Fiscal Impact Report
4.0 Education Costs
The term "fiscal impact" is commonly employed to describe the "net fiscal impact" of a land use type or specific development project. Specifically, will the average annual municipal service costs exceed or be less than the generated annual real estate taxes and other associated municipal receipts? For Holbrook, as in most communities, education is the single most expensive municipal service cost. For FY2002 the education budget was approximately $10.5 million. However, in Massachusetts communities are permitted to pay various forms of school overhead and school related items off the school budget. In this instance, items such as health insurance, fica/medex, and various other costs add approximately $2 million dollars to school costs, for a total expenditure of approximately $12.5 million dollars. Thus, for a FY 2002 school system with approximately 1,450 students, Holbrook had a per pupil cost of $8,620.
In large measure the municipal cost associated with adding new students is a function of the capacity of the existing system. If a school system has considerable or moderate excess capacity and the community-wide rate of student growth is low, the incremental cost of adding new students is usually less than the average per student cost. However, if the overall school system or an affected elementary school district is at or near capacity it is likely that additional students may require increased staff, redistricting, or additions to the physical plant. In this instance, Holbrook is experiencing relatively stable population growth and our review of the state build-out projections indicates that future single family residential development is less than 5% of the existing number of dwelling units. However, our review also indicates that Holbrook has approximately 0.35 students per dwelling unit, essentially the average in Greater Boston. To be conservative, we have assumed a high incremental cost per new student, regardless of the essentially developed nature of the community. We assumed that the current per pupil cost ($8,620), minus 15% for administrative costs, reflects the incremental cost per new student for the foreseeable future. In this instance, the incremental school cost is determined to be approximately $7,325 per student.
4.1 Estimating School Children by Residential Type© 2002 The Mullins Company
