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Adaptation of a Fiscal Impact Model for the Twin Cities Region

With continuing cuts to Local Government Aid and the sluggish economy serving to highlight the real costs of inefficient and low-density development patterns, interest in fiscal impact analysis (FIA)—which estimates the short-term and long-term fiscal impacts on local governments of new development or redevelopment—is growing. In spring 2010, CURA's Community Growth Planning Assistance Center (CGPAC) conducted a web survey of cities and townships in the 11-county metro area to gauge use of and interest in FIA. Of the 74 communities that responded, only 10% reported that they currently use FIA to evaluate development projects or alternative development scenarios. The most frequent reason given (43.8%) was that “no staff are trained to do fiscal analysis.” Nearly 70% of respondents expressed interest in using such a tool if assistance was available from a trusted source.

In response, CGPAC has been working to adapt for use in other communities in the metro area an existing per-capita fiscal impact model originally created for HennepinI County. The goal is to design an easy-to-use tool that will make the long-term costs of inefficient development patterns visible to communities by enabling them to compare the fiscal impacts of different development scenarios and anticipate the fiscal impacts of specific development proposals. To date, the project team of Robb Luckow (Hennepin County), Luis Pereira (City of St. Paul), and Mike Greco (CURA) have:

  • refined the model, improved and simplified the model interface, and collected data to populate the model for use by the City of St. Paul Planning and Economic Development Department. To date, St. Paul staff have used the model to analyze the fiscal impact of several proposed developments, and to model scenarios for redevelopment of the Ford Site and sites along the Central Corridor LRT line;
  • evaluated the requirements and availability of data to populate the model for use in communities outside of Hennepin, beginning with the five cities along the Northstar Commuter-Rail Corridor;
  • conducted a sensitivity analysis that suggested several refinements to calibrate and simplify the model;
  • conducted research on how communities anticipate the marginal costs of new development--which are highly dependent on the nature of each community’s budget and their level of service standards for infrastructure and public services--to inform the creation of a supplemental marginal cost worksheet to accompany the fiscal impact model;

CURA continues to adapt the model for broader use in and dissemination to other communities in the metro area. This work includes identifying a means to provide ready access to the data needed to populate the model, and developing a public engagement/educational process to facilitate use of the tool. CURA is currently seeking additional partners and funding to take the model to scale in the Twin Cities metro area. You can download a PowerPoint presentation about the model and intended next steps.

Work on this project was guided by an advisory committee that included Jon Commers (Donjek Associates, Metropolitan Council), Deb Detrick (Metropolitan Council), Laura Kalambokidis (Department of Applied Economics, U of MN), Robb Luckow (Housing, Community Works, and Transit, Hennepin County), Luis Pereira (Planning and Economic Development, City of St. Paul), and Steve Taff (Department of Applied Economics, U of MN).

Project Award Date: 
2011-01-00
Community organization or agency: 
City of St. Paul Planning and Economic Development Department
CURA Contact: 

CURA Research Areas: