CALIFORNIA STATE UNIVERSITY, SACRAMENTO
Department of Economics
Prof. A. R. Gutowsky
Economics 180
EXCEL EXERCISE # 1 Market Area Analysis
EXCEL EXERCISE # 2 Economic Base and the Employment Multiplier
What is the income/employment multiplier for the Sacramento PSMA? What are the export oriented sectors of the Sacramento PSMA? How did you determine the answers to the two above questions?
Be sure to read pages 140-147 for background and pages 153-157.
EXERCISE # 3 Input-Output Analysis
Read pages 157-161 for background and answer questions (13) through (15) found on pages 174-175. Also read E.S. Mills, "The Misuse of Regional Economic Models," CATO JOURNAL, Spring/Summer 1993 pp. 29-38.
You are to access the following website:
www.bea.doc.gov/bea/ARTICLES/REGIONAL/PERSINC/METH/rims2.pdf
This
wesite will provide you with the Bureau of Economic Analysis publication,
REGIONAL
MULTIPLIERS
EXERCISE # 4 Fiscal Impact Analysis
A fiscal impact analysis handout can be obtained on the class website. Use an excel spreadsheet to answer the following three questions.
Per Capita Multiplier Method Problem
A 100 unit single-family development is proposed in a California community of 10,000 residents and 2,500 public school pupils. The development will be composed of 20 two-bedroom single family homes, 40 three-bedroom homes and 40 four-bedroom homes. The community spends the following amounts for public services:
MUNICIPAL
SCHOOL DISTRICT
Operating Costs
Operating Costs $ 4,500,000
General Govt $ 150,000
Debt Service
$ 500,000
Public Safety $
500,000 Total
$ 5,000,000
Public Works $ 500,000
Health & Welfare $ 120,000
Recreation & $
80,000
Culture
Total
$ 1,500,000
Estimated per household size and child per household for the development are as follows:
2 bedroom 2.536 .288
3 bedroom 3,776 1.111
4 bedroom 4, 655 1,911
What impact will the 100 unit development have on municipal and school district
expenditures?
Assume for calculation purposes that (1) all children from the development will attend
public schools and
that $ 300,000 of the $ 1,500,000 municipal expenditures are occasioned by local
nonresidential uses.
Service Standard Method Problem
A 200-unit townhouse development is proposed in a California community of 30,000
residents and
10,000 public school pupils. Forty percent of the townhouses are two bedroom units and
sixty percent
are three bedroom units. The community has the following annual operating costs for
different public
service employees:
PUBLIC SERVICE FUNCTIONS OPERATING COST/EMPLOYEE
Municipal
General Government
Financial Administration
$ 16,000
General Control
13,500
Public Safety
Police
20,000
Fire
18,000
Public Works
Highways
18,000
Sewerage
15,000
Sanitation
14,000
Water Supply
14,000
Recreation & Culture
Parks & Recreation
12,000
Libraries
13,500
School District
Primary & Secondary
20,000
It is estimated that the townhouses will have a population of 666 and 184 school age
children.
Manpower rations for regional population size groups (per 1000) are as follows:
Financial Administration .00052
General Control
.00053
Police
.00201
Fire
.00164
Highway
.00100
Sewerage
.00053
Sanitation
.00144
Water Supply
.00099
Parks & Recreation .0082
Schools
.07800
Financial Administration .00052
The capital-to-output ratios for regional population size groups (per 1000) are as follows:
Financial Administration .008
General Control
.008
Police
.051
Fire
.022
Highways
.284
Sewerage
.345
Sanitation
.064
Water Supply
.386
Parks & Recreation .124
Libraries
.000
Schools
.073
What impact will the 200 unit development have on municipal and school district
expenditures? Assume
that 90 percent of the development’s school age children will attend public school.
Revenue Projection Problem
A 100 unit single-family residential development is proposed for a California
community. Each residential unit
will have an assessed valuation of $ 140,000. The property tax rate on assessed valuation
is .01.
Each residential unit is expected to generate annually $ 6,500 in taxable retail sales.
The sales tax rate on
taxable retail sales is .0775; .05 is returned to the community.
The developer will pay the community $ 6,500 in fees and permits for each unit built.
How much tax revenue will this development generate for the California community?
Updated 8/25/00