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Jurisdictions makes based upon revenue or of similar may be used to modify expenditure or revenue of the being studied, This approach is useful when the community anticipates a substantial in its character that might render historic patterns unreliable. Advantages: Enables projections to be based upon actual data of the selected . Requires substantial budget analysis. Jurisdictions may not be to being studied. Expert Judgement Expert judgement relies on the ability of local officials to predict how changes may affect their For instance, an interview with the public works director may indicate that no new road transportation facilities are needed for several years since a major expansion program has been completed and resources are to be shifted into a maintenance program. This would lead to lower projections of capital outlay and higher estimates for operations and maintenance. Advantages: Inexpensive, easily implemented, Low data analysis requirements. Does not require special training. Disadvantages: Not replicable. May require significant time for interviews, Tendency of managers to overstate impacts. Short-term bias. Microsimulation Microsimulation utilizes interview and survey techniques to determine individual, consumption and service demand characteristics, The results of surveys are extrapolated to the population at For instance, microsimulation may be used to determine commuting habits and practices, which are then used to project gasoline consumption and vehicle trips, important factors in forecasting gas tax receipts and road construction, . High degree of accuracy for revenues and some expenditure items. modified for selection of variables to be analyzed, Disadvantages. Expensive and time-consuming, Relies on small survey samples. Not applicable to capital facilities, Integrated Approach An integrated approach uses a combination of the above techniques to project revenue and expenditure items. For example, a trend projection may be modified by expert judgement or econometric techniques may be used to forecast sales tax revenue while deterministic and average cost techniques are used to forecast major items. Advantages: Allows for selection of most appropriate technique depending on item being projected. Considers economic factors. . Expensive and time-consuming, May require use of outside staff. High degree of data analysis. THE FISCAL IMPACT PROCESS There are typically four steps in performing a fiscal impact analysis. First it is necessary to defIne and quantify the change that is to be measured, The second step is the development of revenue and expenditure characteristics. Usually these are based on actual operating budgets, annual reports and other financial documents of the subject jurisdiction. Third is the capital facilities analysis, Capital facilities are usually treated separately from the operating budget as they are nonrecurring, have unique timing and financing characteristics, and often involve issuance of debt or dedicated revenues, Fourth is the 3