SPATIAL PLANNING AND FISCAL IMPACT ANALYSIS: Developing an understanding of spatial planning can help you better plan for land use in your community.

• Author: Tomaselli, Linda

As part of a realistic long-range financial forecast, a finance director needs to estimate the impact of future land use--and this calls for a good picture of revenue and expenditure patterns by land use type. Spatial Planning and Fiscal Impact Analysis Method: A Toolkit for Existing and Proposed Land Use (Routledge, 2019) describes a way to link information from finance directors to planners who are using geographic information systems (GIS). It provides finance directors with information about where the revenues and expenditures in their cities are located on an annual basis, and which types of land uses generate surpluses or deficits. The planning and finance departments can also provide immediate fiscal impact information for a currently proposed development.

The concept upon which the Spatial Method is based is illustrated in Exhibit 1. Revenues and expenditures are spatial. Revenues come in from parcels, and expenditures go out to service parcels, as shown in the circles in the chart. Typical business processing systems (and perhaps local government processing systems) are based on data processing of transactions, as shown at the bottom of the chart's pyramid. These are summarized to make operational, tactical, and strategic decisions. In the case of local government systems, summary data for a year is summarized in the comprehensive annual financial report (CAFR), which provides the totals of revenues and expenditures by type. Under the spatial method, the factors that reflect city business operations turn the typical pyramid into a cone, with parcels located at the base. The planning department makes decisions based on parcel summaries by land use and/or neighborhood. This information also provides guidance in preparing the city's comprehensive plan, which guides the proposed spending for capital improvements. In an ideal world, the finance director would have a transaction processing system capable of locating where each dollar of revenue comes from and where each dollar of expenditure is spent. But this is not how financial systems are organized.

Exhibit 1: The Spatial Fiscal Impact Method Concept Revenues and Expenditures are Spacial Revenues Expenditures An ideal transaction processing system Business Decisions * Strategic * Tactical * Operational * Data Processing [transactions] Planning Decisions * Spending and Capital Improvements * Comprehensive Plan * Land Use/ Neighborhood Analysis * Parcel Level Analysis Revenues and expenditures are almost always spatially attributable to parcels and land uses, whether they are based on assessed and market values, police and fire/EMS calls, population, employment, locally maintained streets, parks, or other factors. All of these factors can be allocated to parcels in the city, thanks to the availability of the parcel map created by the surveyor. The assessor has also added many attributes such as owner names, addresses, housing types and sizes, and generalized land uses.

The objective is to estimate fiscal impact by land use. The map in Exhibit 2 shows the generalized land uses from the assessor for the City of Bloomington, Illinois (population 78,000). Bloomington is the case study city on which the book is based. The assessor and planner provided more detail on the land use categories, such as the breakdown of residential into apartments, duplexes, multi-family, single family, and townhouses. The administrative center of the city is located where the small parcels are clustered on the map.

Distribution Factors for Parcels

The Spatial Method requires that a parcel database be developed using GIS, including the factors listed below.

Direct distribution factors:

* Net assessed value and property taxes

* Police calls

* Fire calls

* Locally maintained road frontage

Indirect distribution factors:

* Population

* Employment

* Market value

Direct factors can be directly identified using GIS. Property taxes are already allocated by parcel, based on the...