Tools to Affect Land Use Decisions The Impact of Municipal .ppt

municipalfinanceandgovernance toolstoaffectlandusedecisions enidslackinstituteonmunicipalfinanceandgovernanceuniversityoftorontopresentationtotheleadingedge2006conferenceniagaraescarpmentcommissionburlington ontariooctober5 2006 2 outlineofpresentation fiscalchallengesfacinglargecitieshowdomunicipalfinancingtoolsaffecturbangrowthpatterns developmentcharges propertytaxes userfees taxincrementfinancing whatistheroleplayedbylocalgovernance 3 municipalexpenditures 2004 transportation 20 water sewers garbage 18 fireandpoliceprotection 17 health socialservices socialhousing 16 recreationandculture 12 generalgovernment 9 debtcharges 4 planninganddevelopment 2 other 2 4 municipalrevenues 2004 propertytaxes 53 userfees 23 provincialtransfers 15 federaltransfers 1 investmentincome 5 otherrevenues 3 5 fiscalchallengesfacingcities offloadingofservicesinternationalcompetitivenessamalgamationurbansprawlnodiversificationofrevenuesources 6 fiscalchallenges successonfiscalmeasures municipalitieshavedonewellonfiscalmeasures sizeoftheoperatingdeficitamountofborrowingforcapitalrateofpropertytaxincreasesrelianceonprovincialgrantsextentoftaxarrears 7 fiscalchallenges infrastructureandservices fiscalhealthmayhavebeenachievedattheexpenseoftheoverallhealthofcanadianmunicipalities thestateofmunicipalinfrastructure water sewers roads transit etc thequalityofservicedelivery 8 financeandgovernanceandurbansprawl weknowthatmanyoftheenvironmentalissueswefacetoday airandwaterpollution lossofagriculturalland openspace environmentally sensitiveareas greenhousegasemissions stem inlargepart fromthewaywehaveplannedandbuiltourcitiesinthepastweknow forexample thatcompacturbandevelopmentismoreenvironmentallysustainablethanurbansprawl 9 financeandgovernanceandurbansprawl whatislesswellunderstoodishowthedecisionswemakearoundhowtopayforservicesandinfrastructureandhowwegovernourcitiesaffectwhetherwewillhavesprawlorcompactdevelopmentinmanycities financingtoolssubsidizesprawlbecausetheychargeanartificiallylowcostforinfrastructureandservicesinsprawldevelopmentsfewregionalgovernancestructuresexistthatallowustocoordinatelanduseplanningandinfrastructureinvestmentonaregion widebasis 10 financingtoolsandurbangrowthpatterns wherepeoplechoosetolive wherebusinesseschoosetolocate andwheremunicipalitieschoosetoinvestininfrastructureareallinfluencedbyfiscalincentivesifitcostsmoretolocateinoutlying low densitydevelopments needtochargemoretopayforservicesandinfrastructureinthosedevelopmentsfinancingtoolsneedtocreatetherightincentives 11 developmentcharges alsoknownaslotlevies impactfeespayforgrowth relatedcapitalcostscanbeleviedonauniformbasisoradevelopmentbydevelopmentbasisarea basedchargesreflectcostsofdevelopmentindifferentlocations noincentiveforsprawlifuniform theycanpromotesprawl 12 propertytaxes basedonmarketvalueofpropertiespropertytaxdifferentialsthatdonotreflectservicedifferentialswillmeantherearesubsidies positiveandnegative thatwillworsendevelopmentpatternsoftenapartmentspayhighertaxratesthansingle familyhomesfarmpropertiesarefavoured valueincurrentuse butdoesnotnecessarilystopdevelopmentoffarmlandontheurbanfringe 13 userfees needtobebasedonmarginalcost costofadditionaluser ratherthanaveragecostaveragecostmeansthatthoseinoutlyingareaspaylessthanthemarginalcostandreceiveasubsidy 14 userfees roadtolls intheabsenceoftolls decisiontodrivedependsonprivatecosts gas depreciationetc withtolls alsoconsidersocialcosts congestion pollution discourageuseofautomobiles reducedemandforcommuting increasedemandformorecompactdevelopmentfueltaxesnotasgoodbecausetheydon tvarywithtimeofdayorlocation 15 taxincrementfinancing waytoraisemoneytorevitalizeblightedareas downtowns brownfieldremediationusesincrementinpropertytaxtopayforredevelopmentreduceneedtodevelopgreenfieldsites 16 localgovernance localgovernancedetermineshowdecisionsaremadewithrespecttolanduseandinfrastructureinvestment decisionsthataffecttypeofdevelopmentgrowthmanagementneedstobetackledonaregion widebasis needregionalgovernancestructure 17 localgovernance needtocoordinateregionalplanning infrastructureplanningandinvestment economicdevelopmentandenvironmentalprotectiononaregionalbasismodelsofregionalgovernance one tierortwo tiergovernment inter municipalcooperation specialpurposedistricts provincialrole 18 localgovernance differentmodelshaveworkedindifferentplacesatdifferenttimestheprecisemodelislessimportantthanthatthereissomeformofeffectiveregionalgovernance 19 concludingcomments citiescanimprovetheiruseofexistingrevenuetoolsrevenuetoolsneedtoreflectbenefitsreceivedfromlocalservicesrevenuetoolsneedtoworkwithplanningtoolsneedtocoordinatelanduseplanningandinfrastructureinvestmentonaregion widebasis 20 concludingcomments userfeesba