A Fiscal Impact Model for Rural Industrialization

The quest for expanded domestic energy pro-duction has led to increased interest in the coal reserves of the sparsely populated western states [Federal Energy Administration]. The rapid popu-lation influxes associated with large-scale develop-ment can easily strain the fiscal resources of the relatively small communities that would be affected [Federation of Rocky Mountain States]. These communities face a greatly increased demand for public services with a local tax base and bonding capacity that already may be inadequate [Rocky Mountain Institute for Policy Research]. The fiscal difficulties that these communities are likely to encounter have become an issue at all levels of government. However, if adequate plan-ning and financial assistance is to be provided these communities, an effective method of project-ing the effect of a new development on public costs and revenues is required. The purpose of this paper is to demonstrate the use of a model for projecting the effects of large-scale industrial development on public sector costs and revenues. The model is deomon-strated using the example of an electric power generating facility now under construction in McLean County, North Dakota. Although the coefficients used in this study reflect North Dakota data, the general issue and analytical method are believed to have widespread application. The Model Changes in public sector costs and revenues were estimated using a model based on a set of regional input-output coefficients and a set o