Mississippi Home Builders Win Impact Fee Case
A Jackson County circuit court recently invalidated a city’s entire impact fee scheme, finding the local ordinance unconstitutional and in violation of state statutory law. The City of Ocean Springs had imposed multiple impact fees for fire and police facilities; park and recreational facilities; and water and roadway infrastructure, totaling almost $5,000 per single-family home.

In knocking down the city’s impact fee program, the court in Home Builders Association of Mississippi, et al. v. City of Ocean Springs ruled that the state’s Home Rule Statute did not enable Ocean Springs to implement the fees in the absence of express enabling authority.  Finding that the municipality was not otherwise authorized to impose the fees via its general planning and zoning powers, the court determined that the purported “regulatory” fees were operating instead as illegal taxes.  According to the court, the city’s “venture into the realm” of taxation, without express taxing authority, was illegal. Traditionally, general municipal services and facilities must be funded by tax revenues raised by legislatively-authorized schemes.

The court ordered Ocean Springs to develop a detailed accounting of funds already collected and to submit a written plan for a refund of the fees.  Ocean Springs is certain to appeal the circuit court’s decision and the case could ultimately end up in the Mississippi Supreme Court. [ return to top ]