1. The lack of evidence on the fiscal impact of sprawl on taxpayers and regional scope
The potential savings on municipal and school district expenditures from a more compact development pattern over a sprawling pattern are actually non-existent, because municipalities and school districts tend to spend more when their budgets allow.  In fact, the potential savings are the difference between the net deficits of a municipality or school district of managed growth and unmanaged growth scenario. It is unclear who benefit from this reduced deficit.  Overall, studies concerning municipalities and school districts assume that fiscal impact of sprawl on municipalities will be borne by all taxpayers in a region.  Similarly, those concerning individual households speculate that all taxpayers in a region will be impacted by the unpaid costs introduced by sprawling communities.  However, no evidence from studying empirical data has been provided on the fiscal impact of sprawl on taxpayers.  Moreover, the regional context of sprawl issues was missing in the limited geographic scope of these fiscal impact studies on municipalities and school districts because they use a “bottom-up” approach. This involves detailed tabulations of all costs and revenues associated with a land use type or a development pattern.
2. The lack of temporal and spatial analysis 

Understanding fiscal implications of development in various parts of an urbanizing area can help planners optimize both geographic location and timing of future development (Tischler 1997).  An example of the time lag in fiscal impact is the following scenario. Once facilities and services have been extended to urbanizing areas, rapid development of these areas usually produces the best fiscal results.  Then debt service and other costs for new facilities benefit from steep increases in revenues from new development (Tischler 1997). Second, the location of a municipality in a metropolitan area has been found influential on municipal expenditure (Schmid 1997; Tischler 1997).  However, the fiscal factors pertaining to the timing and geographical distribution of projected developments have not been considered in these studies.

3. The failure to trace and tabulate costs and revenues as well as secondary and spillover effects

“The bottom line for fiscal impact analyses is the cash flow to the public sector, three components must be considered: revenues, capital costs, and operating costs” (Tischler, 1997).  In the first type of the studies concerning municipalities and school districts, revenues and operating costs are totally excluded.  However, Burchell and Tischler (Tischler, 1997) concluded that sprawl development increases some infrastructure costs by relatively small amounts,   while some services operating costs may vary significantly due to different development patterns such as fire protection.  In addition, developers often fund local road improvement costs; similarly, raising water rates often funds water and sewer costs (Tischler 1997).  A strong case for or against low-density development is not clear in the first type of these studies.  This is because lower-density might introduce more capital or operating costs, while the high market value of low-density residential development might generate greater net revenues than more compact development.  In addition, the studies did not include most rural developments that rely on unimproved roads, water wells, and septic tanks rather than more expensive facilities while they are the major forms of sprawl (Tischler 1997).  Although the second type of studies tabulated the costs and revenues associated with each land use type independent of larger development patterns, judgements have to be made to determine the costs and revenues associated with each type of land use (Burchell and Newman, 1996; Arend et al., 1996).  On the other hand, these studies concerning municipalities and school districts also fail to consider secondary and spillover effects.  An example of secondary effects could be the costs and revenues of residential development that often follow non-residential development and vice versa.  Spilled-over effects are often related to other cross-boundary issues such as that fact that school district boundaries do not match MCD boundaries

4. Conlusion:

The study intends to use a “top-down” approach - a multiple variable regression model - to study whether the change in single family land use is associated with the change in tax rate, while controlling for intervening factors (details see IV 1. (a) Methods) secondary effects and cross-boundaries issues.  Contrary to the small geographic scope of the studies concerning municipalities and school districts, the top-down approach allows a regional scope to study the fiscal impact of sprawl on taxpayers in Southeast Michigan.  The study will only provide initial exploration on fiscal factors pertaining to time and locations.  The studies concerning municipalities and school districts mentioned earlier only focus on one-year data and a location without metropolitan context such as a municipality or several developments.  Based on data availability, the study will attempt to look at the change over five and ten years, as well as generate bi-variate thematic maps that spatially show the change in land use and in tax rate in the context of a metropolitan area.