ON TO 2050 recommends communities incorporate market feasibility and assessments of long-term infrastructure costs in local planning efforts and development decisions. Underpinning plans with market and fiscal analyses is necessary to help communities develop in a manner that they can sustain over the long term.
Currently, many communities assess fees for short term infrastructure needs, like water main extensions or new stoplights and turn lanes. However, they often do not assess the mid and long term costs of maintaining new infrastructure or more heavily utilized existing facilities. This can lead to quickly increasing taxes to maintain or rebuild road, water, and other infrastructure. At other times, communities may extend infrastructure for prospective development that is not realized, leaving them few options to recoup costs.
Planning for current market conditions as well as major shifts in the context of local and regional goals can help local governments create implementable plans. In addition, planning must strongly incorporate assessment of both local fiscal impact as well as long term costs to supporting jurisdictions. This is a particularly important consideration for communities at the developing edge of the region, who must align expansion proposals with the immediate and long-term cost of the new infrastructure required to support that development. Fiscal and Economic Impact Analysis of Local Development Decisions also provided information on municipal fiscal impact analysis practices.
Basing plans primarily on potential near term fiscal outcomes without tying those outcomes to market realities can lead to overbuilding of some development types and construction of underutilized public infrastructure, leaving communities with the costs of supporting development without revenues to match. In particular, the state distribution of sales taxes to municipalities based on sales made within their jurisdictions may lead some municipalities to promote excessive retail construction, which results in high vacancy rates compared to other regions.