patient is unequipped school-aged children. School children are not in a position
to administer their own education whereas the fee payers are in a position to provide education to
the children. These impact fees restore the financial connection between the payers and school
children that is being eroded away by other inadequate means of public school finance.
Aristotle on Fairness
Aristotle's Nicomachean Ethics is an early treatise on, among other things, concepts of
fairness.16 In the broadest sense, Aristotle finds that all of man's pursuits aim at a Supreme
Good. Aristotle equates the Supreme Good with happiness and the term he uses is the Greek
eudaemonia.7 Eudaemonia's meaning differs somewhat from our modem English word
happiness. The English happiness comes from the root 'hap' meaning by chance or fortune as in
the word happenstance.18 Eudaemonia, alternatively, connotes purposely living well or a life
Aristotle posited that happiness comes through a person's purposeful personification of
virtues. Virtue is a state of character that has been developed through the practice of righteous
actions. The righteous actions then become a characteristic of the person practicing them.19 In
society, the collection of virtuous people results in a society that is closer to the supreme good.
16 See Complete Works ofAristotle, The Revised Oxford Translation, Jonathan Barnes ed. (1984).
17 Definition of Eudaemonia obtained from Word Reference Online (2005).
18 Definition of Happen obtained from Merriam-Webster Online (2006).
19 See Aristotle, Nicomachean Ethics, Book V, David Ross ed. (1980).
Aristotle viewed virtues as a mean between two extremes of vices. For instance, Aristotle
identifies the virtue of courage as the mean between cowardice and brashness. He saw the virtue
of fairness as a mean between the two extremes of gaining more than one's fair share and
gaining less than one's fair share. In his discussion of wealth, he thought that people should be as
liberal as possible when spending upon the public good. In fact, for wealthy individuals,
Aristotle found fairness in wealthy persons financing expensive public services, equipping
villages, or erecting statues. Such giving is voluntary but virtuous and leads to happiness for the
giver and the community. Likewise, the virtue of fairness is manifested through the less wealthy
receiving the voluntary contributions of the wealthy. In this scheme, fairness is the mean
between getting too much and getting too little.
Aristotle and School Impact Fees
Aristotle's idea of fairness is closely linked to an arithmetic mean between the extremes of
getting too much and getting too little. This notion led to his conclusion that a relatively
proportional distribution of wealth is fair. That is, while it is natural for some to have more and
some to have less, it is fair for those with more to spend more on the public while it is equally
fair that those with less receive more from the public.
Impact fees, as an augmentation to general taxation, find support in Aristotle's ideas. The
effect of the fees is to place some of the cost of new school construction upon those causing the
need for new construction. If new residents don't pay some of the cost of their children's
additional impact upon public school infrastructure the result is the extreme position where the
new residents are receiving from the public good without recompensing for their children's
impact. Alternatively, if the new residents are required to pay only for the impact that their
children have on the public schools the result is the extreme where only those who have children
in public schools pay for public schools and free public education is lost. Orange and
Hillsborough County impact fees are the mean between these extremes. When combined with the
existing forms of public school finance, these fees shift more of the cost of additional
infrastructure to the new residents but do not go so far as to reconfigure public school finance to
a user pay system. In this way the fees are a mean between two extremes and fair.
Further, both fees contain an exemption for construction of government housing. So
government housing, even though it will generate additional school infrastructure, is not required
to pay for the impact of the additional school children. These exemptions comport with
Aristotle's idea of fairness whereby those with more give more to the public good for those with
less to consume. Government housing has means testing that is designed to screen-out higher
income residents so government housing is occupied by less wealthy. By not requiring
government housing developers to pay impact fees, the cost of new school infrastructure is
disproportionately shifted to those new residents who must pay the fee. This disproportionate
result however is reconciled by the disproportionate wealth between the two income groups.
Aristotle found it fair for the wealthier to give to the public good, and public education is
considered a vital public good for the reasons discussed earlier. These reasons include the
production of a citizenry that understands and values principles of a representative republic,
develops job skills to compete in an increasingly complex economy, and is less likely to choose a
life of crime.
In summary, both Plato and Aristotle begin with the premise that when individuals practice
fairness, the result is a peaceful and happy society. Plato envisions fairness similar to the
physician/patient relationship. Aristotle places the virtue of fairness as a mean between extremes.
It is also fair for those with greater wealth to spend more on public works, and it is likewise fair
for those with less wealth to use the benefits created through the state.
Social Contract Theorists on Fairness
Social Contract Theory is the philosophy that a society is fair, happy and peaceful only
when an individual's obligations are dependent upon an agreement between that individual and
other individuals as a society. Elements of Social Contract Theory can be gleaned from the
teachings of the ancient philosophers but its modern expression emerges through Thomas
Hobbes. Thereafter, the philosophy is fully established by John Locke and Immanuel Kant.
Social Contract Theory remains highly influential in Western Thought.
Thomas Hobbes explained fairness through social contract theory. He begins with the
premise that, in the natural state, the basic motive of human activity is self-preservation.20 Also,
in the natural state, power is distributed relatively equally.21 Hobbes' contends that natural rights
(rights that are self evident and self-authorizing) arise out of the natural condition of mankind
whereby, while some people may have more strength or intelligence than other people, no person
is strong or smart enough to be beyond the common fear of a violent death.
When confronted with the threat of a violent death, a person in the natural state will go to
any length to defend him or herself. Self-defense against violent death is the highest human
necessity and, because self-defense is a necessity, the right of a person to defend one's self is a
Hobbes also theorized that people have an equal right to necessary property. However,
because of the scarcity of tangible things, and in the absence of a common power to keep people
in awe, the result is a condition called warlike state of existence. Therefore, if any two people
20 Anthony Gottlieb, Dream ofReason: A History ofPhilosophy from the Greeks to the Renaissance (2000) at 429.
21 See Thomas Hobbes, Leviathan, originally published in 1651 (2i '4).
desire the same thing, which nevertheless they cannot both have, they become enemies and fight.
Under this chaos of man's self-defense against a violent death, self-interest, and equal claim to
property cause a dismal life that is a permanent condition of dangerous social unrest.
Hobbes found that people have a self-interested desire to avoid the horrible state of nature
because it is so futile. To avoid this horrible state, society creates a social contract. Under such a
contract, individuals acknowledge that they are surrendering some of their natural right to an
absolute sovereign so to ensure internal peace and a common defense .22
Locke followed Hobbes in the social contact tradition. However, Locke's natural state is a
condition of complete liberty to conduct one's own affairs as one sees fit and free from the
interference of others. People are free to do as they see fit so long as they don't violate the Law
of Nature. The Law of Nature, which forms the basis for Locke's morality, is established by God
and requires that people do not harm others with regards to their life, liberty, health, limb, or
goods.23 Locke assumes that all men belong equally to God and are, therefore, God's property.
Therefore, because someone cannot rightfully take from God what is God's, it is wrong to take
from others or to harm others. Following, Locke's state of nature is a peaceful state where people
can pursue their own interests free from interference and also free from the fear that others will
take their life, liberty or property.
Locke found that in practice, however, the Law of Nature is ignored and war ensues.
Therefore, government is necessary. Locke also believed that government can be created only by
the consent of the governed. Thus, Locke saw the only answer as the creation of a social
22 Robert E. Goodin and Phillip Pettit, Companion to Contemporary Political History (2000) at 380.
23 See John Locke, Second Treatise of Government, Part 11-6, originally published in 1690 (1986).
contract. That is, society consenting to be governed under a commonwealth of laws to protect
each person from immoral acts of other people. Locke posited that all who enter the social
contract agree that the terms and conditions of the social contract are fair because they are freely
entered into and are necessary for the protection of the individual and society. Locke's theories
are influential in the American political system and on the doctrine of property rights.24
Immanuel Kant revolutionized the foundation of social contract theory, changing it from a
science directed toward achieving a pre-given (i.e. God-given or natural) good into an inquiry
into the way free agents govern their own lives according to self-given rational principals.25 Kant
developed a theory of a central moral obligation, from which all other moral obligations
originate. He called this obligation the Categorical Imperative. The Categorical Imperative says
"[a]ct as if the maxim of your action were to become through your will a universal law of
nature."26 Kant applied this concept to society, "Right is ... the totality of conditions, under
which the will of one person can be unified with the will of another under a universal law."27
Under the Categorical Imperative, Kant harmonized rationality and fairness. More
succinctly, Kant found that humans understand that it is smart to act fairly so humans form
societies based upon fair rules. Therefore, it is fair for the individual to acquire and own private
property so long as the acquisition and ownership resonate with society's construction of a fair
distribution of private property under the Categorical Imperative.
24 John Ferling, .i ma, the WorldAblaze: Washington, Adams,.. i .. -a and the American Revolution (2000) at 81-
25 See Alan W. Wood, Basic ;T; ar,,', of Kant (2001).
26 Immanuel Kant, Groundwork of the Metaphysics of Morals, originally published in 1785 (1964) at 70.
27 Immanuel Kant, Metaphysics of Morals, originally published in 1797 (1999) at 344.
Summarizing this section, Hobbes and Locke envisioned individuals as incapable of
defending property or liberty in the State of Nature. Following, the social contract is the only
way to reconcile individual property rights with property protection. This philosophy constructed
a scheme of fairness whereby individuals surrender some private rights to a powerful sovereign
so that the strong sovereign can protect individuals' property rights.
Kant also saw fairness in the context of social contract theory. Kant theorized a Categorical
Imperative where each individual acts in a manner as if the individual would want the action to
become universal law. Fairness in Kant's philosophy is a resonance between an individual's
actions and that individual's definition of an acceptable result under the Categorical Imperative.
Social Contract Theory and School Impact Fees
The fairness of impact fees as an augmentation to general taxation is supported by social
contract theory. The most important element of social contract theory with respect to impact fees
is an intergenerational cost/benefit connection whereby older generations bear the economic cost
of education but also reap the economic benefits of an educated citizenry. Whether financed by
parents or the government, the education of the younger generation has always been viewed as
essential to the well-being of society. Hobbes and Locke theorized that individuals must give up
some property and liberty to the government in order to stave-off chaos. With respect to free
public education this theory would support contributing to the education of every child to avoid
the pitfalls of an uneducated society. Uneducated children have neither the workforce skills nor
the values needed to benefit the society in which they are thrust. Hobbes and Locke would find
fairness in the impact fee payers giving up their property (money) for the protections and
benefits of an adequately funded public educational system. Consistent with social contract
theory impact fees, coupled with existing funding sources, make an intergenerational connection
between the payers and school children. This intergenerational connection provides that the
payers pay their proportionate share of the cost of additional school infrastructure and that school
children, in return, provide the protections and benefits that result from the application of their
Used alone rather than an augmentation of the existing general taxation scheme however,
impact fees become strictly user fees. In a strict user fee scheme there is a precise connection
between the payment made and the government benefit received. Therefore, the elements of
fairness that are imputed by social contract theory through general taxation are negligible. The
result is that an impact fee only scheme has no elements of social contract theory and is unfair.
Kant perfects social contract theory by identifying fairness in the abstract notion of doing
only that which the individual would want as a universal law. It would seem that every child, no
matter what means they have, would at least want the opportunity and option for a free
education. Conversely, there is a strong propensity for payers to not want to pay taxes or fees.
The question then remains, how can Kant's theory reconcile these opposing forces? Kant's
Categorical Imperative provides guidance.
Kant forces the thinker to act in a manner whereby he or she would want his or her actions
to define fairness. Therefore, payers must make the judgment of which scheme is fair: paying for
a relatively proportionate share of additional public school cost or reducing the availability of
free public education. From the payer's perspective, he or she might think that paying for the
additional cost is unfair. However, the Categorical Imperative requires that these payers think
from the position of the student who can only gain education through free public schools. It
would follow from this opposite perspective that the thinkers would think it fair that they be
afforded the same educational opportunity as other children. If fairness is then defined as acting
as if one would want their actions to become universal law, then the impact fees are fair.
The Categorical Imperative also supports impact fees' fairness as an augmentation to
existing general taxes. Consider an existing household and a newly developed household. Under
a general taxes only scheme, the new households would not be required to pay the incremental
cost of newly necessitated school infrastructure. If the new householders thought through the
Categorical Imperative they would, from the perspective of the existing householders, think it
unfair to pay for additional infrastructure that is needed through no action of their own.
Similarly, from the perspective of the new householders, the existing householders would think it
unfair that they are benefiting from new infrastructure for which they did not pay a proportion of
the cost. Again, the households must think from the perspective that their actions will become
universal law. In other words, what comes around goes around. In this case, all of the thinkers
would determine that a general tax only scheme is unfair.
As determined previously, an impact fee only scheme is unfair because it disrupts the
intergenerational social contract. Therefore, both a general taxation only and an impact fee only
scheme are equally unfair. Impact fees as an augmentation to existing general taxation emerges
as the fair public school finance scheme.
Summarizing this section, impact fees, as an augmentation of general taxation, are fair
under social contract theory. Hobbes and Locke would find fairness in these fees because the
payers are entering into an intergeneration agreement whereby the payers exchange property for
the protections and benefits of an educated citizenry. The fees are also fair under Kant's
Categorical Imperative in that, if the payers act as if their actions defined fairness, the payers
would pay the impact fees (in the fee's role as an augmentation to the existing general taxation
scheme) and agree that paying the fees is fair.
Utilitarianism on Fairness
Originating in the mid-Eighteenth Century, Utilitarianism is a philosophy of fairness that
remains highly influential in political thought today. In fact, Utilitarianism is so influential that
Contemporary philosopher John Rawls (discussed later) revealed that his intention for writing
Theory ofFairness was to work out a conception of [fairness] that provides a reasonably
systematic alternative to utilitarianism which, in one form or another, has long dominated the
European and American tradition of political thought.28 Put roughly, Utilitarianism posits that it
is fair to distribute goods where the scheme creates the greatest happiness for the greatest amount
of beneficiaries. Utilitarian thought was popularized by Jeremy Bentham and later modified by
John Stuart Mills.
Jeremy Bentham believed that actions and institutions should be judged by the sum of their
relative contribution to happiness as opposed to pain. In other words, a fair outcome is one that
provides the greatest happiness of the greatest number.
Under his Greatest Happiness Principle, Bentham notes that, natureue has placed mankind
under the governance of two sovereign masters, pain and pleasure. It is for them alone to point
out what we ought to do."29 In the context of government policy, Bentham argues that the
fairness is achieved when a policy collectively produces the most happiness for the most
individuals and the least amount of corporate pain.
28 See John Rawls, Theory ofJustice (1999).
29 Jeremy Bentham, Introduction to the Principles ofMorals andl.. _i,li. I a1 originally published in 1789 (1907) at
John Stuart Mill
Mill augmented Bentham by allowing for a stratification of pleasure and rejecting
Bentham's strict application of egoism. Bentham's simple egoistic (selfish) definition of
pleasure was relatively restricted to the more basic pleasures such as an abundance of material
things. Mill, however, allows for more types of pleasures and ranks pleasures in a hierarchy. He
places a greater value in pleasures like contentment and appreciation than in more base human
pleasures like an accumulation of goods or power over other people. Therefore, Mill places a
higher value on the pleasure gained from helping to increase other 's pleasure whereas Bentham
only valued the pleasure gained from self gratification.
Like Bentham, Mill believed that each person seeks his or her own pleasure. However,
Mill believed that persons could be trained to find pleasure in the pleasure of others.30 In the
broader sense, Mill's utilitarian calculus brings in additional values on the pleasure side of the
equation. For instance, if a tax is levied against wealthy persons to insure the education of
children from lesser means, Bentham's calculus would look at the pain that the tax caused times
the number of wealthy taxpayers. He would compare that product against the pleasure of the
recipients times the number of recipients. Mill's calculus follows Bentham's but also factors-in
the pleasure that the taxpayers derive from the recipient's satisfaction from a good education.
In summary, utilitarianism remains a major philosophy in America. This philosophy
asserts that fairness results when an action produces more overall pleasure than pain. Mill
expanded upon Bentham's definition of pleasure to include the pleasure derived from helping
others to experience pleasure.
30 See Oliver A. Johnson, Great Thinkers of the Western World, Ian P. McGreal ed. (1992).
Utilitarianism and School Impact Fees
Mill's utilitarianism supports the fairness of impact fees as an augmentation of general
taxation. When initially analyzing impact fees under Bentham's utilitarianism, the fees might not
appear fair. For instance, new upper and middle income neighborhoods could create new schools
in their neighborhoods through impact fees. These schools, in turn, provide their children the
knowledge and skills necessary to enter the workforce and earn an upper or middle income
lifestyle. Simultaneously, lower income citizens might be unable to move and remain stuck in
lower achieving schools. Bentham's utilitarianism might find this scenario fair because the
product of the increased happiness of the first group is greater than the product of the pain of the
second. Although fair under Bentham's utilitarianism, this scenario does not resonate with other
fairness schemes because of unequal opportunity for education.
Careful consideration of the inputs into the utilitarian equation might overcome this
dissonance though. As discussed earlier, lack of education causes negative externalities such as
criminal activity and social unrest. In turn, these conditions reduce happiness and increase pain.
Theoretically, the pleasure derived from a society free of these negative externalities should be
factored into the pleasure side of the equation. Reduction or elimination of negative externalities
would therefore add to the impact fee payer's pleasure.
Mill's extension of Bentham's equation allows for imputation of pleasure derived not
only from egoistic elements but also from helping others to find pleasure. This extension allows
for the imputation of the pleasure that the Payers obtain by helping children gain the pleasures of
education and increases the overall value for pleasure.
Viewed in this light, impact fees are supported by the utilitarian equation. The
exemptions for government and low income housing might initially render the fees unfair
because the pain of paying the fees gets shifted from the government and low income residents to
the other residents. However, when the pain side of the equation is reduced through a reduction
of negative externalities (less crime, etc.) and the pleasure side is increased by the payer helping
others to experience pleasure, the utilitarian equation finds impact fees fair.
In summary, Bentham and Mill envisioned a calculus for determining a fair outcome when
overall pleasure is greater than overall pain. Bentham's equation scaled pleasure and pain
quantitatively. Mill expanded Bentham's foundational formula by scaling pleasure and pain
qualitatively. Mill also allowed for pleasure derived from other's increase in pleasure. At first
impression, utilitarianism does not resonate appear to resonate with the other fairness schemes in
that it allows for differences in educational opportunity to pass as fair. Careful consideration of
inputs to include Mill's expanded criteria resolves this dissonance. When Mill's extended criteria
is included, impact fees are fair as an augmentation to general taxation.
Contemporary Political Philosophers on Fairness
Contemporary political philosophers continue The Great Conversation. John Rawls and
Robert Nozick oppose each other on basic concepts of fairness. John Rawls builds upon the work
of the social contract philosophers while Robert Nozick upholds an opposing libertarian view. In
the context of contemporary academia, these two philosophers are often read together to examine
the opposing philosophies.
As stated earlier, Rawls' purpose for developing his theory of justice was to work out a
conception of justice that provides a reasonably systematic alternative to utilitarianism, which, in
one form or another, has long dominated the Anglo-Saxon tradition of political thought.31 Rawls
argues that fundamental fairness is found when starting philosophical point of viewis one of
31 See Rawls, supra note 28.
absolute impartiality. Rawls calls this position the Original Position. He asks the thinker to
participate in a thought experiment whereby his or her idea of fairness is conceptualized from
behind a Veil ofIgnorance.
From behind a Veil of Ignorance, each thinker is denied any particular knowledge of
other's individual circumstances, including his or her own. For instance, no thinker would be
aware of anyone else's social status, age, gender, race, talents, or any particular political or
philosophical leanings. Rawls also assumed that thinkers starting from this Original Position are
rational and disinterested in one another's well-being. From this Original Position and under a
Veil of Ignorance, Rawls argues that the thinkers can choose principles of fairness which are
themselves chosen from initial conditions that are inherently fair. Further, because each
individual thinker is veiled from any knowledge that could be used to develop principles that
favor his or her own particular circumstances, the principles that the thinkers would choose from
such a perspective are necessarily fair.
From a collective perspective, everyone in a given community or society is in the same
situation and presumed equally rational. Because everyone theoretically adopts the same method
for choosing the basic principles for society, everyone would agree upon the same principles of
fairness. Under Rawls' theory of fairness, any one person would reach the same conclusion as
any other person concerning the most basic principles of a fair society.
Rawls posited that two principles of fairness would result from this morality. Rawls' first
principle provides that each individual in a society should have as much liberty as possible so
long as every other individual is granted the same liberty. According to this principle, each
person must be granted the maximum amount of civil liberties without depriving others of civil
liberties. The second principle provides that economic goods and social positions must be open
to access by all persons. This principle connotes equal access and mobility between positions and
classes. Contrasted against utilitarianism, which allows the least advantaged to be worse off if
the sum of the benefits to the whole of society produces more overall happiness, Rawls' principle
provides that economic and social inequalities are only justified when the least advantaged
member of society is nonetheless better off than he or she would be under an alternative
Rawls partially bases his idea of fairness on a dissonance between rights to private
property and the unequal distributions of wealth that result from unrestrained capitalism.32 Thus,
Rawls asserts that fairness cannot exist where participants are not willing to allow for the
government to tax and redistribute of wealth.
Rawls and impact fees
Impact fees are supported by Rawls' scheme of fairness in the Original Position under a
Veil of Ignorance. Rawls would require that everyone clear his or her mental slate and begin to
think of what is fair without any prejudicial reference point. This means that both prince and
pauper must contemplate what is fair without the benefit of knowing his or her current condition
or history. In this thought experiment, the prince does not know that he is a prince and must
concoct a scheme to provide for his educational opportunity. To insure his opportunity, the
prince would design a system of free public education. Conversely, the prince must also think of
what is fair for the person paying for the public education. From this perspective, he would
choose a system that insures that each pays no more than a proportionate share of the cost of
financing the education.
32 J. Waldron, Right of Private Property (1980) at 5.
Similar to Kant's scheme, Rawls Original Position requires that the fee payers judge which
scheme is fair: paying for a proportionate share of additional public infrastructure or reducing the
availability of free public education. Again, from this perspective, he or she might think that
paying for additional infrastructure is unfair. However, if the payers judge from the perspective
of the student who can only gain education through free public schools, these same payers would
think it fair that they be afforded the same educational opportunity as other children.
The government housing exemption in the Orange County fee and the government and low
income exemptions in the Hillsborough County fee embody the Rawlsean definition of fairness.
These exemptions mimic the role of general taxation and afford the children of lower income
households a similar opportunity for education as do those children of higher income households.
The exemptions shift the burden of paying for the new facilities from lower income households
to the higher income households. The higher income households might instinctively find this
shifting of burden unfair. However, if viewed from the Original Position under a Veil of
Ignorance, these same higher income households would find the burden shifting fair.
Robert Nozick criticizes Rawls' position through his version of Libertarian philosophy.
Libertarian ideas of fairness emphasize the primacy of private property and a rejection of
government intervention in an individual's decision regarding his or her property. Nozick
equates redistribution of wealth through government tax and spending with slavery.33 Nozick's
definition of private property follows Locke in that it is fair for a person to claim as his or her
own property that which he or she has commingled his or her labor with. Accordingly, Nozick
finds no fairness in a system that takes a person's property or labor and redistributes it to others
33 Robert Nozick, Anarchy, State and Utopia (1975) at 169.
when the others have not imputed the same labor into the property. This reasoning posits that
private property is the fair reward or dessert for one's labor. It similarly posits that it is unfair to
take the desserts from one laborer and give it to another.34 Thus, Nozick finds it unfair to
construct a mechanism that removes wealth from those who labored for it and redistributes it to
those who didn't labor for it.
Although Nozick opposed Rawls' vision of fairness, his opposition is more accurately
directed to government's taxation power. General ad valorem real estate taxes are involuntary
and charged to both existing and newly created residential units. Alternatively, Orange and
Hillsborough impact fees are fair under Nozick's scheme because they are voluntary. Because
the impact fees are attached only to newly-constructed residential units, the fees can be avoided
by simply choosing not to purchase a new residential unit.
Alternatively, the fees can be avoided by using the alternative calculations methods
contained in the ordinances. Both ordinances contain provisions where new residential
development can avoid the fees by insuring that adequate school infrastructure will be provided
by the developer. These alternative calculations generally are used by larger scale developments
rather but are none-the-less available to individual purchasers within the larger developments.
Summarizing this section, vigorous debate about fundamental fairness continues amongst
contemporary philosophers. Rawls' position is that fairness can only be achieved if each actor in
society resets his or her consciousness to the Original Position. From this perspective, Rawls
argues that actors can choose principles of fairness which are chosen from initial conditions that
are inherently fair. Rawls found that redistributions of wealth are fair so long as they arise from
the Original Position. Nozick opposed Rawls in that he found government redistribution unfair.
34 S.R. Munzer, Theory of Property (1990) at 7.
Nozick holds that it is fair for an individual to claim property as his or her own when that person
applies his or her labor to the property. Further, he reasoned that redistribution schemes are
unfair and tantamount to slavery.
Both of these positions support Orange and Hillsborough school impact fees in their
current role as an augmentation to existing forms of public school finance. Rawls' Original
Position supports the government exemption to both fees and the low income exemption to the
Hillsborough fee. Nozick's theory of fairness which is generally at odds with Rawls', none-the-
less supports the fees because the fees are voluntary. Therefore, the fees are fair under both
Rawls' and Nozick's theories.
Courts of Equity on Fairness
Courts of Equity arose from plaintiffs' assertions that the existing judicial process was
unfair. As the law became more structured and technical, plaintiffs found themselves unable to
overcome intransigent rules in favor of fair outcomes. Courts of equity arose as a forum for
litigants to gain remedies for wrongs and "will not [allow a party to] suffer a wrong without a
Concepts of Fairness in the Courts of Equity
The courts of equity originated in direct appeals to the conscience of the king under the
king's inherent judicial authority. Later, the king delegated this function to his chancellor who
was an officer of the Church. Therefore, early concepts of fairness in the courts of equity were
whatever the king or his chancellor deemed fair.36 Assuming that the king or chancellor refrained
from ruling in his self-interest, and assuming that the chancellor (who was also the king's
35 Michael Hanrahan and William T. Quillen, Short History of the Delaware Court of Chancery 1792-1992 (1993)
(citing Weinberger v. UOP, Inc., Del.Ch., C.A. No. 5642 (1985), slip op.) at 21.
36 F.C. Maitland and F.C. Montague, Sketch of English Legal History (1915) at 125.
confessor and a member of the clergy) studied in Christian monasteries, early concepts of
fairness were derived from Christian theology. However, there was no requirement that a
chancellor follow Christian doctrine.
As the courts of equity evolved, general rules of fairness replaced the personal
consciousness of each individual chancellor and the courts of equity began to follow general
principles of fairness.37 One general principle is that equity remedies unjust enrichment.38 For
example, if a mortgagor makes years of mortgage payments and then comes under hard times
and fails to make one of the last payments, a court of law might find a breach of contract and
allow the lender to repossess the property even though the mortgagor had nearly satisfied the
entire course of payments. Courts of equity, alternatively, might open opportunities for the
mortgagor to claim credit for the payments that he or she has made through the course of the
The principle that courts of equity remedy unjust enrichment gives insight into the court's
fundamental concept of fairness. Equity finds it unfair for one party to become enriched to the
detriment of another party. If a court of equity finds that one party benefits to the detriment of
another, the court will take from the unjustly enriched party and recompense the party that
suffered detriment. Alternatively, the court will restructure the arrangement to require fair
transactions in the future.
In summary, courts of equity will not let a party suffer a wrong without a remedy. One
facet of a court of equity's construct of fairness is the court's refusal to allow a party to become
unjustly enriched. Courts of equity take from one party and give it to the other as a remedy.
7 Walter Denton Smith, Manual of Elementary Law (1896) at 60.
38 Bernard Bailyn and Donald Flemming, Law in American History (1972) at 97.
Courts of Equity and Impact Fees
Orange and Hillsborough fees are fair under the theory of unjust enrichment from the
courts of equity. Controversy regarding impact fees is often rooted in opponents claiming that
the other is gaining a windfall through the fees. New households attempt to assert that, with
impact fees, they are paying what should be paid by all tax payers under general taxation and the
county is getting a windfall. Alternatively, without impact fees, existing households assert that
new households gain the windfall of new schools that were funded by the existing taxpayers. The
Orange and Hillsborough fees prevent a windfall on either side and thus prevent unjust
Implementation of impact fees void existing household's assertion that new growth is not
paying for the real cost of new infrastructure. New school capacity is paid for by new households
through impact fees and the additional burden is not placed upon existing households. With
impact fees, the existing households are relieved of the burden of financing new school
construction necessitated by the new households.
From the new household's position, Orange and Hillsborough County impact fees prevent
existing households from gaining a windfall because exemptions are granted for circumstances
where new households are not expected to cause a need for additional school construction and
offsets are granted for circumstances where the new households are providing their own schools.
One of the exemptions is for senior housing. Senior housing is not expected to house any public
school students so development that includes only senior households is not required to pay for
new school construction. This same issue was litigated in Aberdeen. By not requiring senior
households to pay school impact fees, the exemption prevents existing and new residents from
gaining a windfall at the expense of seniors. However, this exemption undermines impact fees'
fairness under social contract theory and other philosophies and disciplines examined. That is
why it is asserted that impact fees are not fair solely on their own but rather in the role of an
augmentation to the already existing school finance mechanism. Were impact fees to exist on
their own, seniors under the Orange and Hillsborough County ordinances would be exempted
from paying any of the cost of public schools, and seniors would gain unjust enrichment from the
benefits of an educated citizenry. However, because the impact fee ordinance augments an
already existing public school finance mechanism, and the exemptions only apply to the impact
fees, the Orange and Hillsborough County fees prevent unjust enrichment and are therefore fair.
Summarizing this section, the courts of equity arose to insure fairness in the outcome of
court disputes. A fundamental principle of courts of equity is that unjust enrichment is unfair. In
their current role as an augmentation to existing school finance mechanisms, Orange and
Hillsborough County impact fees are fair because they prevent unjust enrichment.
Psychology on Fairness
Psychologists study mental functions to arrive at theories of human thought. The
psychology of fairness will hereafter be explored.
Piaget's development of fairness
The study of the psychological development of fairness was pioneered by Jean Piaget.39
Piaget looked into the thought processes behind children's moral decision-making, concluding
that younger children differ from older children in the ways that they think about fairness. A
child's individual level of thinking development, along with informal interactions with other
children, determines how the child perceives fairness.
Piaget posited that preschoolers tend to think of fairness in absolute terms. He posited that
preschool children think an action is fair based upon their perception of absolute and sacrosanct
39 See J. Piaget, Moral Development of the Child, M. Gabain, trans. (1932).
rules and whether the action evokes punishment. Also, preschool children have difficulty taking
another person's view so their perception of fairness is based largely on what benefit they
receive from a given course of action. Piaget's work on younger children was followed by
Kohlberg's work on older children and young adults.
Kohlberg's development of fairness
Kohlberg classified moral development into stages which he believed were invariant and
hierarchical.40 That is, all people pass through the stages in sequence on a progression to higher
levels of moral thought. Kohlberg suggests, however, that some individuals get stuck somewhere
in the progression and never reach the highest levels of moral thinking.41
Like Piaget, Kohlberg believed that in order to move up the progression of moral thought,
individuals must possess the ability to think about moral issues in increasingly abstract ways. In
other words, an individual's ability to think in the abstract sets limits upon the individual's
ability to reason about fairness. He notes, however, that an understanding of fairness can be
fostered if the individual is regularly exposed to reasoning that is slightly higher than the level on
which the individual is reasoning. Exposure to slightly higher reasoning resolves cognitive
conflict and helps fairness thinking advance.
Kohlberg's important contribution is the expansion of the work of Piaget to include three
levels: preconventional, conventional, and postconventional. Preconventional and conventional
levels of thought pertain to children while postconventional thought is found in young adults.
When preschool children make decisions about fairness, Kohlberg asserts that those
decisions are based on avoiding punishment. Further, he discovered that preschool children find
that a fair decision is the one that satisfies the child's immediate desires. A child believes that it
40 W.C. Crain, Theories ofDevelopment (1985) at 118-136.
41 See Lawrence Kohlberg, Essays on Moral Development: The Nature and Validity of Moral Stages, Vol. II (1984).
is fair to take something simply because that child wants that something. A child at this age will
judge fairness based upon how a given decision will affect him/her without any consideration of
societal conventions of fairness.
At the conventional reasoning level, children lose their egoistic view of fairness and begin
to consider fairness in the context of working and living together with others. Children begin to
think in terms of pleasing others and doing what is helpful as their concern moves beyond self-
interest to the good of the group. Children are aware of societal conventions and see fairness in
terms of conformity with existing conventions or in terms of what will keep society moving
Finally, Kohlberg explained young adult's fairness rationale in terms of the young adult's
ability to reason beyond social conventions. In this postconventional level, older young adults
want to keep society functioning but they are also aware that a smoothly functioning society is
not necessarily a good one. For instance, they might reason that a totalitarian society might be
well-organized, but it is hardly the ideal of fairness. To fully develop their fairness rationale,
these thinkers must factor basic rights and democratic procedures into their fairness rationale. To
accomplish this, the thinkers begin to look at situations from the perspective of others. Therefore,
young adults at this level emphasize basic rights and democratic processes that give everyone a
say in the outcome of a matter.
Psychology and Impact Fees
Orange and Hillsborough County impact fees are fair under postconventional reasoning.
Postconventional thinking arrives at fairness by individuals looking at situations from the
perspective of others. Such thinking is the highest order of moral development and the gateway
to the thought experiments that Kant and Rawls prescribe. In order to enter into the thought
experiments of the Categorical Imperative and the Original Position, the thinker must be able to
see things from the abstract perspective of others. Following, the fairness found in social contract
theory is reinforced by Kohlberg's theory of postconventional thinking. This support of Kant's
and Rawls' theories is psychology's most important contribution to the objective.
Summarizing this section, Kohlberg found that moral development occurred in stages with
postconventional thinking as the pinnacle. Postconventional thinking is characterized by looking
at situations from the perspective of others. Kohlberg's postconventional thinking supports social
contract theory which, in turn, is an important element of the fairness of Orange and
Hillsborough County impact fees.
Sociology on Fairness
Sociologists observe sociological phenomenon and develop theories to explain the
mechanics of human social interaction. Interesting current sociological research focuses on the
application of game-theory under theories of social Darwinism. This section will explore
fundamental concepts of fairness through the application of game-theory in a Social Darwinism
Game-theory in social science
Game-theory studies optimal behavior when costs and benefits of each option are not
fixed, but depend upon the future choices of other individuals. Game theorists study the
predicted and actual behavior of individuals in games, as well as optimal strategies.42 A
particular application of game-theory to the philosophies of rational egoism and social
Darwinism were investigated.
42 See Martin Osborne and Ariel Rubinstein, Course in Game Theory (1994).
Game-theory application of rational egoism and Social Darwinism
Sociologists are asking if it is it rational to be fair.43 Put another way: are individuals in a
society better off if everyone gives in to his or her desire to simply watch out for their own
interests and take whatever offers the greatest advantage? Alternatively, are people better off if
they act fair?
Some philosophers have tried to prove that it does not ultimately benefit the individual to
act solely out of self interest. Plato resisted the claim that fairness is only the will of the rich and
powerful. Plato's detractors, however, raise the example of unjust people who have apparent
happiness. Likewise, Plato's detractors offer examples of apparently fair people who do not
benefit from their fair actions.
Evolutionary sociologists have raised interest in the idea that Darwin's theory of biological
evolution would provide the naturalistic basis for an optimized selfish society. Early sociologist
Herbert Spencer coined the phase Survival of the Fittest for his philosophy of Social
Darwinism.44 Support for the theory, however, waned during the early Twentieth Century and
was generally abandoned after the philosophy formed the foundation for abuses such as eugenics
by the Nazis.45
Some contemporary scientists and philosophers, however, are attempting new ways of
deriving a fundamentally rational way of being ethical. They argue that human beings evolved as
social animals, not as lone, self-reliant brutes and that cooperation is selected in favor of
selfishness because selfishness reduces the fitness of most individuals and of the group.
45 See Massimo Pigliucci, Rationally Speaking (2001).
44 See Herbert Spencer, Social Statistics (1851).
45 M.M. Weber, "Psychiatric Research and Science Policy in Germany: The History of the Deutsche
Forschungsanstalt fur Psychiatrie, German Institute for Psychiatric Research in Munich from 1917 to 1945," History
ofPsychology43 (2000): 235-258.
Social scientists have provided an example of how mathematical evolutionary theory can
be applied to fairness and how social evolution favors fair and cooperative behavior.46 To
support their theory, they used the ultimatum game. In this game, two players are offered the
possibility of winning a pot of money, but they must agree on how to divide it. The proposing
player makes an offer of a split (i.e. $9 for me, $1 for you) to the other player. Then, the other
player, the responder, has the option of accepting or rejecting. If the responder rejects, the game
is over and neither of them gets any money. Using this example i/ ith twoplayers it would seem
the rational strategy is for the proposing player to behave egoistically and suggest highly uneven
splits in which he or she takes most of the money, and for the responder to accept. Alternatively,
neither of them gets anything.
Nowak and colleagues, however, simulated the evolution of the game in a situation in
which several players get to interact repeatedly. That is, they considered a social situation rather
than isolated encounters. They found that if the players have memory of previous encounters
(i.e., each player builds a reputation in the group), the most favorable strategy is to propose fair
offers because people are willing to punish dishonest proposing players. Punishing unfair
proposing players in turn increases the fair proposing player's reputation for fairness and
damages the unfair proposing player's reputation for the next round. Assuming this social
environment, it is rational for proposing players to act less selfish towards the other players.
Thus, the ultimatum game favors fairness over strict egoism and supports rational egoism in the
context of Social Darwinism.
The ultimatum game assumes unselfish behavior as inherently fair behavior. At first glance
this assumption appears self-serving and designed to dodge any inquiry as to the fundamental
46 Martin Nowak, Karen Page, and Karl Sigmund, "Fairness Versus Reason in the Ultimatum Game," Science 8-289
essence of fairness. However, viewing this assumption so narrowly fails to recognize that the
proposing players are acting fair because fairness benefits them. Seeking to maximize his or her
gain, the proposing player will consider the gain that he or she will receive if he or she proposes
transactions that are fair. Further, the proposer iteratively recognizes that fair distributions result
in the maximization of his or her own gain. Under this theory, the resulting fair distributions are
relatively equal distributions.
Summarizing, sociologists attempt to explain a social scheme whereby acting fairly is
rational. Complementary to Darwin's theory of evolution through natural selection, Social
Darwinism asserts that fairness has evolved out of iterations of man acting egoistically in social
interactions. Social Darwinists theorize that it is in the individual's best interest to act in ways
that help society. They further theorize that iterations of individual self-interested acts, when
done in the context of a society where proposing players and responders develop a reputation,
ultimately results in a proportional distribution of goods throughout the society.
Sociology and Impact Fees
Sociologic theory supports Orange and Hillsborough County impact fees. Under the
ultimatum game, it is rational to be fair and fairness is defined as relative proportionality. Both
impact fees provide that the cost of new development is portioned pro-rata amongst the new
households that have created the need for the increased school capacity. With respect to the
exemptions for senior households, the fees in their current role as a supplement to existing
sources are because, were the counties to require senior households to pay school impact fees,
those counties would develop a reputation for playing unfairly by requiring seniors to pay user
fees for schools that they will never use. As a result, seniors would see this disproportional
scheme as unfair. The long-term iterative result would then be that the seniors would not "play
the game" with the county anymore and refuse to purchase new housing. Social Darwinists
would say that it is rational for the county to exclude senior housing from the impact fees. The
result being that the exclusion is fair.
Sociologists would find the government housing exemptions fair also. The government
housing exemptions go against strict proportionality in that they do not require new government
housing households to pay the cost of new school infrastructure. However, as discussed in the
social contract theory section, the exemptions are fair because they provide equality of
opportunity. Were the exemptions not in the fees, the government housing households might
very well not play the game and society would bear the burden of a greater portion of uneducated
citizens. This goes both ways though, if the households who enjoy the benefit of equal
educational opportunity do not take advantage of that opportunity, the paying households will
discontinue playing the game and demand that the exemptions be removed. The same holds true
for the low income exemption found in the Hillsborough fee.
Summarizing this section, Social Darwinists use the ultimatum game to show that it is
rational to act fair and further that proportional outcomes are fair. Without the exemptions for
senior housing, government housing and low income housing, the Orange and Hillsborough
county fees might not hold up as fair under the ultimatum game. However, the exemptions allow
the representative constituencies to develop a reputation of acting fairly and iterations of the
game can continue. Further, the exemptions provide an opportunity for proportionality.
Therefore, the fees are fair under the sociological theory of Social Darwinism.
Judeo-Christian Theology on Fairness
Judeo-Christian theology can be gleaned from theologians or from direct study of the
Biblical text. Here, exegesis from the original text is favored over a survey of theologians.
The influence of Judeo-Christian theology in American politics
Recent studies show that nearly 80% of Americans identify with either the Christian or
Jewish faith.47 Further, studies suggest that a majority of Americans believe that churches should
express their views on political matters and that there is either too little or the right amount of
expression of faith by political leaders.48 Therefore, the influence of Judeo-Christian thought on
American politics is substantial.
Hebrew Pentateuch and Christian Old Testament on fairness
The doctrine of the tithe is found early in the Hebrew Pentateuch and Christian Old
Testament at Genesis 14:20.49 The doctrine of tithing simply means that each family is to give a
proportion of ten percent of its belongings and income to the mission of the synagogue or
church. Implicit in this doctrine is the idea that, regardless of wealth, it is fair for each family to
contribute and that each contribution is proportional to the family's individual wealth. Therefore,
while the amounts of the contributions are different, the relative impact is equally proportional.
Jesus on fairness
Jesus' teaching regarding fairness also includes proportionality. His doctrine of
proportionality is gleaned from his teachings on income and contributing. Regarding a person's
income and expectations of income, Jesus is recorded in Luke 11:3 as saying that each should
receive his or her "daily bread."50 Implicit in this teaching is that it is fair for each individual to
receive a certain amount of income that is sufficient for the needs of their individual purpose.
47 See Ariela Keysar, Barry A. Kosmin, and Egon Mayer, American Religious Identification Survey (2001).
48 See Scott Keeter, Public Divided on Origins of Life: Religion a Strength and Weakness for Both Parties (2005).
49 New International Version Study Bible, Kenneth Barker ed. (1995).
50 Supra note 49.
Jesus also taught the Golden Rule in Matthew 7:12, "[s]o in everything, do unto others
what you would have them do unto you."51 This teaching requires that the contributor construct a
fairness paradigm from the perspective of others. This teaching also contains an element of
proportionality in that an individual is to give to others in proportion to how much he or she has
Summarizing, Judeo-Christian definitions of fundamental fairness are influential in
American society. The Judeo-Christian notion of fairness is closely linked to proportionality
whereas it is fair to give in proportion to what one has. This conceptualization of fairness is also
other-centered in that it defines fairness as contributing to others in proportion as to how the
contributor would want to receive.
Judeo-Christian Theology and Impact Fees
Orange and Hillsborough County impact fees are fair under Judeo-Christian Theology.
Similar to psychology, this theology arrives at fairness by requiring individuals to look at
situations from the perspective of others. Like postconventional thinking, the theology forms the
basis for the thought experiments that Kant and Rawls prescribe. In order to enter into the
thought experiments of the Categorical Imperative and the Original Position, the thinker must be
able to see things from the abstract perspective of others. The fairness found in social contract
theory is reinforced by Jesus' teachings. Judeo-Christian support of Kant's and Rawls' theories is
an important contribution to the objective.
Secondarily, the proportionality aspect of both fees is fair under Judeo-Christian Theology.
The fees are based upon studies that connect the actual cost of new school infrastructure to the
new development that necessitates the new infrastructure. The fees are designed so that each new
51 Supra note 49.
household pays the proportional cost of the newly needed school infrastructure. This
proportionality is similar to the tithe requirement. With the tithe in Judeo-Christian theology,
each household is to pay its proportionate share of the cost of the mission of the church.
Similarly, with the impact fees, each new household pays its proportionate share of the cost of
the newly needed schools.
Summarizing this section, Judeo-Christian theology is characterized by looking at
situations from the perspective of others. Jesus' teaching supports social contract theory which,
in turn, is an important element of the fairness of Orange and Hillsborough County impact fees.
Further, the theology supports the proportionality element of the impact fees.
A given county's general taxation/impact fee combination falls on the public school finance
continuum between the extremes of general taxes only and impact fees only. The philosophies
studied support a finding that the extremes of general taxation and impact fees only are both
unfair. Near the extremes is a gray area where it is not clear if the philosophies and disciplines
would support the general taxation/impact fee combination. However, as the distance from the
extremes increases, the fees are more supported by the fairness ideas set forth in the philosophies
and disciplines. Therefore, the middle region of the public school finance continuum is the zone
of impact fee fairness. Where the Orange and Hillsborough County impact fees lie on the
continuum and the ultimate question of the fairness of the fees is the subject of the following
Public school finance continuum -
Grey area Zone of impact fee fairness Gray area only
Figure 3-1 Zone of impact fee fairness in the public school finance continuum.
Table 3-1. Philosophy and discipline matrix.
Philosopher or Discipline Parameter of Fairness Element of Impact Fees
Fairness is the equipped acting in Impact fees are fair when they
the interest of the unequipped like augment the role of general taxes.
Plato physician to patient. General taxes allow those with
resources to provide for those
Fairness is a mean between Impact fees are fair to the extent that
Aristotle getting too much and getting too they are a mean between the
little, extremes of general taxation only
and impact fees only.
Individuals agree upon a social Impact fees are fair because they act
H s contract as a fair way of resolving to connect the cost of education to
the otherwise intolerable natural benefits of educated society over
state of mankind. generations.
Individuals agree upon a social Impact fees are fair because they act
Locke contract as fair way of resolving to connect the cost of education to
the otherwise unfair natural state benefits of educated society over
of mankind. generations.
Individuals rationally formulate Impact fees, as an augmentation to
and implement fairness through a general taxation, are fair because,
Kant social contract outside of any when viewed from the perspective of
divine or natural law. others, everyone would choose
Whichever scheme provides the Impact fees provide the most
Bentham most happiness for the most happiness for the most members of
members of society is fair. society.
Same as Bentham but more Impact fees, as an augmentation to
Mill freedom for individual to gain general taxation, are fair because
happiness by helping others gain there is greater overall pleasure than
Fairness is formulated by Impact fees, as an augmentation to
constructing rules from a general taxation, are fair because,
Rawls perspective unbiased by one's when viewed from the perspective of
position or experience, others, everyone would choose
Fairness is minimal involuntary Impact fees are fair because they are
interaction with society. voluntary to the extent that
Nozick households do not have to purchase
new residences in counties with
school impact fees.
Table 3-1 Continued.
Philosopher or Discipline Parameter of Fairness Element of Impact Fees
Fairness avoids unjust Impact fees are fair because they
Courts of Equity enrichment, prevent windfall to existing and new
Fairness is thinking from other's Supports Kant and Rawls.
Psycho y perspective.
Fairness is rational and relatively Impact fees, as an augmentation to
Sociology proportionate. existing general taxes, are fair
because they are relatively
Fairness is thinking of others Roots of Kant and Rawls.
Judeo-Christian Theologywith one's sef.
equally with one's self.
SUMMARY AND CONCLUSION
Are the Orange County and Hillsborough County school impact fees are fair? The
Introduction provided the philosophical and historical context for public education finance in the
United States and Florida. Next, the evolution of the impact fee was explained. Thereafter, a
survey of philosophies and disciplines were examined to understand fundamental facets of
fairness and scrutinize impact fees against the facets of fairness. Impact fees were determined
fair under the philosophies and disciplines. However, the determination that the fees are fair is
qualified to include only those fees that create a financing combination that falls significantly far
from the extremes to distinguish the combination from a general taxation only or impact fees
only on the public school finance continuum (See Figure 3-1).
Where do the Orange County and Hillsborough County school impact fees fall on the
public school finance continuum and are these specific county's fees fair? The philosophies and
disciplines examined establish that it is not fair to have public schools financed only through
general taxes as they had prior to school impact fees. In a general tax only scheme, purchasers on
new residences become unjustly enriched because they necessitate increased school construction
but are only required to pay a share of the cost equal to that of existing residences in the county
that did not necessitate the additional school construction. Unjust enrichment is contrary to
courts of equity. Further, a general tax-only scheme fails to incorporate the proportionality found
in sociology, psychology and Judeo-Christian theology because those creating the need for
additional school infrastructure are not paying a proportion of that cost any different from those
existing residential occupants who did not create any additional need.
Likewise, the philosophies and disciplines examined establish that it is not fair to have
public schools financed only through impact fees. In an impact fee only scheme, new public
schools and augmentations to existing schools are financed only through impact fees. Further,
because of the nexus requirements impact fees are only to be paid by those residences producing
public school aged children. In turn, the newly built schools would only benefit those residences
that necessitated the same schools. Therefore, an impact fee-only school financing scheme is
tantamount to a user-only school financing scheme.
Under a user-only public school financing scheme, Plato's allegory of physician to patient
is not in effect because households more equipped to educate are not acting in the interest of
households that are less equipped to educate. Also, Aristotle's picture of virtue as a mean
between extremes is not constructed. Social contract theory does not support a user-only scheme
because, under the Categorical Imperative, nobody would chose that scheme because it would
deny his or her opportunity for education if they did not come from a household that could afford
an education. Further, the intergenerational cost/benefit linkage that general taxation provides is
removed in that seniors and households without public school aged children do not pay for the
cost but who benefit from an educated citizenry.
A user-only scheme is contrary to psychologist Piaget's findings of fairness in thinking of
the needs of others in that it is fair for those households without school-aged children to think of
those households that do. This view is also supported by the ultimatum game in sociology and in
Judeo-Christian theology. All three of these require the thinker to place the needs of others on
equal footing with the thinker's needs. Therefore, the household without children is required to
see merit in other in the education of other household's children.
Combined, the philosophies and disciplines prevent a determination of fairness if a local
government's public school financing scheme lies on the extremes of general tax only or impact
fees only. Therefore, a fair scheme must be a combination of the two. However, determining a
precise mathematical fair combination might not be possible because the philosophies and
disciplines are non-discrete sciences. Whereas discrete sciences such as physics generally
produce discrete solutions, the philosophies and disciplines studied here have no discrete
solutions and include variables discussed infra in the Limitations. That being said, however, it is
assumed that a combination that lies close to an extreme cannot be determined fair. Under this
assumption, we will now look at Orange County and Hillsborough County impact fees in the
context of the pubic school financing continuum.
Orange County has been increasing the role of impact fees over the past years. In 1992,
the school impact fee for a single family home in Orange County was $1,400.00. Thereafter, in
1998, this amount was increased to $2,828.00. Finally, in May of 2005, the same fee was raised
to $7,000.00. Therefore, Orange County is moving towards a greater role for impact fees in the
general taxation/impact fee combination and is trending to the right on the public school finance
continuum (See Figure 4-1). The placement of the fees on the public school finance continuum
are relative and do not follow any precise mathematical formula or structure. The public school
finance continuum figure is for demonstrative purposes only. But, while not based upon a
discrete mathematical foundation, the diagram is none-the-less descriptive for determining if
impact fees are fair.
At a level of $7,000 per single family home, the Orange County fee is far enough from the
value of zero dollars to distinguish Orange County's financing combination from a general tax-
only scheme. Following, the Orange County public school financing combination contains a
significant portion of impact fees and therefore embodies the fundamental fairness that impact
fees bring to a general taxation/impact fee combination. Therefore, Orange County's school
impact fees are ultimately determined fair.
Hillsborough County is considering increasing the role of impact fees. While the County is
vigorously debating a significant increase, the current fees are only $195.95 for a three-bedroom
single-family home. Therefore, while Hillsborough County is considering an increase in the role
of impact fees in its general taxation/impact fee combination, the current fee sits far to the left on
the public school finance continuum (Figure 4-2).
At a level of $195.95 per single family home, the Hillsborough County fee is close to the
value of zero dollars, therefore, Hillsborough County's financing combination cannot be
distinguished from a general tax-only scheme. Following, Hillsborough's combination does not
embody the fundamental fairness that impact fees bring to a general taxation/impact fee
combination. Hence, Hillsborough County's school impact fees lie somewhere in the gray area
and cannot be determined fair.
Figure 4-3 shows the average Florida school impact fee on the public school finance
continuum. At $3,286, the average fee is far enough from the value of zero dollars to distinguish
the financing combination from a general tax-only scheme. Therefore, the average Florida fee
lies within the zone of fairness and is considered fair. Should Hillsborough County increase its
school impact fee to an amount at least commensurate with the state average, the fee would lie in
the zone of fairness and the fee would be determined fair.
In conclusion, the objective was to determine if Orange and Hillsborough County school
impact fees are fair. At $7,000 per single family home, Orange County's current school impact
fee is determined fair. Conversely, at $195.95 per three-bedroom single family home,
Hillsborough County's current school impact fee is determined unfair. Should Hillsborough
County increase its school impact fee to an amount at least concurrent with the Florida average
school impact fee, the fee would be determined fair. Following, the objective has been met:
impact fees are a fair form of public school financing but impact fees must be a significant
portion of the public school financing combination. Orange County's fee of $7,000 is determined
fair while Hillsborough County's fee of $195.95 is determined unfair.
There are a number of limitations. A primary limitation is that the question that this paper
asks might not ultimate have an answer. Justice Potter Stewart encountered a similar when the
Supreme Court struggled with defining obscenity. In Jacobelis v. Ohio, Justice Potter
acknowledged that the Court might be trying to define the not definable.1 In his opinion, he
conceded that he might not be able to offer a precise definition but he could affirm that he knows
obscenity when he sees it. Similarly, Justice Holmes' opines in Pennsylvania Coal v. Mahon that
he is unable to arrive at a bright-line definition of a regulatory land use taking.2 Rather, he asserts
that if a regulation goes too far it is considered a taking. Even significant camps of philosophy
uphold no positive truths but rather find that everything is relative.
The term Education refers to formal education. In its broadest sense, education can be
defined as any activity by which a human group transmits to its descendants a body of
knowledge and skills and a moral code which enable that group to subsist. Alternatively, formal
education can be thought of as the school systems set up by local school districts with the
express purpose of the systematic teaching of children.
School impact fees are limited to only the construction of new school facilities. Costs of
providing education consist of building costs and operating costs. School impact fees in Florida
are allocated to the cost of constructing new educational facilities or renovating used facilities.
1 See Jacobelis v. Ohio, 378 U.S. 184 (1964).
2 See Pennsylvania Coal v. Mahon, 260 U.S. 393 (1922).
School impact fee revenues are not spent on operating costs such as salaries, maintenance, and
supplies. Therefore, conclusions about the fairness of school impact fees only apply to the
construction of new schools or renovations of existing schools.
Another limitation is the scope of inquiry into fundamental fairness. Thought and debate
about fairness has been documented for over five thousand years. The result is numerous theories
of fairness with vigorous current debate. Were this paper to attempt to survey each one of them,
the task would be overwhelming. Further, the paper would be immense and risk over-inclusion.
Such a paper would be so expansive as to possibly give no direction or advancement of thought.
A further limitation is errors in the conclusions reached by the philosophers and
disciplines. While the great philosophers and positions set forth in the disciplines have stood the
test of time and scrutiny, there remains no ultimate authority or certification of authentic and
controlling theory. Therefore, philosophers and theorists within the disciplines run the gamut
from scientists to windbags. Bacon discussed philosophers whose thinking is so convoluted as to
be of little explanative value. He remarked that their philosophies are, "cobwebs of learning,
admirable for the fineness of thread and work but of no substance or profit."3 This opens the
possibility that many philosophers and theorists who have addressed fundamental fairness are not
able to actually shed light on the subject. Nonetheless, their philosophy or positions might be
studied in this paper.
The paper is also limited by the existence of conflicts between the reasoning disciplines.
For instance, the Libertarian might say that a capitalistic approach is fair whereas the social
scientist might disagree and say that the only fair distributive scheme is socialism. However,
absent such conflicts, this paper might just state the obvious and be of no scholastic value.
3 Sir Francis Bacon, The Advancement ofLearning, originally published in 1605 (2006) at I-IV(5).
These limitations are a function of the philosophies and disciplines studied. Unlike the
physical sciences, these sciences and disciplines are more difficult to extract discreet answers
from but are, none the less, elements of human inquiry that have historically been important and
remain important today. Therefore, even with these limitations, they give parameters within
which a financing combination that is unfair can be excluded.
1992 1998 Current New school
impact fee Orange County fee Orange County fee Orange County fee construction
$0 $1,400 $2,828 $7,000 cost per dwelling
V V V V $13,566
Public school finance continuum -
No impact fee
No impact fee
Gray area Zone of impact fee fairness Gray area
Orange County's fee on the public school finance continuum.
Hillsborough County cost
-- Public school finance continuum -
Gray area Zone of impact fee fairness Gray area
Hillsborough County's fee on the public school finance continuum.
2005 Average Florida
school impact fee
Public school finance continuum -
ost per dwelling
Gray area Zone of impact fee fairness Gray area
Average Florida school impact fee on the school finance continuum.
School Enrollment: U.S. Department of Commerce, Bureau of the Census,
"Historical Statistics of the United States: Colonial Times to 1970" (electronic files).
Available at http://www2.census.gov/prod2/statcomp/documents/CT1970p -09.pdf
Florida Population: U.S. Department of Commerce, Bureau of the Census,
"Census Population of Counties by Decennial Census 1900-1990;" "Profile of General
Demographic Characteristics: 2000;" and "Interim State Population Projections: 2005."
Local Government Revenue: U.S. Department of Commerce, Bureau of the
Census, Statistical Abstract of the United States, "Local Governments, Revenue by State:
2002," Table 441 (electronic file). Available at
www.census.gov/govs/estimate/0210flsl_l.html (March, 2006).
Local Government Revenue: Department of Commerce, Bureau of the Census,
Statistical Abstract of the United States, "Local Governments, Revenue by State: 1992,"
Table 498. (electronic file). Available at www.census.gov/govs/estimate/92sll0fl.html
Intergovernmental Revenues: U.S. Department of Commerce, Bureau of the
Census, 1992 Census of Local Governments, "State and Local Government Finances,"
(Table 1) and 2002 Census of Governments, "State and Local Government Finances,"
Impact Fee Revenue: Florida Legislative Committee on Intergovernmental
Relations, Florida Impact Fee Review Task Force, Final Report and Recommendations,
February, 2006, "Reported Impact Fees by Government Type, Fiscal Years 1993-2004,"
Appendix 3, Chartl (electronic files). Available at http://www.fcn.state.fl.us/lcir
Florida School Spending: Florida's E-Budget, Policy and Budget
Recommendations FY 2006-2007, "Eight Year K-12 Funding Cumulative Increase of
$7.17 Billion" (electronic file). Available at
www.ebudget.state.fl.us/Highlights/education/school funding.aspx (March, 2006).
Orange County Home Prices: Orlando Regional Realtor Association, "Mean
Single Family Home Price, Orlando, Florida 2006," (electronic file). Available at
www.orlrealtor.com/Files/PDF/Housingtrendssummary.pdf (April, 2006).