45 
new community pay the full costs of the facilities provided for them. 
Finally, the staging of the development process in districts, would 
make possible a more equitable treatment of landowners in acquiring 
land for public purposes and in assessing land for taxation.*® 
The capital needed by the development district agency (or corpora- 
tion) can be raised by the State sale of bonds, which should be placed 
at the disposal of the agency from time to time for definite purposes 
stated and justified by the agency. Much of this capital would have 
to be raised by State bonds and local bonds even if development were 
to proceed in the conventional manner. A small amount of additional 
capital might also be needed to finance the agency’s operating costs, 
includimg the detailed planning and urban design work, site prepara- 
tion, promotional activities, and administration. The capital advanced 
for construction of public facilities would be recovered from the public 
agencies responsible for the provision of such facilities when money is 
available from their usual sources of funds. The payment might come 
in a lump sum from an agency capital budget, or in annual installment 
payments, or in rental payments. *° The initial capital investment in 
the district and the agency’s operating expense might be recaptured 
completely by a combination of the existing sources of funds from the 
various public agencies and profits from the sale and lease of land. 
However, the establishment of the development district would offer 
a good opportunity to maugurate an improved method of paying for 
public improvements.*° 
All taxes collected in the district would be shared with the towns 
which comprise the district. Services might be purchased from towns 
prior to the new community’s completion. The sale of stock to all 
interested public and private agencies and individuals would also 
provide considerable revenue. These development districts would be 
38 Tbid., p. 77. 
39 Tbid. 
40 ““Dhree closely related devices are now employed in various circumstances in the two counties. Special 
assessments are used to finance the extension of local water and sewer lines, and the paving of streets and 
construction of sidewalks in areas that were developed or subdivided without these amenities. The construc- 
tion of streets and sidewalks by homebuilders who add the cost to the price of the houses in a similar and 
common financial arrangement. The compulsory dedication of park and school sites (or payment ofa fee in 
lieu thereof), which is likewise reflected in the cost of new houses, is another such device. 
Use of special assessments to finance most or all of the other public facilities, including schools, libraries, 
and community centers, would have the advantage of confronting the home buyer (or renter) with the full 
cost of the facilities that will be needed to serve him, thereby enabling him to make a wise decision on the 
amount that he can afford to spend for housing. This system would help residents to avoid the plight of all 
too many suburbanites, who become overcommitted by failing to allow for the tax increases that will be 
necessary to provide the full complement of public facilities needed as the community matures. 
Separate assessments would have to be levied for facilities that are of direct and sole benefit to a given 
property, and facilities that generate wide benefits. Two important considerations dictate thi <distinction. 
Assessments for water and sewer lines, frontage streets, and a few other facilities needed to make a tract of 
land usable, can properly be levied against tax exempt institutions, since such assessments are similar to 
the prices that any user must pay for any facility or service, public or private. Furthermore, these assess- 
ments are not deductible in computing taxable income, since they are more akin to an investment in the 
property that is benefited than to a general tax (which is deductible). 
By separating the two kinds of assessment, it will be possible to charge nonprofit organizations for the 
facilities directly appurtenant to their proper ty, and to assure the tax deductibility of all other assessments. 
To make the distinction abundantly clear, the second kind of assessment should be given a new and more 
accurate name, such as “lump-sum tax for community facilities.” 
The two kinds of assessment could be spread over the properties in the development district in any of 
several ways. The cost ofstreets, water mains, and sewers might be assessed, as is now usually the case, in 
proportion to the length of the street frontage of the properties served. The cost of other facilities might well 
be assessed on an ad valorem basis. In some cases, the cost of facilities serving residential areas might be 
paid by the assessment of equal amounts against all dwelling units, but this basis would have a regressive 
tendency that would probably be unacceptable in most cases. 
The use of special assessments would necessitate a careful estimate of the cost of all facilities to be provided 
in the new community, and determination of the value of each assessable property as ofthe time that the 
assessment is imposed upon it. While these calculations would not be easy, the agency would have sufficient 
information on the public improvements program to permit reasonably accurate cost estimates, and data 
on property values would be readily available if the assessment is not imposed until the time that the 
develope :d property goes on the tax rolls. Since the development process would be completed within a few 
years, the possibility of error would be limited.” (Bain, op. cit., pp. 78-80.) 
