WSP10086

• File Number: 8040.100
• Description: Section D General Studies - Power
• State: CO
• Basin: Statewide
• Date: 3/1/1976
• Author: HUD
• Title: Rapid Growth from Energy Projects - Ideas for State and Local Action
• Water Supply Pro - Doc Type: Report/Study

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v. PAYING FOR THE IMPACTS

Money: that's where all the impacts show up. In
the long-run. most regions will derive financial bene-
fit from the presence of energy projects. The projects
are significant property taxpayers, usually generating
enough revenues to cover the costs of the impacts they
cause. But there are important mismatches in time
and space. While benefits are long-range and regional,
impacts are often immediate and local.
The impacts arise immediately, as soon as the con-
struction starts, if not before. The tax revenues from
the energy project arrive only after a facility has been
assessed and placed on the tax rolls. Spatial inequali-
ties are equally important. The population impacts
may be in the cities. while the tax revenues may go
to the county. Impacts and projects - costs and
revenues - may be in different counties or even
different states.

A. FISCAL IMPACTS

Several recent studies have analyzed potential
fiscal impacts of energy projects. The Wyoming
Select Committee on Industrial Development Impacts

analyzed time required to balance costs and revenues
and concluded that school districts would balance in
one year after completion of the project, counties in
three years, but that cities would take 25 years to
balance. 1 7
A similar study in North Dakota provided a series
of comparable estimates for one coal gasification
project.l B It concluded that State revenues would
exceed costs from the beginning, and total a $57
million benefit over 30 years. It concluded, however,
that local government (city, county, school) costs
would exceed revenues by $2 million during the con.
struction period. Local revenues would exceed costs
during operations, but by so little that it would take
18 years to balance out from the construction deficit.
At the local level, the net benefit over 33 years of
construction and operation would be $9 million -
less than one.sixth the amount of State benefits for
a comparable period.
A third study, the Tax Lead Time Study conducted
in Colorado, concluded that the three counties in the
oil shale region of that State would eventually show a
positive financial return. It would be seven years be.
fore revenues exceeded costs, (at which time the
cumulative deficit would be nearly $200 million) and
over 15 years before the operating surpluses offset

Figure 7
TOTAL lOCAL REVENUES
AND EXPENDITURES:
Tri.County Oil Shale Region

110

100

80

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40

10

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4 6
Year From Start of Construc:llon

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NEEDS

SOUPCf II. Ll,Jd f,me Stud,
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