Laserfiche WebLink
City of Mounds View Staff Report <br /> Economic/Community Development Issues <br /> • <br /> March 14, 1997 <br /> Page 2 <br /> • <br /> I. Introduction <br /> How a community chooses to deal with land use affects the economic base. The level of tax <br /> capacity generated by the land use will result in the possible level of revenue that can be used to <br /> provide services for the community. <br /> Types of choices: <br /> unrestricted growth <br /> planned growth <br /> no-growth, stagnation <br /> H. How Local Economies Work <br /> Direct relationship - Increase in the tax base and creation of jobs. Commercial taxes are <br /> calculated at a higher rate than residential properties and a commercial investment typically <br /> demands less public services. Therefore, there is a larger net amount of dollars coming back to <br /> the public sector from a commercial development than there is from single family homes. <br /> Example: An acre of land with a single family home, a non-homesteaded home and a <br /> commercial business that have the same estimated market value of$150,000. Total taxes <br /> are more than double for commercial and rental property than they are for single family <br /> residential property. <br /> Taxes Generated <br /> Single Family Home=$3,100 <br /> Non-Homestead (rental) =$7,000 <br /> Business= $7,200 <br /> Indirect Relationship -New commercial growth creates a host of short and long term economic <br /> impacts to the community and region as a whole. These impacts go beyond the direct tax benefits <br /> and job creation by a particular development and is referred to as the multiplier or ripple effect. <br /> When a business expands or a new business comes into the community, it creates jobs throughout <br /> the area's economy. Jobs are created directly by the expansion or relocation but additional jobs <br /> are also created by the expanding or new business buying supplies and services from other <br /> businesses in the area. In addition, the new payroll that flows through the area from the jobs <br /> created supports other businesses in the area when these payroll dollars are spent on local goods <br /> and services. On the flip side, the decline of a business reduces its spending on local goods and <br /> services and also reduces the purchasing power of the employees in that business. <br /> Example: The potential for new commercial development in Mounds View will typically <br /> • come from the Retail, Business Services, Restaurants, Manufacturing and Possibly <br />