Managing Growth With Priority Funding Areas: A Good Idea Whose Time Has Yet to Come

Rebecca Lewis, Gerrit Knaap, and Jungyul Sohn (2009)

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Problem: In 1997, the State of Maryland adopted a bold new approach to growth management based on a novel instrument: priority funding areas (PFAs). PFAs contain growth by directing state spending to areas designated by local governments and reviewed by the state government. Despite widespread acclaim and subsequent imitation, little is known about whether PFAs effectively contain urban growth.

Purpose: The purpose of this article is to evaluate the adoption, implementation, and performance of PFAs in Maryland in order to provide planners and policymakers with insights into their efficacy as instruments for managing growth.

Methods: First, we describe the statutory definition and mandated role of PFAs in state funding. Then, we describe the process used to create PFAs, the resulting pattern of targeted growth areas, the relationship between PFAs and local comprehensive plans, and the extent to which PFAs altered state spending. Finally, we examine the effects of PFAs on residential development patterns.

Results and conclusions: We find that PFAs have fallen short of expectations. The criteria used to establish PFAs produced boundary configurations that vary widely and are in many cases not ideally suited to managing urban growth. Ten years after their official designation, PFAs are not well integrated in land use decision making processes in many local jurisdictions. Finally, state agencies have not altered budgetary systems to monitor and guide the spatial allocation of funds and there is little evidence that after 10 years they have had any effect on development patterns.

Takeaway for practice: Targeting state funds to promote compact growth is a conceptually sound approach to urban growth containment, as land is less likely to be developed if it is not served by public infrastructure. But, as with other planning tools, the key is effective implementation. If states want to contain growth by targeting state spending, they must change budgeting processes to ensure that funds are spent appropriately and that the level of state spending is large enough to make a difference.