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Fia Analysis

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Applied Public Finance

Fiscal Impact Analysis 3 - FIA 3 Assignment * Briefly describe (1-2 pages) the American Farmland Trust (AFT) Cost of Community Services methodology and illustrate the COCS approach from the Skagit County, WA case study.

The American Farmland Trust Cost of Community Services methodology compares the ratio of expenditures to revenue for different land uses, which are used in municipal land-use planning. Land uses, from residential / commercial / industrial , agricultural / and open space, largely determine the different revenues and expenditures of the municipal government because they generated different amounts of revenue from being taxed at different rates. Expenditures also vary from municipal services because different services need to be provided per use like education, police protection, fire protection, roads, and other infrastructural uses.
The basic methodology of CCS studies is to first partition land uses into three classes: residential, commercial / industrial, and agricultural / open-space. Expenditures and revenues from the municipal budget are then allocated to the three different land-use categories. Although the specific methodology for fiscal allocations differs among CCS studies, the final result is always a ratio of expenditures over revenues for each of the three land uses. For example, a residential ratio of 1.2 means that for every U.S.$1.00 of revenue raised from residential land uses, U.S.$1.20 of expenditures is spent on residential land uses. Studies then report a separate ratio for residential, commercial/industrial, and agricultural/open-space land uses. A general finding of CCS studies is that commercial/industrial and agricultural/ open-space ratios are less than one while residential ratios are greater than one.
For the Skagit County’s COCS method was similar to the one illustrated in our readings.

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