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Fiscal Impact Modeling The TexSAFE Experience. Garen Evans Community Resource Development Mississippi State University. Tex $ AFE. Decision-making “What if” scenarios Community Education Linkages in a local economy Policy Analysis. Review of Impact Models. Input-Output Analysis - PowerPoint PPT Presentation
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Fiscal Impact ModelingThe TexSAFE
ExperienceGaren EvansCommunity Resource DevelopmentMississippi State University
Tex$AFE
Decision-making “What if” scenarios
Community Education Linkages in a local economy
Policy Analysis
Review of Impact Models
Input-Output Analysis Wassily Leontief
Computable General Equilibrium Kraybill et al. 1992
Econometric Adams et al. 1975
Simulation Law and Kelton 1982
Input-Output Analysis
Wassily Leontiefb. 1906
Nobel Prize, 1973…for the development of the input output method and for its application to important economic problems.
x = (I-A)-1 y
Input-Output Analysis
Advantages Inexpensive & ease of use
Disadvantages Theoretical: CRS, fixed inputs,
elasticities Practical: lacks fiscal component,
easily abused.
Integrated Modeling
“The theoretical motivation for integrating econometric models with input-output models stems from the restrictive assumptions of either component when used by itself.”
(Rey 2000)
Strategies: embedding, linking, coupling
Tex$AFE: The Idea
1. Identify Direct Impacts2. Estimate secondary impacts with
input-output analysis.3. Use total I-O impacts with
Tex$AFE.4. Estimate fiscal changes.
TEX
$AFE
New jobs and earnings
Secondary data (254 counties cross-sectional)
IMPLAN Input-output model
Impacts: output value-added earnings jobs
Coefficients
Spreadsheet Secondary data for county
Baseline, project, and impacts
Regression equations
Tex$AFE: What’s Inside
Spreadsheet Model Easy to use and maintain Multiple spreadsheets
Base model data Local data Statistical estimators Modular results
Tex$AFE: Data Demographic
Population Total, school-aged, elderly
Commuting Economic
Jobs, earnings, income, unemployment Fiscal
County revenues, expenditures Rates: city, school district, special district
Tex$AFE: Estimators
NETCMT =f(jobs, unemp)POP=f(jobs, netcmt)CLF=f(pop,hisp)SAC=f(pop,hisp)INCOME=f(pop,earn)
RETAIL=f(income)PROPV=f(income)HOTREV=f(income)MIXB=f(income)
CA_REVX=f(pop)CA_IGED=f(pop)CA_DEXP=f(pop)
Tex$AFE: Calibration
Tex$AFE: Output
DemographicsProperty RevenuesSales RevenuesOther RevenuesExpendituresAccounts
Tex$AFE & Wind Turbines
82.5 megawatts on 3200 acres $180 million
Tex$AFE & Wind Turbines
Pecos Wind Farm Property Taxes:
Buena Vista & Iraan ISDs: $22.8 million (25pv)
County Taxes: $8.2 million without tax abatement $2.4 million with tax abatement Present Value of 10 year tax abatement:
$5,794,276
Tex$AFE & Cheese
$97.5 million1 cheese plant24 dairy farms
Tex$AFE & Cheese
The county property tax base increases by $109.5 million.The net fiscal impact for all jurisdictions in the county is $1.275 million annually (nominal dollars).The net present value of the fiscal impact over 20 years for all jurisdictions is $17.12 million (real dollars).
Tex$AFE & Space Transport
First commercial spaceport in Texas.
Fiscal impacts: Promo/enabling
Economic impacts: Ascender Project
Distribution of Sales Tax Revenues
Where to Start?
Shields, M.. 1998. An Integrated Economic Impact and Simulation Model for Wisconsin Counties. Ph.D. Dissertation. University of Wisconsin. Madison.
Swallow, B., and T. Johnson. 1987. A Fiscal Impact Model for Virginia Counties. Review of Regional Studies 17(1):67-74.
Swenson, D., and D. Otto. 2000. The Iowa Economic/Fiscal Impact Modeling System. Journal of Regional Analysis and Policy 28:64-75.
Community Policy Analysis Networkhttp://rupri.org