PAY FOR ITSELF
For many years, the American Farmland Trust conducted studies on the Cost of Community Service (COGS). The studies were done to determine the fiscal impacts when land was converted from farm or forest land to other types of land use. Eventually, they decided that there were better ways to spend their money. Why? Year after year, the studies showed the same thing - all residential development costs a community more than it returns in revenues.
Later, Jeffrey Dorfman, at the University of Georgia, did an analysis of these studies collected from a variety of sources. He says,"Cost of Community Service (COCS) studies involve a reorganization of a local government’s (usually a county’s) records in order to assign the government revenues and costs of public services to different classes of land use or development such as residential, commercial, industrial, farm, forest and open lands."
"About 90 COCS studies have been completed by a variety of researchers around the country for cities and rural communities. The maximum, median, and minimum ratios of local government revenues-to-expenditures collected from these studies are shown in Table 1. The “Minimum” row shows that for every dollar the county generates from the residential category, it spends $2.11 in services. The commercial/industrial and farm/forestland categories show that, on average, the government receives more than it spends and therefore, these land uses create a surplus. The numbers show the fallacy of depending on residential development as a sound growth policy. In not a single instance did residential development generate sufficient revenue to cover its associated expenditures."
Excerpts from The Fiscal Impacts of Land Uses on Local Government.
Jeffrey H. Dorfman, Land Use Studies Initiative and Department of Agricultural & Applied Economics, The University of Georgia, 2006