pf_03625 - Laserfiche WebLink

Home

Research Bulletin Research [1 Analysis on Current September 1990 Fiscal Impact Analysis: What It Is and How To Use It lJfichael L. Siegel and Susan Robinson The concept of systematically estimating the costs and benefits of anticipated economic and changes is by no means new, Local, state and federal governments have long undertaken cost-benefit, financial capability and fiscal impact studies to assess the fiscal and economic effects of large-scale energy and defense projects and other facilities, Fiscal impact analysis (FIA) has been used by the planning profession for the last fifty years, Traditionally, planners used it on a project-by-project basis to determine the local consequences of specific development proposals, More recently, FIA is being used on a jurisdiction-wide level to evaluate the financial effects of alternative land use and economic development policies, as well as to model and evaluate the effects of demographic and economic trends. In the budget or finance office, fiscal impact analysis can be used to assist in capital improvement programming, to forecast revenues and to project a jurisdiction's financial position in future years, Fiscal impact analysis provides an opportunity for finance officers and local officials to examine the costs of providing services and how they can be funded, WHAT FISCAL IMPACT ANALYSIS IS Fiscal impact analysis is a method used to measure the fiscal consequences of changes to existing community conditions, It provides a structural approach to determine the effect of a change in the operating environment on the revenues, expenditures and net fiscal flows of a particular governmental entity over a specified period of time, Most contemporary fiscal impact analysis is conducted using computer models to establish the structural approach. Following are situations in which fiscal impact can be used: * General population growth, FIA could be used to project the differential impact of a 2 percent growth rate as opposed to a 4 percent growth rate, * Demographic changes and effects of urbanization, An FIA could estimate the fiscal implications of high-density growth as compared to low density. *Location or relocation of major employers or industries, An example would be to estimate the impacts of the location of a power plant or loss of a major manufacturing facility, * Location or relocation of governmental facilities. An example would be to estimate the effects on a jurisdiction of public housing, solid waste facilities, prisons or other major governmental facilities, *Changes in programs, policies or revenue structures, An example would be to anticipate the fiscal consequences of providing tax incentives for certain economic development projects. * Changes in the service area boundaries, An FIA could be used to determine the impacts of a major annexation, rezoning or consolidation of governmental services, * Evaluate financial conditions, FIA can provide an early warning system for signs of financial stress.