Local governments, especially smaller ones, often lack the expertise to do the sophisticated modeling and projection of revenues and expenditures that is needed to make informed development decisions and provide for resident and business needs over the longer term. Population growth or decline, economic changes, and differing patterns of development will impact revenue and expenditure trends and may knock these trends out of balance.
Regionomics estimates tax impacts of existing and proposed development and analyzes the long-term balance between revenues and expenditures. This can lead either to findings of long-term sufficiency or current or prospective structural imbalance – a case where revenues are insufficient to cover expenditures even during periods of economic expansion. Early warning of a future structural imbalance allows officials to address it planfully before it becomes a crisis requiring drastic action.
END RESULTS
Case Studies
Determining the costs and benefits of comprehensive plan proposals. Most cities and counties release comprehensive plans outlining preferred development patterns over the coming 10 to 20 years. However, these plans rarely include the impacts of these development proposals on the jurisdiction’s long-term fiscal health. The large-scale annexation of existing housing developments, for example, will generate additional tax revenue but will also increase the need for public and emergency services.
The City of Powell, Ohio, hired the planning firm MKSK to undertake an update of Powell’s 20-year-old Comprehensive Plan. Simultaneously, the City hired Regionomics both to quantify the impacts of development proposed by MKSK and to assess the City’s fiscal stability under status quo conditions. Regionomics collaborated closely with MKSK staff to understand the nature of their proposals and worked with the Powell Finance Department to ensure that the City’s financial information was accurately incorporated in the analysis. Regionomics also participated in a variety of Steering Committee, Finance Committee, Council, and public meetings. The result was the Powell Comprehensive Plan Update. Regionomics completed all the analysis presented in Section 4 (Fiscal Analysis) and wrote the chapter.
Regionomics also worked with the city of Marysville and its planning consultant, OHM Advisors, to quantify impacts of proposed development in its Comprehensive Plan. The results of this analysis were published in Appendix A of the plan, together with a detailed demographic and housing analysis.
Contact Us
Ready to get started or have any questions?
Assessing jurisdictions’ long-term fiscal health. Local governments also turn to Regionomics for an independent assessment of their long-term fiscal health. Regionomics uses the jurisdiction’s detailed financial accounts, demographic and economic conditions, and statistical techniques to project revenues and expenditures and provide an assessment of the ability of revenues from existing sources at their current level to sustain the public services that residents and businesses demand.
In addition to the analysis of the fiscal impacts of development proposals in the comprehensive plans of Powell and Marysville (see above), Regionomics completed overall revenue and expenditure projections. The results were published in Section 4 of Powell’s plan and Chapter 5 of Marysville’s plan. While the results of the Marysville analysis were that the city’s finances were well-equipped to sustain and expand public services, Powell was facing imminent structural imbalance, where revenues were insufficient to cover expenditures regardless of the state of the economy. That concern has eased with the increase of Powell’s income tax rate from 0.75% to 2% on January 1, 2022.
The City of Delaware, Ohio, had recently completed its comprehensive plan update when it turned to Regionomics to analyze its fiscal health and the impacts of development proposals. The plan for Delaware proposed general classes of development rather than specific projects. Thus, the analysis considered the impact of 10 acres of each type of development. Regionomics presented the results in a report and a briefing to City Council.
Quantifying positive and negative impacts of tax incentives. Tax incentives and abatements are a widely used and controversial tool of local governments. Columbus City Council and the Franklin County (Ohio) Auditor jointly commissioned Regionomics to conduct a comprehensive study of the economics, benefits, and costs of property tax incentives. The centerpiece of the study was a model estimating the fiscal impact of specific abatement deals on the budgets of the city, the county, and school districts. The model reflected the fact that the true need for the incentive to attract or retain the company and its jobs is always uncertain, as well as the fact that attracting a specific development to a site precludes a possibly more favorable development there in the future. Regionomics created a template based on the model that the Franklin County Auditor used to evaluate subsequent abatements. The report is available on the Publications and Studies page.
Analyzing development impact fees. A growing Ohio municipality had recently implemented a schedule of roadway, parks, police, fire, and general government impact fees for various categories of residential, commercial, and industrial development. Regionomics was hired to evaluate these fees given the likely budget impact of additional residents and workers and requirements imposed by Ohio Supreme Court rulings. The study emphasized, though, that the proposed fees represented the upper bound. Fees need to be both compliant with state requirements and responsive to the market.