Agenda - 01-10-1994 - Laserfiche WebLink

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s r. . ,,,i: •_.c.0 ��.� i,:. ,.:, :,1: Size meas- ally result in increased local government revenue ures indicate pacity.It follows that the more growth that occurs, _ - that both popu- the more iocal governments will spend per capita - 300 lation and jobs because the per-resident revenue capacity is higher. IL are positively It is not surprising that growth tends to be related !r = 200 -: _ related to reve- to increases in local government expenditures per nue capacity. capita.But these higher expenditures derive from the 10o As shown in greater revenue-generating capacinr of the private 13 Figure 1,an economy in high-growth areas,not from higher per- increase in the unit service costs. Growth enables local govern- ` 10,000 ' 210,000 410.000 level of jobs per ments to spend more without increasing tax rates. sias of capita by 50 ULI's analysis tested whether or not other fac- results in an tors are more or less important than variations in _ 1=D00 additional S237 revenue-generating capacity in explaining variations in revenue ca- in local government expenditure levels.It did so by C 800 pacitz-per cap- exploring the relationship of total general fund ex' ita while each penditures per capita to various demand/need and additional 50,000 supply factors(including revenue capacity),under 400 in population the assumption that expenditure levels reflect a rough adds S35 toreve- balance between need factors and factors that affect 200 nue capacity per the costs of providing services(see feature box). capita. A multiple-variable(OLS regression)statistical 30 70 110 150 190 An analy- analysis of expenditure levels per capita for the same Ma per Cob sis of growth 59 counties and cities was performed for the following t measures finds variables:dollar revenue capacity per capita,population For ss ab,and courba in t/irpris va I,p'n'r°"darrilin of nton Ims 100 poop' that change in size, gross density,share of population in povem; °r sou=U l jobs P�capita share of pop ulation under a g e 16 shim of poP ula- (a measure of tion over age 65,and the level of intergovernmental commercial and industrial expansion),change in the transfers from federal and state governments. amount of construction per capita,and the popula- These seven variables all turn out to be signifi- -tion growth rate are all significantly and positively cantly(at a 99 percent confidence level)and strongly related to changes in revenue capacity over the five- related to expenditure levels per capita(see Figure 3 year period(see Figure 2).Population growth is the for selected results).As a group, they explain 78 per- with facwr with each additional 10 percentage cent of the variation in expenditure levels among -- points in the population growth rate associated with the 59 jurisdictions. _ a 4.6 percent increase in per-capita revenue capac- As expected,revenue capacity shows up as the iry.A$1,000 per-capita increase in the volume of strongest factor.For each dollar of increase in reve- construction accounts for an increase of 4.86 per- nue capacity,local government expenditures per cent in per-capita revenue capacity.An increase in capita go up by$0.87.This result supports the the- jobs per capita by ten accounts for an increase of 4.3 ory that growth tends to increase expenditure levels percent in revenue capacity per capita. by increasing revenue capacity. The clear conclusion of this empirical data is Among the other factors strongly affecting ex- that population growth and economic growth gener- penditure levels,each additional S1 from the federal FIGURE 2: CHANGE IN REVENUE CAPACRY AND JOBS CHANGUPOK)LATION t 1 : 0. 25 12 35 ¢ r 20- 25- villa 4 t s o 5 10 15 20 2s 30 10 30 50 10 1,000 2,000 3,000 4,000 5,000 Change in Jobs per Capita Population 6MWth Rate iPercentl Change in Construction per Capita IS) 'fror sa atties aril eaeefas n Virgro wUh peprdetion derwho Owe thm 100 pea*par tepun ride,over Yu poriod of 1984 In IOU. Source ULL ZQ Urban Land - ,74anuary 1993