Frequently Asked Questions

What is the Fiscal Impacts Model?

What is an economic impact?

How is the economic impact calculated?

What are multiplier effects?

What is a fiscal impact?

Why is the Fiscal Impacts Model so unique?

What are the benefits of the Fiscal Impacts Model?

What are some real world uses for the Fiscal Impacts Model?

Who would use the Fiscal Impacts Model?

What do the ouput tables look like?

What if I need a stand alone report to provide to council?

When should the model be used?

What if I know my company's SIC code, but do not know the NAICS code?

How do I set up an order?

How much does the analysis cost?

What is the Fiscal Impacts Model?     Top

The Fiscal Impacts Model is an easy-to-use and reasonably priced custom application that provides its users an accurate means to calculate the economic and fiscal impacts of any business currently located or planning to locate or expand operations in a particular geographic region.

What is an economic impact?     Top

Economic impact analysis examines the implications of an activity in terms of three basic measures: output, earnings and job creation. The model computes the impact of either an existing business (retention) or a new business (relocation). The model provides the impact during a construction period and during operations (if both are entered). (1) Economic impact of construction - The economic impact of construction determines the output, jobs, payroll and population supported by the construction phase of any new building planned by the company. Construction phase impacts are generally short-term effects (six months to two years) related to onsite and offsite construction employment and other industries that support the construction. The model allows the user to enter up to five years of construction impacts on an annual basis. (2) Economic impact during operations - The economic impact during operations determines the output, jobs, payroll and population supported by the operations of the company. The operational phase impacts are generally considered the long-term consequences of a company. The model allows the user to input up to five years of operating data and generates up to a five-year operational phase impact.

How is the economic impact calculated?     Top

Economic impact analysis starts with the value of construction (if any), type of industry the business is generally classified as, and employment (number of direct jobs) over a user specified time period. The user has a choice of 85 NAICS industries in the standard model, but can select from a list of specific industries when creating a custom model.   With this information, the multiplier effects on the geographic area are determined. When the user changes the industry, the corresponding average annual salary and set of multipliers for that industry are automatically selected. If the user inputs total wages for a given company, then the direct wages will be used instead of those that are generated automatically from the set of multipliers and these direct wages will be provided in the output tables.

What are multiplier effects?     Top

The multiplier effects are separated into indirect and induced impacts. Indirect impacts are new jobs, output and income that will be generated by industries that supply goods and services directly to the company. Induced impacts consist of the jobs, output and personal income in industries that serve the direct and indirect employees and their families. The induced impact includes not only the end-use consumer products but also any locally purchased intermediate products that were used in producing the consumer goods and services.   The results of the economic impact analysis include a breakdown of direct, indirect and induced impacts in terms of employment, output, and personal income. Total population supported by the company's operations is also computed based on historical relationships between jobs and population. This level of detail is shown annually for the construction impact, if applicable and the on-going operations impact over a specified time period.   In addition, the operations impact, in terms of output and employment, is broken down by industry sector. This additional breakdown by industry sector allows the user to identify the other sectors of the geographic area's economy that are impacted by a company's operation.

What is a fiscal impact?     Top

Fiscal impact analysis determines the public revenues that are generated by a particular economic activity. The primary revenue sources (i.e. taxes and fees) of local, county, or state governments are determined in order to examine how an activity may affect the various jurisdictions. Fiscal impacts can be calculated for any jurisdiction requested, including the direct impact on school districts.   Fiscal effects occur as a result of spending by workers directly or indirectly supported by the company. For instance, counties and cities benefit from the spending of employees on housing and retail goods and services. Examples of these types of fiscal impacts that will be generated include income taxes paid on wages and sales taxes paid on retail goods.   The Fiscal Impact analysis is set up in a similar manner as the Economic Impact analysis. This portion of the model computes the fiscal impact of either an existing business (retention) or a new business (relocation). The model provides the fiscal impact during a construction period and during operations (if both are entered).   (1) Fiscal impact of construction - The fiscal impact of construction includes the direct, indirect, induced and total impact of a new or existing company during the construction phase (typically 6 months to two years) in terms of sales taxes, income taxes, unemployment insurance, property tax, motor vehicle tax, and state shared revenues.   (2) Fiscal impact during operations - The fiscal impact during operations includes the direct, indirect, induced and total impacts of a new or existing company in terms of sales taxes, income taxes, unemployment insurance, property tax, motor vehicle tax, and state shared revenues supported by the operations of the company. The operational phase impacts are generally considered the long term consequences of a company.   All revenue projections are in current dollars and, thus, not inflated. The revenues are based on tax rates entered by the user when the program was installed.   Following are the applicable revenue sources that could be calculated. Construction Tax Sales Tax Bed Tax Lease Tax State Income Tax Unemployment Insurance Tax Motor Vehicles Tax Property Taxes State Shared Revenues   The above tax categories represent the largest sources of revenues that will be generated to city, county and state governments.

Why is the Fiscal Impacts Model so unique?     Top

Economic models have historically been described as complicated mathematical programs with unconventional terminology. Typically, use of these models by an organization is restricted to only a few employees with advanced technical computer training.   The Fiscal Impacts Model is different. The custom model has specifically been designed for use by any member of an organization, from top management to research staff. Economic information is accurately calculated and is presented in a format that simply makes sense. In addition, if a single run of a model or the impact of a single company is required, Elliott D. Pollack & Company provides full services for fiscal impact reports and presentations.   It is our firm belief that the Fiscal Impacts Model will prove to be one of the most often used tools in your economic development toolbox.

What are the benefits of the Fiscal Impacts Model?     Top

Answers Questions Like... How many new jobs will a business create in my local economy? How much tax revenue will a company generate for local governments? What is the impact of a new or existing business by community? What are the benefits to surrounding communities?   Primary Benefits Evaluate what new and existing jobs mean to your community Determine the impact by industry Calculate the impact by community "WHAT IF" Analysis for Economic Development Policy Quantify the impact of your business retention and expansion efforts Help justify your annual budget or justify a specific project Help make case for budgetary expenditures Help the public understand the benefits of a proposed development Help a developer obtain entitlements or incentives Examples: Show how parks and recreational activities do produce economic and fiscal benefits Show the benefits of a public educational institution and use the results for fund raising and advocating to the legislature for more funds. Assist in determining the level of local government incentives

What are some real world uses for the Fiscal Impacts Model?     Top

The Model provides community leaders with the necessary information to determine if benefits related to potential relocating or expanding business operations are worth the public and private investment that is being sought. In other words, it gives you a basis to determine if you are making a "good deal." The Model can provide information that is useful in demonstrating the regional impacts of an existing or new business, beyond the border of the community in which the business exists. This allows for a better understanding of how economic development efforts in one community impact another, and encourages complementary economic development efforts. Similarly, the Model can also show the impact of an existing or new business on other industries. This information can be used as a sales pitch to other industries who would otherwise think they are not affected by the business in question. Finally, the revenue benefits to local, county, and state governments can be quantified. This information can be used for public relations purposes, demonstrates the value of your economic development efforts, and may be used to influence government policy decisions.

Who would use the Fiscal Impacts Model?     Top

The Fiscal Impacts Model is typically useful to those involved in economic development.  Such users include: Economic development agencies Developers Business Owners City/town governments Chambers of Commerce County governments State governments Tourism agencies School districts

What do the output tables look like?     Top

Once purchased, the tables will be e-mailed to you in Microsoft Excel format. Click here to try a demo...

What if I need a stand alone report to provide to council?     Top

Elliott D. Pollack & Company offers consulting services beyond the online version of the models. Click here for information on how to contact us.

When should the model be used?     Top

The fiscal impacts model should be used any time the user wants to know how many jobs a company creates throughout the economy and how the company affects government revenues. The information can be used for public relations purposes, to demonstrate the value of economic development, to influence government policy decision or many other reasons.

What if I know my company's SIC code, but do not know the NAICS code?     Top

For a chart on the conversion from SIC to NAICS visit the census bureau at the following site: http://www.census.gov/epcd/www/naicstab.htm

How do I set up an order?     Top

You can either call us at our toll free number, 1-877-423-ECON, or you can click here to send us an email.

How much does the analysis cost?     Top

The cost of each analysis varies by product purchased. Products range from a set of tables that provides the economic and fiscal impact of a business, to a full-blown analysis and report of a master planned development. Please feel free to call us if you have any questions.