Durango-based Rural Planning Institute, or RPI, has been working with rural counties for 13 years, examining the resource strain new subdivisions or strip malls put on county government versus the potential economic boost and tax revenue such new development could bring.
County governments walk a fine line between income and expenses. Even in an economy starving for business growth, rural counties must weigh new development proposals against the strains such requests will place on county services. For example, crews have to put more work into maintaining roads to new homes or buildings and law enforcement must widen patrol areas.
This kind of analysis accounts for 30 to 40 percent of the company’s work, said Gabe Preston, a managing partner with RPI.
The work prompts discussions about the integral relationship between planning, tax revenue and the economic health of rural counties.
RPI analysts help counties calculate appropriate impact fees to charge developers as well as model future growth patterns to judge the financial sustainability of their revenue streams.
Counties such as Grand County, Utah, which includes Moab, and Natrona County, Wyo., which includes Casper, are using financial-impact studies as they create long-term land-use plans. Officials in Moab, for example, realized that limiting development closer to town limits makes the most sense economically when it comes to minimizing the strain put on county services.
In today’s economy, counties are facing new challenges as constituents put up fierce opposition to fees and taxes, and real estate markets are still recovering from the housing bust. In this environment, RPI’s analysis has helped rural counties realize the necessity for economic diversification to generate enough tax revenue to provide services to outlying areas, Preston said.
The focus now is on evaluating and capitalizing on local assets such as infrastructure and natural amenities.
“It’s how we build up the rest of the economy so that as natural booms and busts occur, the county can continue to provide the same levels of services,” he said.
Economic diversification has always been on the radar in La Plata County, County Commissioner Bobby Lieb said. Bodo Industrial Park, which was built in the 1970s, is a good example of an effort to build the county’s manufacturing sector, he said.
La Plata County has a much broader economic base than many similar counties, thanks to natural gas and oil, Fort Lewis College, government offices and tourism, Lieb said. The county also supports economic-development organizations such as Region 9 Economic Development District, La Plata Economic Development Alliance and the Southwest Colorado Small Business Development Center.
Some efforts at planning and analyzing the best areas for growth and development were part of the county’s comprehensive plan that commissioners voted to scrap last year.
Calculating the costs and benefits of new development, especially residential, needs to be a wholistic process, Lieb said.
“If you look at (housing) by itself, it doesn’t generate the revenue that pays for itself,” Lieb said. The people who move into in those houses, though, get jobs in the community, pay taxes and spend money. The county’s job is to insert those considerations into the equation.
If counties aren’t careful, there is a danger that land-use decisions can become biased toward upper-income houses because they generate more property-tax revenue, said Roger Zalneraitis, executive director of the La Plata Economic Development Alliance. The challenge is to create both a sustainable revenue stream and housing options that everyone can afford, Zalneraitis said.
Smart economic development will play a huge role in counties’ success in the future, Preston said.
“It’s no longer just a given that you are going to make it economically because you are in a nice place in Colorado,” he said. “Communities are going to make it because they make good decisions.”