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Information / data Forecasting Economic and/or Financial Impacts

Doberman

Cyburbian
Messages
209
Points
9
Unfortunately, it seems like attempting to quantify the economic impacts of development and any associated incentives, rarely happens.

How should one go about trying to forecasting what would be cost-benefits to an area's economy of a development to include any incentive? This seems pretty involved for large scale developments. For instance, a large development that would have agglomeration of economies effect may be worth incentives for the anchor business under the right circumstances. Or capturing the marginal cost for a city approving a tax abatement.

I did find this, which seems a little simplistic, but the math is pretty straight forward just in terms of looking at municipal revenue streams etc.
www.sceda.org › associations › files › Economic Impact Analysis2012
 

WSU MUP Student

Cyburbian
Messages
10,649
Points
47
Years ago the Federal Reserve Bank of Chicago developed an Excel-based tool for forecasting fiscal impacts of developments (or closures if you put negative numbers in) called FedFIT. It was pretty comprehensive and looked at demographic data, new housing permits, commuting patterns data, and a boat load of other indicators. You would select your local municipality based on FIPS code; input the development sector, number of new jobs, and average annual salary; then input all of the local tax taxing authorities and milage rate (and local sales and income tax if applicable). The tool would then use basic multipliers for your region from BEA RIMS II (as well as a bunch of other data) and come up with a projected direct and indirect fiscal impact for each of your local taxing authorities. There would also be projections for the number of new housing units and new residents moving into the area, if the development was large enough. The nice thing about the FedFIT was that it also allowed you to account for any sort of TIF or abatement in the formulas. There are still some sites out there where you can download it (at least there were last time I looked) but the Chicago branch stopped updating and supporting the product maybe 7 or 8 years ago now.

There are a number of tools out there for estimating economic impacts and projecting things like indirect employment changes like EMSI or IMPLAN. IMPLAN is quite a bit more comprehensive and more expensive while EMSI is less robust but more user-friendly. EMSI began as a company strictly measuring economic impacts but slowly moved their focus over to workforce development and labor market information. They still offer input-output modeling but it doesn't seem like they've put much effort into improving or building out that side of their business over the past decade.

You can also purchase a set of multipliers directly from the BEA RIMS II program for your region. Compared to the cost of EMSI or IMPLAN, the RIMS II are much more affordable, but require more work on your end. If your community is part of a larger region with a big chamber of commerce or COG with an economic development team, they might actually already have a subscription to a tool like EMSI which you might have access to if you are a member. Many local community colleges and workforce development boards also have access to EMSI.

If you only need an impact study done once in a great while or if you are trying to forecast the impact of a particularly large development, you might consider reaching out to the economics department at a university in your state as they may offer these types of services at a cost, maybe rolling it into an overall 1 or 2 year economic forecast for your community or region.
 
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