Economists at CEDR use local government budget records and state government data sources to analyze a community’s revenues and expenses by land use. The resulting totals for revenues generated and expenses incurred can be presented as a ratio of expenditures-to-revenues for different land use types. To the extent that ratio is over 1.0 (e.g., expenditures exceed revenues) that land use does not pay for the benefit it receives from the local government.

This type of analysis shows the importance of balanced growth.  A community must have enough commercial/industrial development to cover the costs of their residential growth, especially once the cost of the schools is considered.  Having a well-balanced tax digest can help distribute the cost of government while keeping taxes lower for everyone.