American Institute of Certified Planners (AICP) Practice Exam

What does a fiscal impact analysis primarily assess?

1. Cost-revenue implications on public services

2. Employment opportunities generated by a project

3. The ability of a project to generate sufficient revenues

4. Environmental impacts of a development project

The correct answer is: The ability of a project to generate sufficient revenues

A fiscal impact analysis primarily assesses the cost-revenue implications on public services that arise from a proposed development or project. This involves analyzing how the project will affect the financial resources of a municipality or region, specifically by evaluating whether the revenues generated from the development (such as taxes and fees) will cover the costs associated with providing necessary public services (like infrastructure, maintenance, and administrative costs). This analysis is crucial for planners and policymakers as they seek to understand the economic viability of a project not just for the developer but also for the community. While other aspects, such as employment opportunities or environmental impacts, are important considerations in a comprehensive project evaluation, the essence of a fiscal impact analysis revolves around the financial implications derived from the project's costs and revenues. Thus, it highlights the sustainability of the project from a fiscal perspective, encompassing whether it can support itself financially and not be a burden on public resources.