As I outlined in the last post on this topic, OKI’s Fiscal Impact Model was designed to provide every community in the OKI region with an off-the-rack option for fiscal impact analysis, instead of requiring everyone have to have that analysis custom-made (and, as a result, most communities not looking at fiscal impacts at all.) However, for OKI, the challenge was less like designing a series of suits for people of different sizes, and more like designing a series of suits for people whose arms and legs stick out from different places. If you’re going to develop a first-of-its-kind fiscal impact model, starting out with a region that includes three states, about a dozen different local government structures and more flavors of taxes and services than the local UDF ice cream chain, is not exactly beginning with an easy assignment.
So why would someone take this on? OKI is the Metropolitan Planning Organization for the Greater Cincinnati region, which means that it is reponsible for distributing federal transportation funds, among a lot of other things. OKI’s leadership realized as far back as the early 2000s that they had to take a more proactive approach to the issues of sprawl and land use because population trends in the region were quickly outstripping the foreseeable supply of transportation funds. An MPO doesn’t have any power to influence local land use decisions, but the MPO becomes responsible for funding the transportation systems demanded by those new residents. Some MPOs deal with this challenge by… well, by not dealing with it, but OKI created a strategic plan for influencing land use planning in its region, with the long-term goal of conserving transportation funds.
One of the recommendations of that strategic plan was to create a Fiscal Impact Model. There are a handful of fiscal impact models available nationally, ranging from a simple web-based estimate to a 6-mb Excel file developed by the Federal Reserve. But each of these has notable shortcomings, either in terms of the value of the information generated, or in terms of its clarily and its ability to be used in day-to-day decisions. Given three different states, one of which has a largely different local tax structure from the others, creating that model was understood from the start as a ground-breaking proposition.
Next: how a fiscal impact analysis usually works, and how the OKI Model moves the needle.