Smart growth in Madison, Wisconsin.

• Author: Schmiedcke, David

Growth is good for a community--or, more accurately, smart growth is good for a community But what does "good" growth look like? How is it measured? How does the quality of growth affect municipal finances? Too often, the answers to those questions are "We'll know it when we see it" or "It doesn't matter as long as the tax base grows."

For decades, city planners have used maps, population projections, and other data in an attempt to portray the impact of different types of development on a city. Often, planners have tried to intuitively and anecdotally explain the impacts of disorganized development (sometimes called "sprawl") compared to more compact, mixed-use development patterns. However, traditional growth scenario planning has lacked a clear way of showing the cost implications of development scenarios.

In recent years, planning organizations have sought to build models to quantify these costs. These efforts have combined sophisticated mapping tools with known unit costs to show the short-and long-term costs of various styles of development.

In these times of strict tax limits, resiliency goals, and quality-of-life expectations, these questions and perspectives are taking on much greater importance. The City of Madison, Wisconsin, is working to answer these questions through a collaboration with Smart Growth America (1) and its work with Calthorpe Analytics to implement the UrbanFootprint growth scenario modeling tool. (2)

PROPERTY TAXES

While all communities have a need for efficient development, it is particularly relevant for Madison because of the city's reliance on property taxes to support city services (more than 70 percent of general fund revenues). Under Wisconsin state law, local governments have very few broad-based revenue sources other than property taxes to pay for services. In addition, statewide concern about the rate of growth in property taxes has led it to adopt strict limits on the growth of local tax levies.

Madison can only increase its levy based on the ratio of the value of new construction to overall property value. Much of the city is already built out, so the allowable property tax growth rate is relatively small (2.2 percent for the 2016 budget). Remaining revenues in the city's general fund, including state aid, grow at a slower pace than property taxes. Exceptions to slow revenue growth have been transient occupancy taxes and building permits, but these sources make up less than 5 percent of general fund...