A Cost of Community Services Study in Two Central Wisconsin Towns

Abstract

In the state of Wisconsin, little information is available on the impacts of community growth, particularly fiscal impacts. The tendency of many local governments is to welcome development assuming it always positively affects the local tax base. Several Cost of Community Services studies (COCS) have been done in the eastern part of the United States that challenge this common perception, see Table 1 for specifics. A COCS study produces sets of ratios comparing tax revenues to tax expenditures segregated by land use. The study was developed by the American Farmland Trust (AFT). The revenue base is set at one dollar. Therefore, for every one dollar received by local governments in revenues from various land uses ( e.g. residential, commercial etc.), these ratios illustrate what the associated servicing costs (expenditures) are with these land uses. Having information from only one COCS study in the state of Wisconsin, conducted in the town of Dunn located in Dane County (Town of Dunn, 1994), Wisconsin policy makers with limited information pertaining to their state tend to neglect the relevance of COCS studies done elsewhere. Therefore, the Wisconsin Land Use Research Program (WLURP) investigated nine municipalities distributed throughout the state to generate this fiscal information. This report details the findings of the two COCS study sites in central Wisconsin conducted in the towns of Harrison (Calumet County) and Stockton (Portage County). Findings from these central Wisconsin COCS studies mirrored findings from the AFT and other researchers, with the exception of commercial properties, AFT results are summarized in Table 1. The findings (ratios) indicated that residential and agricultural residential properties were more expensive to service than they produced in revenues, while agricultural land, swamp, forest, and manufacturing properties produced more in revenues and demanded less in service costs. Commercial properties were a mixed bag. In the town of Stockton when public education costs and revenues were excluded, it was more expensive to service commercial properties than revenues produced from them, due to lower valued properties generating less in revenues, while in Harrison commercial properties were neutrally influencing the tax base. When the public education component was added into the ratios commercial properties were a fiscal positive to both the towns of Harrison and Stockton. This COCS research, along with the other seven COCS studies conducted by WLURP researchers, differs from all previous COCS research in that it addressed and implemented recommendations from COCS methodology critics. These recommendations included: separating the agricultural residential category from the residential category to investigate the fiscal combination of agricultural residents and agricultural land, utilizing a variety of allocation methods, individualizing land use categories, and adding into the COCS ratios for all land uses the impacts of public education as well as analyzing them separately from the town budget. The most notable implementation was the investigation of the true fiscal impact of agriculture. In all other COCS studies the residential category includes both agricultural residents and town residents. This means that the agricultural category is misleading because it is just the land without its associated buildings and residents. This research found when the agricultural land and agricultural residential categories were combined that collectively agriculture has a positive influence on the local tax base, generating more in revenues than it demands from local governments in services.