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Fiscal Impact Analysis: <br />How Today's Decisions <br />Affect Tomorrow's Budget <br />Most states require local governments to prepare <br />a balanced budget annually. However, most states <br />do not require that jurisdictions conduct fiscal <br />impact evaluations to help ensure that local officials <br />understand the short- and long-term fiscal effects <br />of land -use and development policies and of new <br />developments that are approved. A fiscal impact <br />analysis clarifies the financial effects of such <br />policies and practices by projecting net cash flow <br />to the public sector resulting from residential and <br />nonresidential development. A fiscal impact analysis <br />can enable local governments to address short- and <br />long-term planning, budget, and finance issues. <br />This report discusses the applications of fiscal <br />impact analysis and reviews common methodologies <br />used to collect and analyze information. Five case <br />studies illustrate how fiscal impact analysis can be <br />used for a variety of purposes depending on local <br />circumstances. <br />Contents <br />Defining fiscal impact analysis <br />Applications of fiscal impact analysis <br />Methodologies <br />Case studies <br />Conclusion <br />1 /132 <br />