The Fiscal Impacts of Alternative Land Uses: What Do Cost of Community Service Studies Really Tell Us?

Abstract

How land is used in a community affects local taxes, which local services are provided, and the quality of life. This paper uses information from six Pennsylvania municipalities to examine and critique a popular method of calculating the fiscal impacts of alternative land uses. The Cost of Community Service ratio compares the revenues provided by different land types to the cost of providing services to those lands, and helps identify which types of land uses should be encouraged by communities and which types should be treated cautiously. The research finds the methodology may be useful in some situations, but it has some major limitations practitioners should understand.