Developments and Dollars
An Introduction to Fiscal Impact Analysis in Land Use Planning
Checklist: Elements of a Good Fiscal Impact Analysis
There is no single "correct" approach to fiscal impact analyses, but their reliability and usefulness can be enhanced when a number of factors are present. While the list we present here is by no means exhaustive, an interested reviewer should determine whether the analysis contains the following elements:
- The chosen methodology is appropriate to the analysis and the jurisdiction.
- The accrual of costs and benefits to different jurisdictions is recognized and accounted for. Consideration is given to impacts on other major overlapping jurisdictions and service providers, particularly those responsible for schools (particularly when the development has a residential component).
- A reasonable basis for selection of service levels and revenues is provided. If existing service levels, per capita costs, and revenues are applied, an explicit justification should be given for their selection.
- Both revenues and costs are linked to demographic and economic characteristics of the project or scenario.
- The basis for determining capital costs is explicitly stated.
- Use of multiplier approaches is limited only to regional analyses, and multipliers are applied to the cost side as well as to the revenue side.
- Realistic valuation data and build-out scenarios are used.
- The key variables to which the analysis is most sensitive (such as valuation, number of pupils, build-out rate, etc.) are identified and sensitivity analysis of these variables is provided.
- All findings are presented in constant-dollar terms.
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