Recent studies indicate making investments in smart growth and sustainability projects offer significant benefits to municipal financial performance in the short and long term.
According to Smart Growth America’s survey of municipal leaders across the country, there are many common trends in budget decision making that are enhancing development efforts while reducing overall expenditure. Smart growth strategies include cutting back on infrastructure costs; consolidating fire, police or ambulance services; and making better use of tax revenue.
The researchers argued patterns in development greatly impacted public finances, particularly deciding where or when to build new infrastructure. The economic downturn left many municipalities strapped for cash, and the majority are still recovering financially. Improvements in economic activity and consumer spending, however, are increasing demands and expectations for local developments, which is spurring growth projects. About one-third of the average city’s budget is directly affected by growth strategies, underscoring the value of smart development for immediate and long-term savings.
What They Found
The national study found smart growth developments cost a city an average of 38 percent less for infrastructure projects such as new roads, sewers or water lines. When smart strategies are implemented, less infrastructure is required to complete projects. This will reduce immediate costs as well as future expenditure on maintenance and replacement.
Smart growth developments were also found to save cities an average of 10 percent on delivery of services to residents including police, fire and ambulance. Redesigning the distribution of emergency services throughout the community cuts down on operational costs by reducing the numbers of miles traveled, vehicles used or facilities required to meet local demands.
In addition, smart growth developments can result in 10 times more tax revenue per acre than traditional projects. Making greater use of land development can boost property and sales tax revenue significantly, freeing up capital for future projects while reducing pressure to increase other taxes on residents.
Some municipalities are opting to adjust their current budget strategies to fund research on public services performance and efficiency. By gaining deeper insight into the behaviors, patterns and outcomes of public strategies, local decision makers are able to make changes and implement smart growth developments.
The Rio Rancho local government in New Mexico recently approved a new budget that includes $52.5 million in general fund spending. The budget also set aside money for a public safety staffing study to determine if the city’s current setup is sufficiently meeting local demands or if cuts can be made without sacrificing the quality of services.
Similarly, Clarksville, Tennessee, allocated $25,000 of the city’s budget to study park land opportunities to help decide where recreational facilities could be added in the community. As part of the city’s smart growth plan, the study aimed to identify opportunity zones in Clarksville where location and land value could be optimized for a new park.