Fiscal impact analysis is geographically bounded, so costs and revenues are estimated only for the local communities that are experiencing the growth or land use change. State governments, for example, are not considered in the analysis. Lastly, fiscal impact analysis does not consider non-quantifiable costs and benefits such as aesthetic conditions and socioeconomic considerations. These variables cannot be easily accommodated into the standard models. This is a major shortcoming of the approach.
Development has impacts that go beyond the consequences to the municipal balance sheet.
Environmental, social, transportation, and visual impacts of development are important and should be acknowledged in any assessment of proposed developments. Analyzing only one type of impact may not provide enough information to decide whether to allow a development to proceed.