Impact Methodologies

Fiscal

Overview

Fiscal impacts can be measured from two perspectives:

1. The overall costs of infrastructure associated with alternative forms of transportation and development, including costs to both the public and private sector; and

2. Expenditures and revenues for specific localities or government agencies, including the costs of providing infrastructure as well as tax or other revenues that result from development.

The first perspective - overall costs - can be weighed in conjunction with the other costs and benefits of alternative transportation and development patterns, such as travel benefits and environmental impacts. The second perspective is primarily one of distribution of costs and benefits. This perspective can assist in developing equitable financing schemes, appropriate tax and land use policies, etc.

Overall infrastructure costs are made up of regional and local infrastructure costs. Regional costs include arterial roads and highways, as well as regional utilities such as water supply facilities. Local costs include local roads, sidewalks, and utilities. At both levels, the density and design of development can affect the infrastructure cost per unit of development.

Fiscal impacts to specific localities are driven by:

• The amount and location of development by type. Tax revenues and service costs vary by type of development. The amount of development in a given area is in turn affected by:

• The location of transportation projects. Methods for discussing the impacts of transportation improvements on land development are discussed under "Impacts - Land Development."

• Land use policies. Zoning restrictions, in particular, can limit development to specified densities, types, or locations. Zoning and development options in neighboring jurisdictions can also affect development in a given jurisdiction.

• Fiscal policies, such as fee and tax structures and rates. For example, some local governments charge impact fees to recoup the costs of providing infrastructure for new developments. Others cover these costs through general tax revenues.

For any specific locality, the existing infrastructure of schools, utilities and services may or may not have the capacity to absorb more growth without the addition of more costly capital investment. Thus, localized impacts can be very important to understand. On the other hand, balanced regional growth (denoting a normal mix of residential, commercial and industrial activity) will tend to grow all forms of expenditure demands (costs) and taxes (revenues) in the same proportion, and hence will tend not to shift the public revenue-expenditure balance.

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