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We often argue that the least amount of government is the best government. And it is elementary:
For excessive government, particularly in the form of overregulation and the excessively high taxation required to enforce such overregulation, is a surefire way to strangle free markets, innovation and the economic growth endemic to both.
Which brings us to an incredibly troubling Post-Gazette dispatch detailing new and outrageously high fees that would-be developers in Pittsburgh are being charged for zoning reviews.
As the P-G’s Mark Belko reports, the attorney for a developer seeking to build apartments and a hotel complex in Oakland has called the city on the carpet for implementing what he calls an “arbitrary, capricious and improper” (as in illegal) fee structure for zoning reviews.
To wit, the attorney says that, as of Jan. 1, the new fee is $3 per $1,000 of project cost. There is a minimum charged of $100 but no cap on the upper end.
It means the Oakland development that, in preliminary planning, would have been charged a flat fee of $14,050 now would be charged an incredible $255,000.
The attorney for the Oakland project, in a letter to the city, argues that such a high fee is contrary to state law.
From reporter Belko’s dispatch:
“In his letter, [the developer’s attorney] stated that Pennsylvania law does not permit municipalities to use their power to charge fees ‘for issuing licenses or permits for the purpose of raising revenue.’
“It also mandates that the fees charged are ‘directly related to the costs incurred by the municipality in issuing the permit or in performing the work associated with such application.’
“Any amounts collected in excess of the municipality’s actual costs will be considered an unauthorized tax, and an applicant will be permitted to recoup these amounts, plus interest,” he wrote.
The attorney more than intimates that the city is using the new fee structure in “a tax-raising revenue matter” when such fees “are to be related to the actual cost of the administration of the program.”
As the developer himself notes, the new fee structure comes at a time of higher interest rates and ballooning construction costs.
But such an onerous escalation in the fee structure would be unwise even if rates and costs were not up.
While it’s likely going to be up to the courts to determine the legality of the revised fees (Gee, haven’t we been here before in other government overreaches involving the City of Pittsburgh?), such an action goes back to what government’s fundamental duties are – and are not.
This dispute, as with so many before, continues to show how city government continues to know not how to facilitate growth and economic development but seeks to molest it before it can even get off the ground.
And it forces us to recount this fundamental truism that too many in government no longer heed: Government is not the people’s master but its servant.
Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).
