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subarea? Do its current land -use policies make sense? If costs, as well as other factors, are to be considered, then a fiscal impact evaluation will help in the decision -making process. Demographic-economir.. changes. Many elected and appointed local government officials can tell interested parties how they think their community will look in ten or twenty years in terms of population, housing, and employ- ment. But very few can say what the fiscal impact will be —whether service levels will remain the same or deteriorate under pressure from a growing population. Similarly, when making changes to land -use regulations, few jurisdictions evaluate alternative development policies from a fiscal perspective. Evaluating development alternatives is a valuable use of fiscal impact analysis. Rezonings. A rezoning changes the density or type of use for a parcel; it may also be,' a signal of a change in develop- ment policy. Too often, significant rezoning cases are not sufficiently evaluated from a fiscal perspective. Fiscal analysis can be helpful in local government -developer negotiations. Annexation. An area that' may be annexed usually has some existing public services. One of the uses of fiscal impact analysis is to ascertain the cost of improving the services in the area proposed for annexation in order to make them comparable to the annexing jurisdiction's level of service. The analysis can calculate whether there will be an annual financial surplus or deficit from the proposed annexation during each year of the forecast period. Infrastructure planning. One of the by-products of a good fiscal analysis is the forecast of infrastructure needs to meet anticipated changes in a community. Any change in land use, population, or employment will have an impact on a number of capital -intensive services, including streets and utilities. A fiscal impact analysis helps identify the economic development strategy that makes the most fiscal sense. Leveraging public dollars. Local officials considering how to promote economic growth often face the question of how to invest limited funds so as to maximize the return. Fiscal evaluations can help them make their investments wisely. For example, different economic development strategies can be evaluated for their impacts on land use. Land use in turn affects services, costs, and revenues. A fiscal impact analysis helps identify the economic develop- ment strategy that makes the most fiscal sense. If a local government has $2.5 million for economic development programs and wants to decide whether to allocate it among several commercial districts within the community, a fiscal impact analysis can provide useful information on the potential financial effects. Finance Issues There are a number of ways in which fiscal impact evaluations can address budget and finance questions. As noted earlier, a fiscal impact analysis focuses on change, generally over a two- to ten-year period. Although the accuracy of the projections diminishes over tie, the analysis can help to raise budget and finance policy issues and suggest alternative approaches for addressing them. Some of the issues are discussed below. Capital improvement programming. Capital improve- ment planning cakes on an extra dimension with the use of fiscal analysis, which enables a local government to forecast the need for additional capital facilities given projected increases in population or employment. Individual departments seldom incorporate market forces or land -use plans into their CIP requests. A fiscal analysis that looks at subareas of the community can help address this issue, Fiscal analysis also clarifies the timing of infrastructure improvements. By incorporating future demographic and economic projections, the fiscal analysis will indicate the demand for capital facilities in the near as well as the longer term. One community discovered through fiscal impact analysis that the amount of park land included in its CIP was insufficient to provide the desired level of service even for existing development. This approach can also be used to calculate the cost and timing for replacing existing infrastructure. Infrastruc- ture replacement costs are one of the biggest fiscal problems facing many local governments. An inventory of existing capital facilities and their related future costs can be obtained by estimating the remaining useful life of each facility and its replacement or rehabilitation cost. Revenue forecasting. For purposes of this discussion, a revenue forecast defines the projected change in revenues (assuming existing rates) due to land -use or demographic changes in the community, The revenue forecast is one of the results of a fiscal evaluation. Fiscal planning. Fiscal planning is different from budget planning because fiscal planning focuses on change and uses a two- to ten-year time frame. Fiscal planning provides a long-term perspective on the costs and revenues associated with each department and activity of a local government, offering local officials the opportunity to reconsider plans and policies. Budget projections. Fiscal impact analysis results in both short- and long-range budget projections for each depart- ment in the local government. For example, an increase in the intensity of land use will generate a higher level of demand for police services. The analysis offers a budget projection for the police department, based on these changes and assuming specified service levels, over the forecast period. Local officials can look at this information for alternative levels of service, and project the effects of those alternatives on the budget.