Analyzing the Fiscal Impacts of Development: Lessons for Building Successful Communities

Abstract

Standard methodologies of fiscal impact analysis commonly used at the local level can produce strikingly different findings and conclusions. Local professionals can play an important role by making citizens and local officials aware of the assumptions and biases inherent in such methodologies. Given the biases implicit in different methods, communities need to be encouraged to require at least two estimates of fiscal impact, using two different methods, and to conduct follow-up studies five to ten years after development has occurred to determine the actual fiscal impacts of development. In these ways communities will be reminded of the uncertainties in forecasting future costs and revenues, and be encouraged to pay greater attention to the indirect and interactive effects of different types of land uses. They also will be encouraged to remain focused on the long-term goal of achieving a balance and mixture of land uses that is sustainable and that assures a high quality of life.