Lesson 2 Fiscal Impact Analysis

Question 1

Fiscal Impact Analysis

Answer 1

Also known as cost-revenue analysis,

Estimates the costs and revenues of a proposed development on a local government

Question 2

Positive fiscal impact

Answer 2

If revenues are greater than expenditures

Question 3

Negative fiscal impact

Answer 3

If expenditures exceed revenues,

Question 4

Neutral fiscal impact

Answer 4

If revenues and expenditures are equal

Question 5

Average per capita method

Answer 5

This is the simplest method, but it is also the least reliable. It divides the total local budget by the existing population in a city to determine the average per capita cost for the jurisdiction. The result is multiplied by the expected new population associated with the new development. 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. This may not be true.

Question 6

Adjusted per capita method

Answer 6

The Adjusted Per Capita Method uses the figure calculated above and adjusts this based on expectations about the new development. This relies on subjective judgment.

Question 7

Disaggregated per capita method

Answer 7

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.

Question 8

Dynamic method

Answer 8

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.

Question 9

Fiscal impact

Answer 9

The difference between the revenues and expenditures generated by a proposed development
Also known as the net fiscal impact.