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One City May Be Collecting Impact Fees Illegally

Posted by: California 2000 Project
Thanks to: Jason Todd
24 December 2003 - 7:00am

Ocean Springs, MS faces problems as the attorney general is set out to show that the collection of municipal impact fees on new development is illegal.

"In 2002, the U.S. 5th Circuit Court of Appeals ruled that the city of Madison's impact fee was a tax, and the town had no authority under Mississippi law to levy taxes." According to the Attorney General, the impact fee "does not fall under state law that allows regulatory fees, as those fees are to fund only administrative costs related to the regulations of growth." Fees so far, have been collected by the City of Ocean Springs on new residential and commercial construction since February 2003.

Full Story: Ocean Springs illegally collects impact fees, attorney general says
Source: Clarion Ledger, December 20, 2003
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Even if the report overestimates the costs by a factor of two and underestimates the tax-benefit by a similar amount, the conclusion would be pretty much the same: destination resorts cost local government and taxpayers money.
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