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ExecutiveSummary:StudyoftheMetropolitanAreaFiscalDisparitiesProgram <br />FortheMinnesotaDepartmentofRevenue <br />Indiscussionswithrepresentativesfromtheregionalbusinesscommunity,theFiscalDisparitiesprogram <br />doesnotappeartobeafactorindevelopmentorrelocationdecisions.However,itisnotpossibleto <br />determinewhetherthisisduetotheveryexistenceofthe¦©šm©’“·w·is,ifthereweremore <br />disparityintaxratesamongjurisdictionsintheregion,perhapsitwouldbeapronouncedfactorin <br />locationdecisions. <br />However,onecommonthemefromthebusinesscommunityisoppositionto{©z7z“m|therevenue <br />generatedbytheprogramforspecificpurposes.Thegeneralconcernisthatifrevenueswerediverted <br />fromthepool,localitieswouldneedtofillthegapleftbythisreallocationoffundsandwouldpotentially <br />raisetaxesonlocalbusinesses. <br />InfluenceonDevelopmentActivity <br />Thedesirefromalocalperspectiveforcommercialandindustrialdevelopmentisoftendrivenbyother <br />factorsinadditiontoanexpansionofthetaxbase.Otherreasonsinclude: <br />{tŒ-;’‰z“m|“¦©šÝz7z“magatheringplaceforcommunitywithretail,entertainment,and <br />culturaloptions(promotinga{/©;·zÝ;/Ҍ·Ò©;|œr <br />Creatingjobswherepeopleliveinmixedusecommunid <br />ties,whichallowsforreduce <br />commutingtimesandagreaterattachmenttocommunity, <br />Creatingjobsforpurposesof{,©mmz“m|rights,particularlyinthiseraofprolonged <br />economicdownturnandjoblessness,and <br />Enhancingtheoverallqualityoflifethroughalloftheabove. <br />RelatedtothisphenomenonisastatementfromMyronOrfieldthattheFiscalDisparitiesprogram <br />{©;7Ò-;­theincentivesforcommunitiestocompetefortaxbase,becausetheydonotkeepallofthe <br />resultingrevenues.Ontheotherhand,becauselocalitiesretainenoughofthetaxbasetocoverthe <br />costsofgrowth,theincentiveisnotsostrongthatlocalareaswillbeunwillingtoallownew <br />16 <br />developmen·u|Theredoesnotappeartobeaclearcutanswertothisasssumption,particularlyina <br />sevencountyregionwithalmost200municipalities.NAIOPinits{Cz­-ŒDisparitiesTaskForcew;¦š©·| <br />notesthefollowing: <br />Amongtheunforeseenconsequencesoffiscaldisparitiesisitsinfluenceonlanduseand <br />developmentdecisionsbylocernmentofficials.Fiscaldisparitiesmayleadcommunitiesto <br />algov <br />focustheireffortsonnewandhighervaluedresidentialdevelopment(whichisnotrequiredto <br />contributetothefiscaldisparitiespool),whileviewingfiscaldisparitiesasadisincentiveto <br />17 <br />expandingtheirownlocalCItaxbase. <br />16 <br />Orfield,2009,p.38. <br />17 <br />NAIOP,2007. <br />39 <br /> <br />