Memphis/Shelby County, Tennessee

Impact Fee and Tax Feasibility Study
   

For Memphis/Shelby County, Duncan Associates evaluated the feasibility of using fees or taxes to pay for infrastructure needed to support new growth. During the 1980s, Memphis had lost population, while its six suburban cities and the unincorporated area had grown rapidly. Techniques addressed included impact fees, development taxes and real estate transfer taxes. The study addressed which technique, if any, was appropriate for each facility. Factors evaluated include data availability, revenue potential, legal defensibility, intergovernmental participation and regional competitiveness. The study

identified two major alternatives to address the school capital financing issue. A real estate transfer tax would have the greatest revenue potential. If assessed county-wide and earmarked for schools, the funds would need to be split between the Memphis and Shelby County school district in proportion to the enrollment in each district. A school development tax would have the next highest revenue potential, and would have several advantages over a school impact fee, including the ability to assess nonresidential development and mitigate housing affordability.