Fiscal impact analysis concerns itself with the relative tax implications of a proposed change in land use or land use policy. Of all of the aspects of a development proposal, fiscal impacts can be the most controversial community-wide aspect of land development. Even more importantly, the fiscal effects of a proposal are generally the easiest to distort, and therefore need to be handled with care.
Hudson Highlands Environmental Consulting can perform fiscal analyses for different land uses using a variety of available methodologies. Fiscal analyses can provide valuable information in many different situations, and can take a variety of forms, including:
- Revenue projections relative to property taxes based on construction cost/market valuation and/or income approach
- Revenue projections relative to sales taxes for projects including a retail component
- Revenue projections relative to income taxes for projects that generate large numbers of workers.
- Evaluation of effects of property tax abatement for projects in areas with commercial and industrial abatements, or residential property tax abatement
- Projections of costs of new development based on analysis of existing and proposed budgets, and existing land use and property value distribution in a municipality
- Comparative fiscal analysis of development options
Where significant community concerns are identified, experience has shown that certain actions taken prior to proposing a major change in land use in a municipality can prove beneficial for the overall success of a project. Sensitivity to surrounding land uses, the preservation or enhancement of property values; and an evaluation of the overall effect of large-scale changes in land use, or alternatively, an extended period of vacancy, on the tax base, can make the difference between local political leaders taking a development proposal seriously or dismissing it out of hand.