A fiscal impact analysis (FIA) is an important planning tool in this scenario analysis because it affords communities and planners the knowledge of the fiscal costs and benefits that come from development in high risk flood areas. In terms of benefits, an FIA quantifies the tax revenue a jurisdiction would receive by allowing (and from previously allowing) development in their high risk flood areas. In terms of costs, an FIA quantifies the costs of providing public services to current – and potential future – development in high risk flood areas. It also quantifies potential direct damage to structures that might occur within high risk flood areas, both under current conditions and under potential build- outs. Having the complete picture of costs and benefits allows planners and communities to understand whether or not development in high risk areas is fiscally responsible for their jurisdiction.

Background and Considerations

In preparing to do a fiscal impact analysis for your community, it is necessary to gather relevant financial documents for your community such as annual financial reports and property value assessments. There are also a number of assumptions about zoning, property values, and so forth that will need to be made to make this analysis possible. These assumptions used in our study are noted throughout the methodology.


This section introduces the methods established to conduct a fiscal analysis of flood impacts on a community. There are three parts to the methodology:

  1. The development of a map using ArcGIS that will enable future analysis of current buildings and future build-outs;
  2. The identification of build-outs located in flood zones and the potential fiscal impact of potential floods on buildouts; and
  3. An analysis of current development and the potential fiscal impacts of different climate future scenarios.

This section provides a step-by-step guide for how to do an FIA using the climate futures and management options your community created. You may find that the methods could be simplified by using a Python script or GIS Model Builder; however, to ensure transparency of these methods, this section provides the detailed steps used to conduct the FIA. The tools used in this analysis are ArcGIS and Microsoft Excel. Additionally, it is important to note that methods used in this FIA are Michigan-specific, particularly in regards to property assessment. However, they can be adapted to any community.

For the technical methodology, download the Fiscal Impact Analysis Technical Guide..