A Study of the Economic Impact of New River Gorge National River

Transcription

1 A Study of the Economic Impact of New River Gorge National River on Fayette, Nicholas, Raleigh and Summers Counties, West Virginia New River Gorge Bridge Photo courtesy of NPS PREPARED FOR National Park Service, New River Gorge National River Glen Jean, West Virginia PREPARED BY David E. Versel Biddeford, Maine January 2006

2 Introduction and Summary The New River Gorge is, for many people, the central identifying characteristic of Southern West Virginia. This monumental geological feature represents many different things: breathtaking scenery, world-class whitewater, fascinating history and the opportunity to stand on the highest bridge span in North America (or even to jump off of it one day each year!) What is often overlooked is just how important the New River Gorge is to the economy of the region. As coal mining, railroad and timber harvesting jobs have been lost, outdoor recreation and tourism have taken over as the primary economic forces in Southern West Virginia. The economic importance of tourism is in large part due to the three federally-designated river segments in the region (New River Gorge National River, Bluestone National Scenic River and Gauley River National Recreation Area). These designations have spurred millions of dollars of investments in visitor facilities, interpretation, and conservation. These federal investments also provide a backbone of support for the many entrepreneurs in the region whitewater guides, restaurant and hotel owners, retail shop owners who owe their livelihoods to tourism. This report quantifies just how much the New River Gorge National River unit (which includes all three river segments) contributes to the region s economy on an ongoing basis. The goal of the report is to demonstrate that the three rivers offer more than scenery, history and adventure: they also represent essential components of Southern West Virginia s economy. Calvin Hite Superintendent New River Gorge National River Deborah Darden Deputy Superintendent New River Gorge National River Economic Impact of New River Gorge National River i

3 Table of Contents What is an Economic Impact Analysis?...1 What Does This Report Mean?...2 Data Sources...3 Direct Economic Impacts...4 Indirect Economic Impacts...14 Summary: Total Economic Impacts...18 Appendices...19 Economic Impact of New River Gorge National River ii

4 What is an Economic Impact Analysis? Every dollar earned has to come from someplace and go to another. By following the flow of money, you are able to understand many other things as well: Money spent in the region leads to the creation of jobs The creation of jobs means that people must be hired to fill them People hired to fill jobs must live near the jobs with their families Living near jobs means finding housing in the area Living in the area means spending money on products sold locally Local vendors buy at least some of their goods and services from other local vendors, who in turn buy at least some of their goods and services from other local vendors, who in turn In other words, if a million tourists visit a given region each year and spend a total of $50 million, the impact of that spending goes a great deal further than just the money that the tourists left behind. That money sustains jobs, families, housing, businesses and, indeed, the community. Economic Impact Analysis attempts to follow this flow of money through a region s economy. By doing this, the overall effect of a particular economic activity can be expressed in the following ways: Total spending generated by the given economic activity Number of jobs supported Amount of earnings supported Local and state tax revenues produced Spending, jobs and earnings in other sectors of the regional economy There are several different ways to look at the impact of a given economic activity. In this study, impacts are essentially separated into direct impacts and indirect impacts. In brief: Direct Impacts are the immediate effects of money spent in the region by the source of economic activity (in this case, visitors to the New River Gorge National River). These include earnings by local businesses, jobs supported in those businesses and state and local taxes paid by businesses and their employees. An example of the direct impact of tourist activity is that a hotel can employ 50 workers and pay $750,000 per year in salaries to its employees. Indirect impacts measure how money is spent by those receiving the direct impacts. Using the hotel example, 40 of those 50 workers may live locally and buy their groceries at the local food market, but the other 10 may live two counties away and spend their retail dollars elsewhere. The hotel will also need to buy supplies and pay for advertising some of that money will be spent locally, but some will be spent elsewhere. Indirect impacts are measured by the use of economic multipliers. Multipliers measure how much total economy activity is induced within a region s economy as the result of direct spending. There are three different types of multipliers: output, employment, earnings and output. Output multipliers determine how much total economic activity (in dollars) will result from a given amount of direct spending. Employment multipliers determine how many total jobs are created as a result of a given amount of direct spending or employment. Earnings multipliers determine how much will be paid out in wages and benefits as a result of a given amount of direct spending or direct income. Economic Impact of New River Gorge National River Page 1

5 What Does This Report Mean? This report presents information regarding the economic impact of the New River Gorge National River in Southern West Virginia. New River Gorge National River is a unit of the national park system; the National Park Service (NPS) oversees the management and stewardship of three separate units located in Fayette, Nicholas, Raleigh and Summers counties, West Virginia. These NPS units are: New River Gorge National River Gauley River National Recreation Area Bluestone National Scenic River These three areas together encompass more than 90 miles of some of the most scenic river corridors in the United States. The New and Gauley Rivers are two of the most popular whitewater rafting destinations in the eastern U.S., and draw tens of thousands of visitors each year for this reason. The purpose of this report is to measure the contribution of these National Park Service sites to the economy of the four-county region (Fayette, Nicholas, Raleigh and Summers). The figures displayed in this report signify two types of economic activity: How the National Park Service operation itself contributes to the economy; and How spending by visitors to the New, Gauley and Bluestone Rivers supports the regional economy. All economic impact data presented in this report are done on an annualized basis. In other words, the numbers shown represent the ongoing effects of the New River Gorge area on the region s economy for each year that NPS maintains its presence and its maintenance of the river segments. A measurement of ongoing economic impact would typically not include temporary or short-term impacts such as construction or special projects. However, over the past several years, about a third of the NPS budget at New River Gorge has been for capital projects. Since these funds have remained stable for several years, they are included in this impact study. If a major construction project requiring additional funding were to be undertaken, it would not be counted as part of the ongoing economic impact, but rather as a one-time economic event. The New River winds past Dowdy Bluffs Photo courtesy of NPS Economic Impact of New River Gorge National River Page 2

6 Data Sources The information presented in this report represents a new analysis of many different existing data sources. It relies entirely on secondary data sources and does not contain any new research. The data sources used include National Park Service reports generated at the Federal level, statewide research on the economy and tourism, a previous local impact study and information collected for this project by NPS staff at the New River Gorge National River. The primary data sources for this report are: Economic Impact of Travel on West Virginia, West Virginia Division of Tourism, June 2005 Economic Impacts of New River Gorge National River Visitor Spending, Daniel Stynes, August 2005 National Park Service 2004 Statistical Abstract New River Gorge National River Visitor Study, Summer 2004, University of Idaho Park Studies Unit Operations Data from National Park Service, New River Gorge National River Unit Regional Input-Output Modeling System (RIMS II), U.S. Bureau of Economic Analysis U.S. Bureau of the Census ( WORKFORCE West Virginia, Labor Market Information ( Thurmond Depot, early 1900s Photo courtesy of NPS Economic Impact of New River Gorge National River Page 3

7 Direct Economic Impacts Direct economic impacts of the New River Gorge National River have been measured in four separate ways: NPS Spending Visitor Spending Jobs and Earnings Taxes Each of these impact categories is detailed below. NPS Spending Impacts The National Park Service unit at New River Gorge National River is mostly supported through federal funding support, though it does also take in some money from user fees, sales in its visitor centers and donations. Much of the money taken in by the NPS unit is spent locally, though some of it is spent outside the region. Only the money spent within the four-county region by NPS is considered for economic impact purposes. The total amount of money spent by the NPS unit at New River Gorge for Fiscal Year 2005 was about $11.5 million. Of this amount, about two-thirds were spent on operations and maintenance functions and the remaining third was spent on capital investments and special projects. While economic impact analyses would typically not measure the effects of the latter category, the NPS office has been receiving about this much each year for several years for such projects and anticipates to continue receiving this funding. Thus, the entire budget is considered here. The budget breaks down into four separate categories: Salaries and Benefits, Utilities, Supplies and Equipment; and Procurement. Salaries and Benefits and Utilities are assumed to be spent entirely within the region (nearly all NPS employees live in the four counties) and all utility payments are to local utilities. For the other two categories, much of the spending actually occurs outside the four-county region. The assumptions regarding spending by sub-category are summarized in Table 1. These assumptions were made by the consultant based on the understanding of the how and where the NPS New River Gorge unit spends its money. Economic Impact of New River Gorge National River Page 4

8 Table 1 Assumed Spending in Four-County Region by Sub-Category Category/Subcategory Spent in Region Salaries & Employee Payments 100 Benefits 50 Utilities 100 Supplies & Equipment Supplies 40 Equipment 20 Fixed Assets 100 Procurement Travel 10 Vehicle Rental 25 Transportation 20 Freight 0 GSA Vehicle Rental 0 Printing 75 Other Services 20 Using these assumptions, the total spending impacts of the National Park Service operation are as follows: Table 2 NPS Spending Impacts Category Total Spending Spending in Region Salaries & Employee Payments $4,960,500 $4,960,500 Benefits $1,429,000 $714,500 Utilities $317,000 $317,000 Supplies & Equipment $1,775,600 $644,600 Procurement $2,922,600 $571,800 TOTAL $11,404,900 $7,208,400 Visitor Spending Impacts From an economic impact perspective there are two distinct types of visitors: recreational and non-recreational. Most of the visitation to New River Gorge is by recreational visitors. There are some non-recreational visitors to the site, mainly those doing business with NPS. However, aside from a count in the NPS Statistical Abstract of 2,400 non-recreational visitors, there are no data available about non-recreational visitors. For this reason, only recreational visitor impacts are considered here. Economic Impact of New River Gorge National River Page 5

9 Recreational Visitor Spending There were two key questions for which answers were needed to measure the impacts of recreational visitor spending at New River Gorge National River: 1. How many travel parties visit the National River each year? 2. How much does each travel party spend during its visit on different goods and services? The first question was answered by three pieces of information. First was, the National Park Service 2004 Statistical Abstract, which estimates that a total of 1,346,501 persons visited all three sites managed by the New River Gorge National River for recreational trips in that year. According to the 2005 study by Professor Daniel Stynes of Michigan State University entitled, Economic Impacts of New River Gorge National River Visitor Spending, 18.7 of visitors to New River Gorge made multiple visits during their trips and were therefore double counted. Thus, the actual number of recreational visitors to New River Gorge was about 1,094,600. The 2004 New River Gorge National River Visitor Study found that the average travel party size of parties visiting New River Gorge was 5.5 persons. Applying this party size figure to the total number of visitors, the estimated number of annual recreational travel parties comes to 199,000. The Visitor Study also surveyed park users about how much money they spent in the area on several different kinds of goods and services: Hotels/motels/cabins; Camping fees & charges; Guide fees & charges; Restaurants & bars; Groceries/take-out food; Gas and oil; Other Transportation; Admission/recreation/entertainment fees; and Other purchases. The per party spending figures generated by the Visitor Study are used in Table 3 to estimate total visitor spending in the region. Table 3 shows the per party spending for each of these categories, as well as the total spending in the region based on the figure of 199,000 travel parties per year. Table 3 Recreational Visitor Spending in Region Based on 199,000 Travel Parties Category Per Party Spending Total Spending Hotels/motels/cabins $71.80 $14,288,200 Camping fees & charges $31.90 $6,348,100 Guide fees & charges $75.80 $15,084,200 Restaurants & bars $59.90 $11,920,100 Groceries/take-out food $31.90 $6,348,100 Gas and oil $39.90 $7,940,100 Other Transportation $4.00 $796,000 Admission/recreation/entertainment fees $47.90 $9,532,100 Other purchases $35.90 $7,144,100 Total Recreational Visitor Spending $ $79,401,000 Economic Impact of New River Gorge National River Page 6

10 Visitor Spending by County Table 4 shows estimates of annual visitor spending for each of the four counties in the region. The overall distribution of spending was estimated based on the New River Gorge National River Visitor Study question regarding the Community used to obtain support services. Based on responses to this survey, the breakdown of spending is assumed to be: - Fayette County: 25 of spending - Nicholas County: 7.5 of spending - Raleigh County: 50 of spending - Summers County: 17.5 of spending This is the overall distribution of spending. However, for each spending category, each county has different distributions of businesses. For example, the Beckley area in Raleigh County has a strong distribution of hotels and restaurants, but Fayette and Nicholas counties have strong concentrations of guides. Table 4 Distribution of Spending by County Category Total Spending Fayette County Nicholas County Raleigh County Summers County $ $ $ $ Hotels/motels/ $14,288, $2,143,200 5 $714, $10,001, $1,428,800 cabins Camping $6,348, $1,904, $634, $1,904, $1,904,400 Guides $15,084, $4,902, $2,262, $3,016, $4,902,400 Restaurants & bars $11,920, Groceries/ $6,348, take-out food Gas and oil $7,940, Other Transp. $796, Admission/ $9,532, recreation/ entertainment Other $7,144, purchases Total Visitor Spending $79,401, $2,980,000 5 $952,200 5 $2,183,500 8 $199,000 5 $2,859,600 5 $1,786,000 5 $19,910,300 8 $596, $317, $595, $39, $476, $357, $5,994, $7,152, $4,761,100 7 $3,970, $477, $4,766, $3,572, $39,622, $1,192,000 $444,400 $1,191,000 $79,600 $1,429,800 $1,428,800 $14,001,200 Economic Impact of New River Gorge National River Page 7

11 Jobs and Earnings Impacts Calculating Jobs and Earnings resulting from spending by the National Park Service and visitors to New River Gorge National River required two sets of assumptions: 1. The share of income spent on labor by spending category; and 2. The average annual salary for employees working in each category. The share of income spent on labor varies greatly by category, as categories like gas/oil, groceries, and restaurants/bars spend a great deal of their income on inventory, while campgrounds, guide services and entertainment venues spend much higher shares on labor. Table 5 shows total spending for each category, the amount assumed to be spent on labor for each category and the total earnings by category. Table 5 Total Earnings Impacts Category Total Local Spent Total Earnings Spending on Labor National Park Service $7,208, $4,960,500 Hotels/motels/cabins $14,288, $7,144,100 Camping $6,348, $3,174,050 Guides $15,084, $7,542,100 Restaurants & bars $11,920, $3,576,030 Groceries/take-out food $6,348, $1,904,430 Gas and oil $7,940, $1,588,020 Other Transportation $796, $318,400 Admission/recreation/entertainment $9,532, $5,719,260 Other purchases (Retail) $7,144, $2,143,230 Total Earnings Impacts $86,609, $38,070,120 To translate the total earnings figures from Table 5 to jobs, data on average annual wages was needed. This information is reported for each county and region of West Virginia by WORKFORCE West Virginia s Labor Market Information division. Since the jobs and earnings depicted in this report are spread over four counties, the wage figures used are for Workforce Investment Area (WIA 1), an eleven-county region that includes all four of the counties in the impacted region. WORKFORCE West Virginia reports its data using the categories specified in the North American Industrial Classification System (NAICS). Because the spending categories do not match up exactly with the employment categories defined by NAICS, the best fit was used for each one. Table 6 lists total earnings, the matching NAICS category, the average annual salary for each category and the total number of full-time equivalent (FTE) jobs supported for each category. An FTE job is defined as the equivalent number of employees who would be needed to work 40 hours a week for an entire year to fill the positions. Since much of the visitor spending in the New River Gorge area is seasonal, there are likely many more people employed in these categories during the peak months of May through October. Economic Impact of New River Gorge National River Page 8

12 Category Table 6 Total Employment Impacts Total Earnings NAICS Category Average Annual Salary Total Jobs Supported National Park Service $4,960,500 na $35, Hotels/motels/cabins $7,144, Hotels & motels $22, Camping $3,174, RV Parks & $12, recreational camps Guides $7,542, Leisure and $13, Hospitality Restaurants & bars $3,576, Food services & $10, drinking places Groceries/take-out food $1,904, Food & beverage $16, stores Gas and oil $1,588, Gasoline Stations $12, Other Transportation $318, Transportation & Warehousing $28, Admission/recreation/ $5,719, Arts, recreation & $11, entertainment entertainment Other purchases (Retail) $2,143, Retail Trade $19, Total Jobs Impacts $38,070,120 $15,300 2,488 Table 7 shows Jobs and earnings impacts by county. These figures are based on the same percentages of spending by county used in Table 4, with the exception of NPS employment, which is based on actual shares of employment by county. Economic Impact of New River Gorge National River Page 9

13 Table 7 Jobs and Earnings Impacts by County Category Fayette County Nicholas County Raleigh County Summers County Jobs Earnings Jobs Earnings Jobs Earnings Jobs Earnings National Park 65 $2,328,470 3 $99, $2,378,020 4 $148,630 Service Hotels/motels/ 48 $1,075, $358, $5,017, $716,800 cabins Camping 78 $967, $322, $967, $967,200 Guides 179 $2,466, $1,138, $1,518, $2,466,750 Restaurants & 85 $892, $178, $2,142, $357,000 bars Groceries/ takeout 18 $289,800 6 $96, $1,449,000 8 $135,240 food Gas and oil 36 $443, $120, $806, $241,800 Other Transp. 3 $72,250 1 $14,450 6 $173,400 1 $28,900 Admission/ 153 $1,728, $288, $2,881, $864,450 recreation/ entertainment Other purchases 28 $528,000 6 $105, $1,056, $422,400 Totals 691 $10,792, $2,722,580 1,153 $18,388, $6,349,170 NOTE: County totals may not exactly add up to overall totals due to rounding. Tax Impacts There are many different types of state, county and local taxes affected by any economic activity. However, most of them are very difficult to directly attribute to a single activity. For example, many municipalities in West Virginia assess local taxes on utility usage. This tax actually represents a major income source for many city and town governments. But calculating the impacts of tourism activity on a utility tax would require knowing specific information about utility usage by all homes and businesses that are made possible by tourism. There are, however, a number of state and local taxes that can be reasonably estimated: State sales taxes are based on gross income to businesses, which has already been calculated. State lodging taxes are based on gross receipts by lodging properties, which have already been calculated. State income taxes in West Virginia are based on the income bracket of those earning the income. Income brackets are easily determined based on the average income levels for each of the economic sectors examined in this study. Local property taxes can be difficult to determine, but are too important to omit completely. This study only focuses on the residential property taxes paid to the four counties. It does not look at non-residential taxes nor does it calculate additional taxes paid to city or town governments, as it would be too difficult to accurately estimate these figures. Payments in Lieu of Taxes (PILOT) that the National Park Service pays to the four counties, since federally owned land is not directly taxed by local jurisdictions. State Sales and Lodging Taxes As stated above, sales and lodging taxes are simply based on applying the tax rate to gross receipts. The state s sales tax rate is 6 and its lodging tax rate is 3. Table 8 displays sales and lodging tax impacts from New River Gorge National River. Economic Impact of New River Gorge National River Page 10

14 Table 8 Sales and Lodging Tax Impacts Sales Taxes Lodging Taxes Total Gross Receipts $86,609,400 $20,636,300 Tax Rate Tax Impacts $5,196,600 $619,100 State Income Taxes The State of West Virginia assesses income taxes based on a sliding scale that is tied to income. For each bracket, there is a minimum tax payment for the low end of the bracket and a percentage rate applied to all earnings above the base. The calculation of income tax impacts from New River Gorge National River makes three key assumptions to determine which tax brackets to use: The average salary for each employment category is applied to all jobs in the category. There are, of course, variations among income levels for each individual employee, but using the average is the most accurate measure of estimating tax impacts. Taxes are applied to the full amount of earnings and do not adjust for possible deductions. Persons whose jobs depend on tourism activity may not necessarily be the only wage earners in their households. Therefore the actual tax bracket may be higher. However, it is not easy to estimate how much each earner would contribute to total household income. Table 9 shows estimated state income tax impacts of New River Gorge National River Table 9 State Income Tax Impacts Empl. Bracket Base Earnings Base Taxes* Excess Earnings Tax Rate Excess Taxes Total Taxes NERI 138 $25-40K $3,450,000 $124,200 $1,510, $68,000 $192,200 Employees Hotels/motels/ 320 $10-25K $3,200,000 $96,000 $3,944, $157,800 $253,800 cabins Camping 260 $10-25K $2,600,000 $78,000 $574, $23,000 $101,000 Guides 550 $10-25K $5,500,000 $165,000 $2,042, $81,700 $246,700 Restaurants & 340 $10-25K $3,400,000 $102,000 $176, $7,000 $109,000 bars Groceries/takeout 120 $10-25K $1,200,000 $36,000 $704, $28,200 $64,200 food Gas and oil 130 $10-25K $1,300,000 $39,000 $288, $11,500 $50,500 Other 10 $25-40K $250,000 $9,000 $68, $3,100 $12,100 Transportation Admission/ 510 $10-25K $5,100,000 $153,000 $619, $24,800 $177,800 recreation/ entertainment Other purchases 110 $10-25K $1,100,000 $33,000 $1,043, $41,700 $74,700 Total State Income Taxes 2,488 $27,100,000 $835,200 $10,970,120 $446,800 $1,282,000 * Base taxes paid per employee are $300 for the $10-25K category and $900 for the $25-40K category. Economic Impact of New River Gorge National River Page 11

15 Local Property Taxes As stated earlier the calculation of local property taxes only looks at residential property tax impacts on the four counties. It does not calculate commercial or industrial impacts, nor does it look at city or town property taxes. It also does not include personal property or excise taxes on items such as cars, boats and recreational vehicles, as any estimates of these taxes would be very inaccurate. The determination of residential property taxes makes the blanket assumption that the average person earning wages as a direct result of tourism activity at New River Gorge National River accounts for 65 of his or her total household earnings. This share likely varies by employment category, as some categories pay higher than others. But accurate estimates of shares by category would be extremely difficult to produce. A second assumption pertains to the relationship between household income and home value. It is assumed that annual household income, on average, equals 35 of home value. So a household earning $50,000 is assumed to live in a home valued at about $143,000. A final key assumption is that local property taxes are assessed based on 60 of the total property value. Table 10 shows residential property tax impacts on the four county governments. Table 10 Residential Property Tax Impacts Fayette Nicholas Raleigh Summers Total Total $10,792,370 $2,722,580 $18,388,720 $6,349,170 $38,252,8840 Earnings Household $16,603,700 $4,188,500 $28,290,400 $9,768,000 $58,850,600 Earnings* Total $47,439,100 $11,967,100 $80,829,700 $27,908,600 $168,144,500 Property Value** Assessed Property Value*** $28,463,400 $7,180,300 $48,497,700 $16,745,100 $100,886,500 Tax Rates per $10,000 County School Total Taxes Paid County $231,100 $41,100 $277,500 $95,600 $645,300 School $494,500 $87,600 $842,500 $137,100 $1,561,700 Total $725,600 $128,700 $1,120,000 $232,700 $2,207,000 * Assumes that primary wage earner accounts for 65 of total household income. ** Assumes income to property value ratio of 35 *** Ratio of assessed value to total value is 60. Payments in Lieu of Taxes (PILOT) Federal (public) land administered by the National Park Service is not directly taxed by the four county governments. Instead of assessing taxes, as is done for private land, NPS has agreements with each county to pay an amount each year in lieu of property taxes. These fees cover local services and expenses for each jurisdiction. Economic Impact of New River Gorge National River Page 12

16 The National Park Service s Land Resources Program in Washington has made estimates regarding annual PILOT funds paid by the New River Gorge Unit to the four counties. In 2005, the amounts transferred to each county were: Fayette County: $66,889 Nicholas County: $467 Raleigh County: $19,196 Summers County: $3,215 Total PILOT Payments: $89,767 Summary of Direct Economic Impacts Table 11 summarizes all direct economic impacts of New River Gorge National River. Table 11 Summary of Direct Economic Impacts NPS SPENDING Total NPS Spending $11,404,900 NPS Spending in the Region $7,208,400 VISITOR SPENDING Total Visitor Spending $79,401,000 Visitor Spending by County Total of Total Fayette $19,910, Nicholas $5,994, Raleigh $39,622, Summers $14,001, TOTAL DIRECT SPENDING Total Direct Spending (NPS and Visitor Spending) $86,609,400 JOBS AND EARNINGS Jobs Earnings Avg. Salary Fayette 691 $10,792,370 $15,600 Nicholas 192 $2,722,580 $14,200 Raleigh 1,153 $18,388,720 $15,900 Summers 454 $6,349,170 $14,000 Totals 2,488 $38,070,120 $15,300 TAXES State Taxes Sales $5,196,600 Lodging $619,100 Income $1,282,000 Total State Taxes $7,097,700 County Taxes Property Taxes PILOT Funds Total Taxes Fayette $725,600 $66,889 $792,489 Nicholas $128,700 $467 $129,167 Raleigh $1,120,000 $19,196 $1,139,196 Summers $232,700 $3,215 $235,915 Total County Property Taxes $2,207,000 $89,767 $2,296,767 Total Tax Impacts $9,304,700 $9,394,467 NOTE: County totals may not exactly add up to overall totals due to rounding. Economic Impact of New River Gorge National River Page 13

17 Indirect Economic Impacts Indirect economic impacts of the New River Gorge National River have been measured in two different ways Spending impacts Jobs and Earnings impacts All indirect impacts were measured through the use of multipliers from the U.S. Bureau of Economic Analysis (BEA) Regional Input-Output Modeling System (RIMS II). Multipliers from BEA s 2003 regional economic accounts were used. Two different types of multipliers are used: Final-demand multipliers were used to measure indirect spending impacts. These multipliers take the total spending generated by specific economic activities and project total spending, jobs and earnings impacts. For example, the final demand output multiplier for the Accommodation industry in the region is So, if a hotel in the region spends $1 million per year on employee salaries and contracts to local vendors, the total impact on the regional economy would be $1,466,500. So, of the $1 million paid out to employees and vendors, $466,500 is respent in the local economy before leaking out. Direct-effect multipliers differ from final-demand multipliers in that they use direct impacts of jobs and wages as inputs to estimate indirect impacts of jobs and wages, instead of using spending to project jobs and wages. Using the same example of the hotel, assume that it employs 50 people in the region and pays out $500,000 in salaries. The region s directeffect multipliers for the Accommodation industry are for jobs and for income. So the total economic effects are 70 jobs and $645,000 in income and the indirect effects are 20 jobs and $145,000 in income. The RIMS II multipliers used in this study are for the four-county region of Fayette, Nicholas, Raleigh and Summers. These multipliers essentially measure how integrated the regional economy is by estimating the total impact on the region s economy from a given amount of spending, job creation or wages paid by an economic activity in a specific industry. As a note, indirect tax impacts have not been estimated. Indirect impacts, by their nature, measure the broad impacts on a region s economy and are therefore very difficult to attribute to specific economic activities. Indirect impacts are detailed below. Economic Impact of New River Gorge National River Page 14

18 Spending Impacts Indirect spending impacts apply the region s final-demand output multipliers to the total direct spending figures for each major industry from Table 7. Table 12 shows the results. Category Table 12 Indirect Spending Impacts Multiplier Category Used Total Local Spending Final Demand Multipliers Total Economic Impacts Indirect Economic Impacts National Park Other services $7,208, $11,368,370 $4,159,970 Service Hotels/motels/ Accommodation $14,288, $20,953,650 $6,665,450 cabins Camping Accommodation $6,348, $9,309,490 $2,961,390 Guides Amusements, gambling & recreation $15,084, $22,888,770 $7,804,570 Restaurants & Food services & $11,920, $17,868,230 $5,948,130 bars drinking places Groceries/takeout Food services & $6,348, $9,515,800 $3,167,700 food drinking places Gas and oil Retail Trade $7,940, $11,781,520 $3,841,420 Other Transportation Other transportation & $796, $1,267,230 $471,230 Admission/ recreation/ entertainment Other purchases (Retail) Total Spending support activities Amusements, gambling & recreation $9,532, $14,464,010 $4,931,910 Retail Trade $7,144, $10,600,420 $3,456,320 $86,609,400 $130,017,490 $43,408,090 Impacts NOTE: Multipliers are from U.S. Bureau of Economic Analysis Regional Input-Output Modeling System (RIMS II) Economic Impact of New River Gorge National River Page 15

19 Jobs and Income Impacts Indirect spending impacts apply the region s direct-effect multipliers for jobs and income to the total jobs and income figures for each major industry from Table 7. Tables 13 and 14 show the results. Category Table 13 Indirect Jobs Impacts Multiplier Category Used Direct Jobs Direct- Effect Multipliers Total Economic Impacts Indirect Economic Impacts National Park Other services Service Hotels/motels/ Accommodation cabins Camping Accommodation Guides Amusements, gambling & recreation Restaurants & Food services & bars drinking places Groceries/take-out Food services & food drinking places Gas and oil Retail Trade Other Transportation Other transportation & Admission/ recreation/ entertainment Other purchases (Retail) Total Jobs support activities Amusements, gambling & recreation Retail Trade ,488 3,550 1,062 Impacts NOTE: Multipliers are from U.S. Bureau of Economic Analysis Regional Input-Output Modeling System (RIMS II) Economic Impact of New River Gorge National River Page 16

20 Category Table 14 Indirect Income Impacts Multiplier Category Used Direct Income Direct- Effect Multipliers Total Economic Impacts Indirect Economic Impacts National Park Other services $4,960, $6,942,220 $1,981,720 Service Hotels/motels/ Accommodation $7,144, $9,215,890 $2,071,790 cabins Camping Accommodation $3,174, $4,094,520 $920,470 Guides Amusements, gambling & recreation $7,542, $9,683,300 $2,141,200 Restaurants & Food services & $3,576, $4,330,930 $754,900 bars drinking places Groceries/takeout Food services & $1,904, $2,306,460 $402,030 food drinking places Gas and oil Retail Trade $1,588, $2,064,580 $476,560 Other Transportation Other transportation & $318, $487,180 $168,780 Admission/ recreation/ entertainment Other purchases (Retail) Total Jobs support activities Amusements, gambling & recreation $5,719, $7,342,960 $1,623,700 Retail Trade $2,143, $2,786,410 $643,180 $38,070,120 $49,254,450 $11,184,330 Impacts NOTE: Multipliers are from U.S. Bureau of Economic Analysis Regional Input-Output Modeling System (RIMS II) Summary of Indirect Economic Impacts Table 15 summarizes all indirect economic impacts of New River Gorge National River. Table 15 Summary of Indirect Impacts Type of Impact Indirect Impacts Total Spending $43,408,090 Jobs 1,062 Income $11,184,330 Economic Impact of New River Gorge National River Page 17

21 Summary: Total Economic Impacts Table 16 displays the total economic impacts of New River Gorge National River on Fayette, Nicholas, Raleigh and Summers Counties. Table 16 Summary of Total Economic Impacts Direct Impacts Indirect Impacts Total Impacts SPENDING, JOBS AND INCOME IMPACTS Spending Impacts $86,609,400 $43,408,090 $130,017,490 Jobs Impacts 2,488 1,062 3,550 Income Impacts $38,070,120 $11,184,330 $49,254,450 TAX IMPACTS (DIRECT ONLY) State Taxes $7,097,700 County Property Taxes $2,207,000 County PILOT Funds $89,767 Total Tax Impacts $9,394,467 The total economic impact of New River Gorge National River on the fourcounty region is estimated to be: $130,017,490 in annual spending 3,550 jobs $49,254,450 in income $9,394,467 in taxes Economic Impact of New River Gorge National River Page 18

22 Appendices Appendix A General Limiting Conditions Appendix B Analytical Tables Economic Impact of New River Gorge National River Page 19

23 Appendix A General Limiting Conditions Every reasonable effort has been made to ensure that the data contained in this study reflects the most accurate and timely information possible: it is believed to be reliable. This study is based on estimates, assumptions and other information and creative solutions developed by David E. Versel, Planning Consultant, from his independent research effort, general knowledge of the industry and consultations with the Client and its representatives. No responsibility is assumed for inaccuracies in reporting by the Client, its agent and representatives or any other data source used in preparing or presenting this study. This report is based on information that was current as of December 5, 2005 and David E. Versel, Planning Consultant, has not undertaken any update of his research effort since. No warranty or representation is made by David E. Versel, Planning Consultant, that any of the projected values or results contained in this study will actually be achieved. This study is qualified in its entirety by, and should be considered in light of, these limitations, conditions and considerations. Economic Impact of New River Gorge National River Page 20

24 Appendix B Analytical Tables Table 1: Direct Spending by NPS New River Gorge National River Unit and Impacts on Regional Economy (FY 2005) Table 2: Direct Impacts of Recreational Visitor Spending Table 3: Direct Impacts of All Visitor Spending Table 4: Direct Employment and Earnings Impacts Table 5: Direct State Tax Impacts of New River Gorge National River Table 6: Local Property Tax Impacts Table 7: Summary of Direct Impacts Table 8: Indirect Spending Impacts Table 9: Indirect Jobs and Income Impacts Economic Impact of New River Gorge National River Page 21