FIscal Impact Analysis Flashcards
Fiscal Impact Analysis
Also known as cost-revenue analysis, is used to estimate the costs and revenues of a proposed development on a local government.
The fiscal impact is the difference between the revenues and expenditures generated by a proposed development, which is also known as the net fiscal impact.
The most common form of fiscal impact analysis
is for a development project. However, fiscal impact analysis can also be used to examine the cumulative impact of land use decisions
Several methods for conducting a fiscal impact analysis
average per capita, adjusted per capita, disaggregated per capita, and dynamic.
Average Per Capita Method
FIA. Formula: Total Local Budget/Existing Pop.
Simple but least reliable
The major problem with this method is that it assumes the cost of service to a new development is the same as the cost to service to the existing community.
Adjusted Per Capita Method
FIA. Formula: Total Local Budget/Existing Pop.
Adjusted based on expectations about new dev. Subjective.
Disaggregated Per Capita Method
The Disaggregated Method estimates the costs and revenues based on major land uses; for example, the cost of servicing a shopping center versus an apartment complex.
Dynamic Method
The Dynamic Method applies statistical analysis to time-series data from a jurisdiction.
This method determines, for example, how much sales tax revenue is generated per capita from a grocery store and applies this to the new development.
This method requires more data and time to conduct than other methods.
Major challenges to FIA
Splitting Costs.
For example, capital purchases, such as roads, may occur in one year but are financed over time. Another issue is that multiple developments share the use of a facility.
