Assessment of Regional Fiscal and Economic Impacts of Local Development Decisions

Chicago Metropolitan Agency for Planning (CMAP)

In 2012, SB Friedman was engaged to assist the Chicago Metropolitan Agency for Planning (CMAP) in assessing the fiscal and economic impacts of local development projects on the Chicago region. CMAP seeks to understand the impacts of development patterns on infrastructure costs, service capacity, duplication of services, employment, the regional economy and other metrics. SB Friedman’s primary role in the broader analysis included: defining the land uses to be analyzed and the associated data metrics to be collected; collecting and estimating cost and revenue parameters for operations, maintenance and infrastructure associated with particular development projects; and estimating the economic and fiscal impacts of each project.

Key components of SB Friedman’s work include:

 

  • Defining 13 land use prototypes and selecting 30 recent developments for analysis;
  • Compiling recent expenditure data by department and district, including municipal departments, fire, police, parks, library and school districts for 10 case study communities;
  • Estimating actual revenue generation associated with each project, including property tax, sales tax, municipal utility taxes, per capita rebates and impact fees;
  • Determining the proper allocation method (e.g., residents, lane miles, service calls) for each department and district; and
  • Conducting detailed in-person interviews with municipal department and district heads to understand current levels of service, recent and planned capital investments and service expansions, and stabilized capital expenditures and departmental costs that are likely to vary with population or employment growth due to new development.

In addition, SB Friedman developed a comprehensive fiscal impact model allowing for average and modified average cost calculations at the departmental/district level. Net fiscal impacts were calculated for each project by taxing district, and then compiled by land use prototype and community for comparison.

Results: SB Friedman delivered the fiscal impact data and analysis results to CMAP in May 2013. CMAP has prepared a comprehensive report incorporating SB Friedman’s findings and additional fiscal impact research, available at http://www.cmap.illinois.gov/economy/tax-policy/Impacts-of-Local-Development-Decisions.