Professionals involved in public policy, community planning or resource conservation are familiar with methods of calculating community costs for different types of land use within a municipality.

One important measure, when considering how a town should zone areas for different uses – residential, commercial or industrial – and what expenditures for services those uses require, is a “cost of community service,” or COCS study. The University of New Hampshire defines a COCS study as “a type of fiscal impact analysis that determines the fiscal impact of current land uses on a municipality’s budget.” This type of study looks at aggregate land use in a community and takes a snapshot picture of how the different types of use generate revenue for a town, and what the costs are to provide services for each type of land use.

For instance, commercial or industrial land use generally gives back to the community at a much higher rate per dollar of tax revenue than residential land use. According to the American Farmland Trust Information Center from studies conducted in over 120 counties and towns across the country, for every dollar in revenue (R) a community collects from commercial or industrial land use, the median expenditure (E) communities make providing services to that type of use is $0.29. For open or working land (farms and working forests) the median R/E ratio is $0.37, while for residential land the median is $1.19. For every dollar collected as tax revenue from residential land use, half of the communities studied paid out over $1.19 in services. Services typically include police and fire, as well as schools.

What that means is that commercial and farm land pay more in revenue than they use in services, while residential land, in nearly all cases, requires more in services than it pays for those services. Bedroom communities with little commercial development will often tax residents at a higher rate to provide services than those communities that have strong commercial districts or an industrial base. Having the right mix is key to keeping tax revenues sufficiently strong to provide the services a community needs and taxes low. When the balance is off, either taxes must be high enough to provide for critical services, or else critical services must be cut or eliminated altogether.

As Windham commences discussion about a public sewer, town leaders must carefully consider which areas the sewer will service. Development typically follows this type of public utility. The sewer plan must not encourage imbalanced residential development that creates more demand for services. Without a compensatory rise in commercial tax revenues, residential growth actually becomes a tax drain on the community, in turn either exerting greater strain on existing services or requiring tax hikes.

Public health is becoming a main impetus for installing a public sewer. Addressing that issue in the heavily developed commercial district of North Windham and in the nearby built-out residential neighborhoods warrants appropriate action; installing a public sewer is the right thing to do. Initial drawings of the Phase I sewer plan, however, for my neighborhood on Hall Point on Little Sebago Lake, suggest potentially threatening development pressures for the lake and surrounding watershed. An increase in paved roads, increased traffic, and runoff from residential growth in a watershed are cited as potentially detrimental to water bodies in studies documented in the Journal of the American Planning Association.

Economic and residential development was built into the Comprehensive Plan, but a sewer plan that encourages growth in areas not identified as growth areas in the plan must be carefully considered. Making Windham a more populous bedroom community is not a wise development strategy for town officials. Developers and contractors may well prosper, but increased costs for services and higher taxes to pay for them, are the most likely result from excessive residential growth. Encouraging development with a sewer line in areas scheduled for commercial or industrial growth befits the issue at hand – groundwater contamination – while addressing economic development. Unwisely encouraging imbalanced residential growth will likely leave us stuck in traffic with plenty of time to fume over the tax increases necessary just to keep community services from shrinking even further.

Steve Demetriou lives in Windham.


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