Impact Methodologies

Fiscal

Forecasting Methods

Method 1. Fiscal Accounting Systems

Fiscal accounting systems forecast how changes in population, employment, and income patterns will lead to changes in expenditures and revenues for government agencies. Expenditures typically include police, fire, schools, social services, utilities, etc., and revenues typically include various taxes and fees. Fiscal impact models normally focus on the effects of projects which are either very localized or very skewed in terms of the affected sectors of the economy. For instance, a new residential development or a new office park, either one made possible by transportation improvements, can lead to very different effects on school demands, property tax revenues and local service demands.

Guidebooks for fiscal impact analysis have been developed by the Urban Land Institute (Burchell, Listokin, et al., 1994) and the Center for Urban Policy Research at Rutgers University (Burchell, Listokin, and Dolphin, 1985).
FISCALS is the second generation of Tischler & Associates' MUNIES software that was widely used in the 1980s. FISCALS is a family of software systems, each of which is custom designed for every community. Among its features is the ability to project "lumpy" capital facilities, factoring lag-lead time of construction, forecasting associated operating expenses once the facility opens, and considering available and excess capacities. FISCALS operates in a spreadsheet environment and can be used with Microsoft Excel, Lotus 1-2-3 and Quattro Pro.

Method 2. Specialized Cost Models

Infrastructure cost models estimate the costs of infrastructure - roads, water, sewer, etc. - as a function of the characteristics of development. Types of infrastructure modeled include transportation (roads, sidewalks, transit), water and sewer, telecommunications, gas, and electric utilities. Specialized cost models may rely on some of the same data or cost functions as fiscal accounting systems. They differ in that their focus is on the total costs of infrastructure, rather than the cost and revenue impacts to specific government units. The models may also track the level at which costs are accrued (site developer, municipal service provider, or regional agency). Examples include:

The Infrastructure Cost Assessment Model developed as part of the Envision Utah project (see case study). The model estimates infrastructure costs by density and by type of development (greenfield, infill, or redevelopment.)
The Social Cost of Alternative Land Development Scenarios (SCALDS) model, developed by FHWA. SCALDS estimates roadway, water, and sewer costs by development type and density.
InfraCycle software, developed for the Canada Mortgage and Housing Corporation and the Regional Municipality of Ottawa-Carleton. InfraCycle calculates the cost of municipal infrastructure in support of land use plans for greenfield and brownfield applications. It is primarily designed for site-level analysis and has been applied in Ottawa and Nepean, Ontario.
Revenue forecasting and cost estimation models also have been designed specifically for transportation agencies for the purposes of financial planning. An example is The System Cost and Revenue Estimation (SCARE) model, a software package that will provide planners with tools for revenue forecasting, cost estimating, and program balancing. This software is currently being developed by FHWA.

Method 3. Simulation Models

Simulation models are integrated modeling systems that include an input-output (I-O) model to predict economic impacts of different policies, which in turn affect fiscal impacts. Simulation models include:

The TELUS system, developed by the New Jersey Transportation Institute, Rutgers University and the North New Jersey Transportation Planning Authority. TELUS is based on a database containing key information about transportation projects. It then estimates economic impacts through an I-O model as well as tax impacts on local governments. A land use modeling component is being developed to estimate the fiscal impacts of changes in land use induced by transportation investment.

The REMI simulation model, primarily used for economic forecasting, also contains a fiscal element. Because of the regional level of analysis (county or greater), expenditures and revenues generally grow at the same rate. In fiscal analysis, REMI is primarily used as a driver for fiscal accounting systems (Method 1).

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