In Jim Futrell’s video introduction to this unit, you learned that fiscal impact analysis helps local governments estimate the difference between the costs of providing services for new development and the revenues collected from that new development. With this case study, you’ll gain familiarity with the inputs and modeling that go into a fiscal impact analysis.
To review: A fiscal impact analysis provides support to decision-makers, local government staff, and community stakeholders, as they seek to identify and how a development plan may benefit a region.
Specific benefits of fiscal impact analysis include:
- Identifies projected changes to local services and revenues
- Helps define achievable levels of service
- Projects capital facility needs
- Clarifies development policy impacts
- Calculates revenues and aids in the development of revenue strategies
- Encourages “what if” questions
- Promotes public education of the connection between land use and fiscal conditions
Review the details below of a fiscal impact study conducted by the Washington, D.C. suburb, Falls Church, Virginia, for the development of “Rushmark,” a proposed downtown mixed-use development. For more on the particular fiscal impacts model used by the City’s consultant, download this public document.)
As you review the summary information on revenue and expenses, identify the information that completes the fiscal impact summary statements below. (On the next screen, you’ll see these statements again in a brief, multiple-choice knowledge check.)
- To calculate the total fiscal impact of the development on the City, the model first tallies gross annual revenues from taxes, license and permit fees, state and federal aid, charges for services, fines and forfeitures, and revenue for the School Board (based on the presence of residential units).
- The largest annual revenues are produced by ____________________ (approximately $1.3 million) and local sales and use taxes (approximately $590,000).
- Total revenues are estimated at around ____________ annually.
- From this revenue total is subtracted the government expenditures necessitated by the new development.
– These include various community, public safety, education, and administrative services, all of which are derived from existing level-of-service factors. Of these expenditures, the largest are for schools ($460,000) and the school board ($160,000), public safety ($145,000), and community services ($125,000).
– Expenditures total approximately $1 million, yielding a net positive fiscal impact of $_______________.