Fiscal Impact Assessment: Employment Anticipation Method
The employment anticipation method is a marginal cost approach, like the comparable cities method. Unlike the comparable cities approach, it is based on employment rather than population, and is appropriate for commercial and industrial development projects.
In form, it is the simplest of the three models, although they are all essentially the same in structure. The employment anticipation model requires a simple statement of current city expenses (Figure 12). It does not require a separate accounting of capital and operating expenses. It also requires a fairly simple project description (Figure 13), specifying only the type of project (industrial or commercial), the number of employees, and the condition of the city (growing or declining). The final table of inputs requires a simple estimate of anticipated revenues from the project (Figure 14). The categories of revenue are different from those for residential projects, since commercial and industrial projects generate their flow of revenue differently. Since commercial and industrial projects are usually a single coherent development, revenues can usually be estimated by a simple extrapolation from current charges and taxes.
CURRENT CITY EXPENDITURES GENERAL GOVERNMENT ...... PUBLIC SAFETY ...... PUBLIC WORKS ...... HEALTH & WELFARE ...... RECREATION ...... STATUTORY ...... DEBT SERVICE ...... CITY POPULATION ...... Figure 12 * * * PROJECT CHARACTERISTICS TYPE OF PROJECT ...... (1 IF INDUSTRAL) (3 IF COMMERCAL) NUMBER EMPLOYEES ...... CONDITION OF CITY ...... (0 IF GROWING) (1 IF DECLINING) Figure 13 * * * ANTICIPATED REVENUES TAXES PROPERTY ...... UTILITY ...... OTHER ...... SUBTOTAL xxxx CHARGES SANITATION ...... WTR & SWR ...... OTHER ...... SUBTOTAL xxxx TRANSFERS CDBG ...... OTHER ...... SUBTOTAL xxxx TOTAL NEW REVENUES xxxx Figure 14 There are only four tables of multipliers for the employment anticipation method: two for commercial and two for industrial developments. Of the two for each type of project, one is for growing cities and one is for declining cities. The tables are based on a multivariate analysis of the marginal-cost relationship between number of employees and change in local expenditures, as published in Burchell & Listokin (1978). The tables indicate the percentage increase in expenses by category for each additional employee attracted to cities in the various size-groups. Since the structure of this family of tables is so simple, it is possible to have the spreadsheet select the appropriate information from the tables and enter it directly into the Project Impacts worksheet (Figure 15). The project impact worksheet calculates the increase in total costs due to the proposed development. It does this by multiplying number of employees by the appropriate per-employee multiplier, to arrive at the multiplier for the entire project. The current budget is then multiplied by the project multiplier to arrive at the projected costs. The worksheet then tallies the total costs, compares it to the anticipated revenues, and arrives at the net impact.
PROJECT IMPACTS GENERAL GOVERNMENT xxxxx PUBLIC SAFETY xxxxx PUBLIC WORKS xxxxx HEALTH & WELFARE xxxxx RECREATION xxxxx STATUTORY xxxxx DEBT SERVICE xxxxx TOTAL COSTS xxxxx TOTAL REVENUES xxxxx NET IMPACT xxxxx Figure 15 
© 1996 A.J.Filipovitch
Revised 11 March 2005