FISCAL IMPACT ANALYSIS AND THE PYRAMID MALL CASE

Abstract

ABSTRACTStates and towns are increasingly using a new impact analysis technique (one that shows many of the virtues and vices of impact planning generally): fiscal impact analysis. In a recent celebrated case in Vermont, the Pyramid Mall case, in which a shopping center was refused a development permit under “Act 250”, Vermont's state–wide land use law, heavy use was made of fiscal impact analyses. This case raised serious issues about the financial and technical capability of the state – indeed any state – to administer fiscal impact analysis, and about the adequacy of the law to properly guide the use of impact analysis. The central question running throughout the Pyramid Mall case and the use of fiscal impact analyses in that case is whether the administration of land use controls pursuant to fiscal impact analysis is improper government control of competition. The Pyramid Mall case offers an illustration of the effort to control both competition among private units and competition among municipalities; a study of the case reveals the extent to which the effort is effective, optimal, and equitable. The inadequacy of the Vermont laws enabling fiscal impact analysis emerges, and the shallowness of existing judicial review of fiscal impact analysis becomes evident. Guidelines for a proper legal approach to fiscal impact analysis are suggested and alternative mechanisms of review are suggested.