William H. Oakland and William A. Testa
Many suburban communities experienced rapid business development and employment growth during the past two decades. Planners and development officials encouraged business growth not only because of increased employment opportunities for their constituents, but also because they may have believed it would result in fiscal benefits paid for by non-resident business owners. 1
These beliefs have recently been challenged, however, by some urban planners and other analysts of the suburban growth process who maintain that business development brings along high costs in associated public services and infrastructure, and that intergovernmental aid to pay for these costs is too low (see White, 1975; DuPage County, 1991; Gömez-Ibéez, 1993; Ladd, 1994). Critics of urban land use expansion further contend that job suburbanization isolates the urban poor from gainful employment, contributes to overdevelopment of land and spoilage of agricultural land at the urban fringe, and raises overall metropolitan area public service costs by requiring new infrastructure that duplicates what already exists in the urban core. This chapter assesses the local fiscal impact of business development by first reviewing previous studies and then investigating the statistical relationship between business development and residential property tax rates for 115 Chicago suburbs during the 1980s.
Previous studies have assessed the fiscal impact of business development using two different methodologies. One approach generalizes from the outcomes of many different case studies that tabulate the fiscal costs and benefits of individual business developments. The other examines the statistical rela-____________________