Resources are at a premium for local governments, and this is particularly true for many small towns and rural communities where tax base has shrunk, infrastructure has deteriorated, and service needs are growing. In this context many local governments welcome any new development as a source of new tax revenue and a help to the government’s finances. In fact, with respect to local government costs and revenues, not all development is created equal. The type of development and its location can make the difference between a development that helps a locality balance its books and a development that makes the situation worse. Adopting a fiscal impact analysis policy can help local government better understand the revenue and costs that come with new development.

This toolkit provides an overview of what Fiscal Impact Analysis Policies are and how local communities can create and implement them. It also includes a case study of this type of policy in action, and a model policy that rural communities can use to create a Fiscal Impact Analysis Policy of their own.