Background
State and local governments charge fees for the use of certain services. These fees are based on the principle that people should pay according to the benefits they receive. Among them are road tolls, fees for vehicle registration, utility taxes, park admissions, and various permits. User fees may have great potential in the infrastructure area. They could be a source of funds for the maintenance and repair of roadways and utility systems.
These fees, however, tend to be regressive. In addition, failure to pay some fees can result in severe consequences. This creates an extra burden for people with low incomes.
States also charge impact fees on developers of commercial, industrial, or residential real estate projects to defray some of the public costs associated with the private projects.
Sometimes states raise money by selling off public assets such as parks and open spaces. These asset sales may produce one-time immediate revenue gain but result in permanent future revenue losses. It may reduce public enjoyment of assets.
USER FEES AND ASSET SALES: Policy
USER FEES AND ASSET SALES: Policy
User fees
User fees should directly relate to the services received. They should not unfairly burden people with low incomes or unduly limit access to public services.
States should consider requiring commercial developers to bear their fair share of development costs by funding infrastructure improvements, paying impact fees, or contributing to housing construction.
Asset sales
Public assets should not be sold to raise revenue if the sale would sacrifice resources that serve important national and regional purposes. Any sale should also not harm the common interests of present and future generations.