Harford County Executive Bob Cassilly has introduced legislation to raise the County’s impact fees on new home developers, addressing the growing costs of expanding school capacity.
Based on the recommendations of a multi-stakeholder workgroup and study, the proposal seeks to align developer contributions with the actual costs of growth. As the current fee structure has remained unchanged since 2005, the legislation aims to reduce the burden on taxpayers while ensuring a more equitable and balanced approach to funding necessary school infrastructure projects.
What Are Impact Fees?
Impact fees are one-time charges that local governments collect from developers to offset the cost of public infrastructure, such as roads, utilities, and schools, needed to support new development.
Development impact fees must meet specific legal criteria, ensuring they address three essential elements: need, benefit, and proportionality.
First, the fee must reflect a demonstrated need for capital improvements directly resulting from the new development.
Second, the development must benefit from the fee, with public facilities constructed or improved within a reasonable timeframe.
Lastly, the fee must remain proportional, meaning the amount charged cannot exceed the development’s fair share of the total cost for system improvements.
In Harford County, per State law, these fees fund projects to expand school capacity, ensuring that new homes and residents do not overload the existing infrastructure. This mechanism shifts part of the financial responsibility from taxpayers to developers, whose projects directly contribute to increased demand for public services.
Tackling a Long-Standing Funding Gap
Harford County’s current impact fee structure remains unchanged after nearly two decades despite an almost 300 percent increase in the cost of school construction over the same period.
In 2023, the County collected $2.7 million in impact fees, but actual school capacity projects totaled $6.8 million that year, leaving taxpayers to cover a $4 million gap. The proposed legislation would close this gap by ensuring developers pay a more proportionate share of the costs tied to school expansion.
“For too long, Harford’s impact fees have failed to reflect the cost of expanding school capacity, unfairly adding to the burden on taxpayers,” said County Executive Cassilly. “With this legislation, new home developers will begin to pay more of their fair share.”
Data-Driven Adjustments
County Executive Cassilly formed a workgroup earlier this year to develop a more sustainable solution. The group, including members from the County Council, school system, and local business community, collaborated with impact fee consultants TischlerBise to study the actual costs of expanding school capacity based on different housing types.
“Maximum supportable residential impact fees” represent the highest fee Harford County can justify charging new residential developments to cover the costs of expanding school capacity. The study recommended that the fee for single-family homes be $12,819, while townhouses and multi-family units are proposed at $11,422 and $6,856, respectively.
While the study recommends increasing the school impact fees for new residential developments to reflect actual costs, State law imposes a cap of $10,000 per unit for single-family homes and townhouses, limiting the potential fee increase.
As such, the proposed fee adjustments are as follows:
- Single-family homes: from $6,000 to $10,000
- Townhouses/duplexes: from $4,200 to $10,000
- Multi-family and other residential units: from $1,200 to $7,989
The proposal also includes annual adjustments based on rising school construction costs, as determined by the Maryland Interagency Commission on School Construction.
Despite these increases, Harford’s impact fees would still be aligned with those in other Maryland counties, like Frederick and Anne Arundel, maintaining a balanced approach to regional development.
Next Steps
If approved by the Harford County Council, the additional revenue would fund several critical school capacity projects already in the pipeline, including the new Homestead-Wakefield Elementary School, a combined elementary school and Harford Academy, and the purchase of land for a new elementary school in Aberdeen.
