The Impact of New Industry on County Government Property Tax Revenue

The attraction of new industry is an ongoing concern for most local officials. Generally, local officials are aware of the private sector benefits of new jobs and income. Attention is beginning to be paid to secondary private sector impacts such as the effect of new industry on local wage rates and the problems associated with in-migration of labor to fill new jobs. Borts and Stein (Chapter 9) give a theoretical discussion of these issues.In addition researchers and policy makers are interested in the development of models that estimate the impact of new industry on local government expenditures and revenues. Many computerized versions of local fiscal impact models are reviewed in a recently published text (Burchell and Listokin, pp. 345-59). The popularity of these models is understandable because of the potential benefits to be derived from accurate forecasts of local fiscal impact. For example, a community can determine the magnitude of a tax incentive it can offer to industry and still maintain a positive fiscal impact for local government. Zoning laws can be written to encourage land use patterns that will be efficient from the public sector's perspective if the public expenditures and public revenues associated with alternative land use patterns can be predicted. Finally, local areas may be able to demonstrate to state government that a large-scale industrial project will benefit the fiscal position of the state but be a burden to the local fiscal balance.