Article excerpt

Calculating costs of development

In the rapidly developing suburbs, a question that comes up time and again is: Does growth pay for itself? Is the revenue generated by development enough to pay for expanded services necessitated by the same development (roads, schools, water, etc.)? Is the municipal revenue base truly enhanced by growth?

In other words, does development, over the long term, generate enough new tax dollars to pay for new costs?

It can be a difficult question to answer. There is no precise way to calculate revenue gains from development vs. revenue demands.

But the state of Massachusetts has launched an innovative program to help communities get a better handle on the impact of growth as they contemplate the benefits and consequences of different development scenarios within their borders.

It is a program Illinois would be wise to consider modeling.

The Massachusetts Executive Office of Environmental Affairs, a state agency, has created something called the "fiscal impact tool."

Local communities can use this tool, which can be accessed through the state agency's Web site, to compare revenues and expenses resulting from new development in order to determine the development's impact on municipal finances. …