Forbes, NY
07-08-07
Mixed Economic Impact From Campaigns
By JIM DAVENPORT and CALVIN WOODWARD 07.08.07, 12:39 PM ET
The presidential contest is assumed to be a cash cow for early voting states. If
so, it probably will produce skim milk at best.
The fluid nature of the 2008 campaign, with candidates scattered across a larger
field of competition, is making for an unpredictable balance sheet for towns
where hotels and pizza shops fill up for a political event while police overtime
budgets stretch thin providing security.
The contenders are certainly spending millions - somewhere.
Yet their strategies shift with the winds, taking big dollars with them and leaving
nothing certain except that things will get busy near the day of decision.
The Iowa Republican Party, for one, probably took a multimillion-dollar hit when
two of the three top GOP candidates, Arizona Sen. John McCain and Rudy
Giuliani, decided to sit out an August straw poll that is a prime source of cash to
help the party pay for the caucuses. Giuliani's campaign estimated it would have
cost its operations $3 million to compete.
Federal figures show that 10 Democratic candidates spent $4.5 million on Iowa
businesses and staff in the last primary. That is a fraction of the benefits
estimated by boosters who liberally interpret the value of indirect spending.
Advertising, a huge expense for the candidates in every competitive state, often
is produced far away.
The economic benefits are illusive in South Carolina. The state is taking over
operation of the primary voting from the parties, at a cost to taxpayers of $2.2
million, not including security for the candidates.
Columbia Mayor Bob Coble estimated the GOP debate last month generated $4
million locally, half the economic impact of a home college football game at the
University of South Carolina.
"We had people spending a lot of money on hotels, food, catering," Coble said.
"Every candidate has a party."
Restaurant owners like these events.
"It brings people that have big wallets and even bigger egos and they can fill up a
bar quickly," said Mike Evans, general manager at Liberty Tap Room & Grill.
Such windfalls tend to be here today, gone tomorrow.
College of Charleston economist Frank Hefner, looking back at the 2000 GOP
debate held on campus, said little long-term benefit came of it and far less than if
the school's basketball team made it into the NCAA's Final Four.
A political gathering is "not even like a sports event or cultural event because
there's not much infrastructure that's built around it that stays there," he said.
New Hampshire, like Iowa and South Carolina, has been a hive of early activity,
bringing an obvious boost to the hospitality industry and more, especially when a
debate comes to town.
The leading candidates rented New Hampshire office space in early spring,
several months sooner than in the last campaign, and hotels say business from
the campaign is strong. So far, candidates have been in New Hampshire as often
as in the past, and starting earlier.
Whether that will last is anyone's guess. Absent a debate that brings candidates,
their entourages and media together in one spot, the benefits of the stumping
appear modest when spread around and are all but impossible to measure.
Iowa, Nevada, New Hampshire, South Carolina and Florida are planning their
contests in mid- to late January 2008. Hard on their heels are contests in 15 to
20 states, all on Feb. 5.
Candidates campaigning for trendsetting victories in the first states also have to
devote time and money for that huge second wave.
Dave Roederer, Iowa chairman for McCain, said candidates cannot spend as
much time in the state as before.
"We are going to have Super Tuesday," he said, and "the number of votes
involved there is going to way outshadow Iowa and New Hampshire put
together."
Dave Swenson, an economist at Iowa State University, said: "We have to
expect a very powerful reduction in total spending in Iowa because the
candidates now have to spread their money very strategically across many
venues."
In Algona, in northern Iowa, Republican Theresa DeLange was happy when
Democrat Hillary Rodham Clinton visited her pizza shop. "We made over 100
pizzas," she said. The Premier Pizza restaurant packed in 250 people; many
waited outside to shake Clinton's hand.
But there are costs, too.
When Clinton visited Davenport in January, it cost the city more than $5,000 for
police assistance. A visit by Sen. Barack Obama, D-Ill., in May cost $1,778. So
far they are the only candidates protected by the Secret Service, which calls on
local law enforcement to supplement security when the candidates come to town.
In the six months before the 2004 election, Davenport paid more than $104,000
for security provided by police and for use of the department's vehicles.
Security costs can be a sore point throughout the battleground states, during the
primaries and beyond. In the last campaign, many local officials billed campaigns
for reimbursement but often did not receive it because there is no obligation
under federal law for candidates to cover local security expenses.
In 2003, Hunts Point, Wash., with fewer than 500 people, spent $22,000 to rent
police officers from nearby towns when President Bush attended a fundraiser at
a billionaire's home, The Seattle Times reported.
For this campaign, South Carolina Gov. Mark Sanford told the state Law
Enforcement Division and the Highway Patrol to absorb security and public
safety costs within existing budgets and not seek more money from the
Legislature.
Work schedules were adjusted to meet the demands of the Columbia GOP
debate but the Highway Patrol spent $9,200 for overtime during the Democratic
debate in Orangeburg.
Calvin Woodward reported from Washington. Associated Press writers Amy
Lorentzen in Des Moines, Iowa, and Holly Ramer in Concord, N.H., contributed
to this report.
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