TOWARD A MINNESOTA MODEL OF THE FISCAL IMPACTS OF RESIDENTIAL DEVELOPMENT

Land use has become a critical issue for Minnesota communities, and for many of those on the suburban fringe, the central land-use policy question is whether or not to approve new residential development. New residences may bring increased property tax revenues, but the new residents will demand additional services from the county, city, utilities, and school district. On net, the impact on finances at all levels of government, especially into the future, is not always clear. In this paper, we describe some of the possible roles for the Extension Service in helping Minnesota communities to predict the fiscal impacts of residential development. We list some principles of fiscal impact modeling, describe an existing fiscal impact tool, and explain a number of issues that arose when that tool was used to estimate the impact of residential development in two Minnesota counties. Finally, we describe a possible framework for the next generation of personal computer-based, fiscal impact models.