Urban & Environmental Economics – CMP 3400 Assignment 2
Urban & Environmental Economics – CMP 3400 ASSIGNMENT 2 – FISCAL IMPACT ANALYSIS
As an employee of the planning department of Witch Hazel, Wisconsin, you have been asked to conduct a fiscal impact analysis of a proposed townhome development using the average per capita method. The following information is available:
- Proposed residential development: 30 senior condos, average market value $250,000 per unit; 20 3-bedroom condos, average market value $375,000 per unit.
- Current municipal taxing and spending facts: The municipality does not have a separate school district.
- Residential tax base: 8,000 existing residential units, with an average market value of $300,000; assessment ratio of 50%; residential tax rate of $13.33 per $1000 assessed value; residential property accounts for 80% of real property.
- Schools: currently 4,200 schoolchildren; state school aid per student $2,500; local school expenditure per student $3,300; total school budget $24,360,000.
- Town budget: excluding schools, expenditures are $26,000,000; town expenditure on schools is $13,860,000; combined town budget totals $39,860,000.
- Revenues: total miscellaneous revenues $15,000,000; total property tax levy is $24,860,000, including $16,000,000 from residential property and $8,860,000 from non-residential property.
Questions to address:
- What is the expected new property tax revenue associated with the new development?
- How much other (miscellaneous) revenue is expected from the new households?
- What are the total school costs and total new state school aid expected in conjunction with the development?
- What are the non-school service costs associated with the development?
- What is the net fiscal impact per year on Witch Hazel’s tax base?
- If Witch Hazel is a rapidly growing community with service capacity already stretched to the limit, would you suggest a different fiscal impact analysis method? Which one and why?