Density, population growth and local government finance
Goodman, Christopher Brooks
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Contemporary literature in the fields of public finance, economics, planning and regional science have acknowledged the importance of the built environment (sprawl) and growth issues to the study of local public finance. However, this literature largely focuses on only a small segment local public finance outcomes, primarily per capita expenditures. The contribution of this study is to extend these analyses to include a larger list of outcomes using the State of Georgia as a case study. In addition to per capita expenditures, the impact of the built environment and growth on local fiscal conditions and revenue diversification is examined. These three analyses are undertaken, econometrically, using a panel of county governments in Georgia from 2000 to 2008. To summarize, 1) sprawling type development in Georgia increases the per capita expenditures on average and these results are dominated by per capita capital expenditures, 2) residential growth increases per capita expenditures in a quantitatively small and non-linear fashion, 3) sprawling type developments in Georgia have better fiscal conditions on average, 4) moderate levels of residential growth (0% - 6% annually) are associated with a worsening of local fiscal conditions on average; however, the results are non-linear and u-shaped, 5) sprawling type development patterns are associated with lower levels of revenue diversification, and 6) increased residential growth is associated with lower levels of revenue diversification on average. The results of these analyses suggest that the influence of the built environment and growth is not uniform across local public finance outcomes. Instead, sprawl and growth are both positive and negative factors for communities. As such, there is no "one size fits all"' policy recommendation as to how to deal with sprawl and growth. Communities in Georgia (and to the extent these results are generalizable, across the nation) should be careful to weigh the positive and negative attributes of different styles of development before choosing a course of action.