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ExecutiveSummary:StudyoftheMetropolitanAreaFiscalDisparitiesProgram <br />FortheMinnesotaDepartmentofRevenue <br />EVALUATION OF OVERBURDEN: FISCAL IMPACTS OF LAND <br />USES <br />ThelegislationauthorizingthisstudyidentifiedaneedtoanalyzeaŒš-Œz·äx­{šÝ;©,Ò©7;“r|particularly <br />relatedtoCommercial/IndustrialpropertyundertheFiscalDisparitiesprogram.Thatis,istherevenue <br />generatedtoalocalityfromC/Ipropertysufficienttocoverthedirectexpendituresincurred. <br />Toattempttoaddresstheissuesidentifiedinthelegislationauthorizingthestudyaswellasin <br />stakeholderdiscussions,weconducteda CostofLandUse fiscalimpactanalysisofaselectgroupof <br />jurisdictionsintheregion.Theselectedjurisdictionsreflectonefromtheregionaldevelopment <br />classificationgroupingsusedinthisanalysis: <br />CentralCities <br />DevelopedCities <br />DevelopingCities <br />Rural(RuralAreaandRuralGrowthCenter) <br />Fiscalimpactanalysisisonetooltounderstandthedirectfiscalimplicationsoftaxstructures,cost <br />burdens,anddevelopmentpatternsonlocalgovernments.Moststatesrequirelocalgovernmentsto <br />prepareabalancedbudgetonanannualbasis.However,moststtjurisdictions <br />atesdonotrequiretha <br />conductfiscalimpactevaluationstohelpensurethatlocalofficialsunderstandtheshortandlongterm <br />fiscaleffectsoflanduseanddevelopmentpoliciesandofpotentialnewdevelopment.Afiscalimpact <br />analysisclarifiesthefinancialeffectsofsuchpoliciesandpracticesbyprojectingne <br />tcashflowtothe <br />publicsectorduetoresidentialandnonresidentialdevelopment. <br />ACostofLandUsefiscalimpactstudyisonetypeoffiscalanalysis.Itanalyzesthefiscalimpactof <br />prototypicallandusesthatarecurrentlydevelopedinthejurisdiction.Inthistypeofanalysis,a <br />{­“¦­wš·|approachisusedthatdeterminesthecostsandrevenuesforvariouslanduseprototypesin <br />ordertounderstandthefiscaleffecteachlandusehasindependentlyonthejurisdiction.Inotherwords, <br />itseekstoanswerthequestion,{‘w·typeofdevelopmentpaysforz·­;ŒEj| <br />Thistypeofanalysisisusedtoinvestigatewhetherthereisan{šÝ;©,Ò©7;“|inprovidingpublicservices <br />tocom <br />mercialandindustriallandusesthatarenotsufficientlybeingcoveredbyrevenuesgeneratedby <br />thatlandÒ­;“¦©·z-Ҍ©ŒäduetotheFiscalDisparitiesprogram.Towardthatend,weincludeinthis <br />analysistwoscenariosforeachcasestudy: <br />1.WithFiscalDisparities(CurrentSystem) <br />2.WithoutFiscalDisparities(HypotheticalScenario) <br />25 <br /> <br />