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Fiscal and Economic Impact Assessment

Fiscal and economic impact assessments have been critical to the success of many projects, especially when performed in support
of financial incentives negotiations with states and communities.  They are also extremely useful tools in public information
programs intended to enhance community understanding of a project's impacts and build consensus to support it.  Support for
industrial projects, policy initiatives, or economic development programs is enhanced when citizens and government stakeholders
believe they can make informed decisions regarding programs or projects that have potential to impact their lives.  HERRON
CONSULTING professionals work closely with project owners, communities and state agencies to develop this information for
projects around the nation.  
 

Our Approach to Community Fiscal and Economic Impact Modeling

Fiscal and economic impact modeling is a powerful tool that quickly establishes the likely magnitude of a project’s effects on the
economy of a community, region and/or state.  The modeling tool we use estimates the direct, indirect and induced impacts that
an initial economic stimulus, such as an office development, factory, logistics park, etc. will have on a regional economy in terms
of employment; wages; output for industries that are impacted by the proposed development; consumption (spending); and state,
county and local tax revenues over a multi-year period.

This state-of-the-art model contains a set of input-output tables, an accounting system for a regional economy.  It replicates the
interactions of local industries with each other, with industries outside the region, and with final demand sectors over a period of
time.  The model is the core of an advanced, highly flexible tool for economic and demographic forecasting and for analyzing the
impact of policy changes and related events.  It is among the most advanced economic modeling tools available, incorporating
several distinct features, including:
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The best available U.S. forecasts of any commercially available regional modeling tool.    
Greater industry detail than any other regional modeling tool.  It can recognize and forecast behavior of up to 1,250
different industry categories (5 digit NAICS level of detail).    
Multiregional-modeling that calculates forecasts for regions defined by individual or multiple communities, zip codes,   
counties and states in the U.S.
Recognizes critical transportation infrastructure.  The model incorporates a special transportation infrastructure
database developed by Oak Ridge National Labs for the US Bureau of Economic Analysis.  Unlike any other model, it
calculates interregional trade based upon data for five different transportation modes (highway, air, rail, water and multi-
modal).   Because this database contains comprehensive data on the ease of movement between counties via the different
modes, this allows us to estimate industry-specific responses to transportation infrastructure for every county in the United
States. These data are critical to accurately describing interregional trade in goods and services, which in turn is key to
conducting accurate multi-regional economic impact analysis.  
Multi-year accounting, enabling the model to capture a local/regional/state economy's response for up to 20 years.   
Numerous current federal data sources are used in the model, including:   
    U.S. Census County Business Patterns
    U.S. Census Journey-to-Work Data
    Bureau of Labor Statistics (BLS) Input-Output Tables
    BLS Employment and Wage Projections
    Bureau of Economic Analysis (BEA) National Income and Product Accounts
    Bureau of Economic Analysis Regional Economic Information System Accounts
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HERRON CONSULTING: Site Selection and Fiscal Impact Assessment
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