Understanding
Your Local
Economy
Garen Evans
Outline
– Anatomy of a local economy
– Data
• Demographics
• Economics
• Fiscal
– Issues
• Commuting
• Health
Local Economy
So what?
The Local Economy
• Why?
– We live here.
– We work here.
– Leaders are expected to make informed
decisions.
• Citizens, commuters, businesses, tourists
• Potential entrepreneurs
• Fiscal Governance
• Resources
• Consumers
• Producers
Local Economy
• Resources:
– Air, water, land, minerals
– People: labor force, children, students, retirees,
tourists
– Factors of production
• Producers:
– Raw, processed, finished
• Consumers:
– Intermediate
– Final goods and services
Factors of Production
LAND
LABOR
CAPITAL
MANAGEMENT
Returns to Production
Land «« rent
Labor «« wages
Capital «« interest
Management «« profits
What Flows In?
Dollars from non-local purchases of
locally produced goods and services.
•
•
•
•
Manufactured goods and services
Agricultural commodities
Transfer payments
Tourism dollars
What Leaks Out?
Non-local spending
•
•
Consumer goods and services
Non-locally purchased business inputs
– Recall the four factors of production
Measuring the Economy
• Composition
– BLS: 12 industry super
sectors
• Indicators
– Demographic
• Population, income
– Economic
• Industry sales, jobs
– Fiscal
• Revenues and
expenditures
BLS Industry Super Sectors
•
•
•
•
•
•
•
Construction
Education and Health
Financial Activities
Government
Information
Leisure and Hospitality
Trade
• Manufacturing
• Natural Resources
and Mining
• Professional and
Business Services
• Transportation and
Utilities
• Other Services
Economic Indicators
Demographics
• Population
– School-aged
• infrastructure
– Elderly
• transfer payments: social security, Medicare, Medicaid
• Households
– Owner-occupied
– Important goal for low income communities
• Wealth accumulation
• Income:
Income
• Total Personal Income
• Earnings
– Less contributions to social insurance
• Dividends, interest, and rent
– Investment income
– Capital income
– Property income
• Transfer payments
Economics
• Industry Sales (output)
• Employment
• Labor Income
Wages and salaries + proprietors incomes
• Total Value Added (GDP)
Economics
• Industry Sales
– Total Industrial Output
• All transactions
Farmer sells cow to butcher
Butcher sells meat to McDonalds
McDonalds sells hamburger
Total Sales………………………………. $2.00
$0.50
$0.75
$1.75
Economics
• Total Value Added
– Value of firms output less cost of intermediate
goods that the firm purchases.
Farmer
Butcher ($0.75-0.50)
$0.25
McDonalds
($1.75-$0.75)
Total Value Added………………………. $1.75
$0.50
$1.00
Economics
• Employment: People & Jobs
– Civilian Labor Force (CLF)
• Employed Persons
• Unemployed Persons
• Unemployment Rate = unemployed / CLF
– Place of Work Employment
• Jobs
Oktibbeha County
• 1995-2004
– Comparisons with region and state.
– Population
– Employment
– Income
– Sales
– Commuting
Population
44,500
44,000
43,500
43,000
42,500
42,000
41,500
41,000
40,500
40,000
39,500
39,000
43,769
40,623
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Population Growth
Oktibbeha
Lowndes
Mississippi
1995-2004
7.74%
-0.01%
7.15%
2004-2010
2.21%
7.25%
4.81%
Population Growth
2.50%
2.00%
1.13%
1.50%
1.00%
0.50%
0.00%
-0.50%
1995
1996
1997
1998
1999
2000
2001
2002
-1.00%
Lowndes
Oktibbeha
MS
2003
2004
Civilian Labor Force
Employed
+
Unemployed
UNEMPLOYMENT RATE
Unemployed / (Employed + Unemployed)
or
Unemployed / Civilian Labor Force
Unemployment Rate
12.00
10.00
7.09
8.00
6.00
5.65
4.00
3.48
2.00
0.00
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Oktibbeha
Lowndes
MS
Civilian Labor Force
29,000
27,000
25,000
23,000
21,000
19,000
17,000
15,000
1995
1996
1997
1998
1999
Oktibbeha
2000
2001
2002
Lowndes
2003
2004
Where Do We Work?
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
1995
AGRI
1996
MINE
1997
CONST
1998
1999
MFG
2000
TRADE
2001
SVC
2002
2003
TCPU
2004
FIRE
Jobs in the Top Three Sectors
5,500
5,000
4,500
4,000
3,500
3,000
2,500
2,000
1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
MFG
SVC
TRADE
Job Growth by Sector
1995-2004
120%
100%
80.4%
80%
65.1%
60%
48.0%
32.9%
40%
20%
-2.1%
0%
-20%
AGRI
MINE
CONST
MFG
TRADE
SVC
TCPU
FIRE
Earning Trends by Sector
($M 2000)
$100
$90
$80
$70
$60
$50
$40
$30
$20
$10
$1995
MINE
1996
1997
CONST
1998
MFG
1999
2000
TRADE
2001
SVC
2002
2003
TCPU
2004
FIRE
Earnings Growth
1995-2004
180.0%
278.3%
160.0%
140.0%
120.0%
105.5%
100.0%
71.5%
80.0%
53.8%
60.0%
37.0%
40.0%
9.1%
14.4%
20.0%
0.0%
MINE
CONST
MFG
TRADE
SVC
TCPU
FIRE
Income Components
Transfer
Paym ents
17%
Dividens,
Interest & Rent
19%
Earnings
64%
Total Personal Income
$1,000.0
$800.0
$600.0
$400.0
$200.0
$1995
1996
1997
1998
1999
DIR
TP
2000
2001
EARN
2002
2003
2004
Revenues and Expenditures
• Revenues
– Taxes, charges, fees, transfers, bonds
• Expenditures
– Health, hospitals, education, public
welfare, highways, public safety: police and
fire protection
Tax Revenues
Ad Valorem
“according to the
value”
Retail Sales
State Tax Levies
Property Taxes
State Transfers
Property Taxes
• Assessed Value
• Taxable Value
– 10% Residential Property
– 15% Commercial Property
– 30% Motor Vehicles, et al.
• Tax Rate: Millage
Millage Rate
• Millage Rate is the tax rate per $1000 of
value.
• One Mill = 1/10th of One Cent
(0.001)
Example – Class 1 Property
• Assessed Value: $120,000
• Taxable Value: $12,000 (120000/10)
• Millage Rate: 111.09
• Tax Levy: 12 * 111.09 = $1,333.08
Retail Taxes
• Mississippi collects 7% sales tax on
many retail products.
• Eligible municipalities receive part of
sales taxes collected in their jurisdiction
• 18.75%
• City (ie., incorporated municipalities)
Retail Sales in 2000
• Oktibbeha County: $408 million
• $302 million in eligible municipalities:
• City Diversions:
– Maben:
– Starkville:
– Sturgis:
$86,899
$3,687,185
$40,838
Commuting
• Oktibbeha County
– 18,401 total
– 15,071 owncommute
– 3,330 out-commute
Out-commuters
3,330
MS: 3,134
AL: 73
TN: 17
LA: 26
Other: 80
In-Commuters
Mississippi
Alabama
Tennessee
Louisiana
Other
Total*
IN
3,557
92
26
16
42
3,733
OUT
3,134
73
17
26
80
3,330
NET
423
19
9
(10)
(38)
403
Other Issues
1. Local infrastructure
– Capacity
2. Health Care
– Impact of poor health – a case study
1. Capacity Issues
Capacity
5.76 Mgal/day
Average
3.6 MGal/day
Peak
4.4 Mgal/day
• Daily per-capita usage: 84 gallons (avg)
• Population growth: 2%
– Exceed system cap by 2027
– Exceed system peak by 2017
2. Health Issues
• Mississippi ranks highest for
–
–
–
–
Obesity
Heart Disease
Diabetes
Infant Mortality
• Employers
– Educated workforce
– Access to healthcare
Health = Wealth = Health = Wealth
…
• “During the past 30 days, how many
days did poor physical or mental health
keep you from doing your usual
activities?”
20.4% of all respondents
8.1% of workers
Health  $$$
$32.9 Million
Of LOST INCOME
$144 Million in present value losses accumulate
over 30 years
Understanding
Your Local
Economy
Garen Evans