1. Understanding Your Local Economy Garen Evans

2. Outline –Anatomy of a local economy –Data Demographics Economics Fiscal –Issues Commuting Health

3. Local Economy So what?

4. 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

6. Resources Consumers Producers

7. 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

9. Factors of Production LAND LABOR CAPITAL MANAGEMENT

10. Returns to Production Land «« rent Labor «« wages Capital «« interest Management «« profits

13. What Flows In? Dollars from non-local purchases of locally produced goods and services. Manufactured goods and services Agricultural commodities Transfer payments Tourism dollars

14. What Leaks Out? Non-local spending Consumer goods and services Non-locally purchased business inputs –Recall the four factors of production

17. Measuring the Economy Composition –BLS: 12 industry super sectors Indicators –Demographic Population, income –Economic Industry sales, jobs –Fiscal Revenues and expenditures

18. 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

20. Economic Indicators

21. Demographics Population –School-aged infrastructure –Elderly transfer payments: social security, Medicare, Medicaid Households –Owner-occupied –Important goal for low income communities Wealth accumulation Income:

22. Income Total Personal Income Earnings –Less contributions to social insurance Dividends, interest, and rent –Investment income –Capital income –Property income Transfer payments

23. Economics Industry Sales (output) Employment Labor Income Wages and salaries + proprietors incomes Total Value Added (GDP)

24. Economics Industry Sales –Total Industrial Output All transactions Farmer sells cow to butcher$0.50 Butcher sells meat to McDonalds $0.75 McDonalds sells hamburger$1.75 Total Sales……………………………….$2.00

25. Economics Total Value Added –Value of firms output less cost of intermediate goods that the firm purchases. Farmer$0.50 Butcher($0.75-0.50)$0.25 McDonalds ($1.75-$0.75)$1.00 Total Value Added……………………….$1.75

26. Economics Employment: People & Jobs –Civilian Labor Force (CLF) Employed Persons Unemployed Persons Unemployment Rate = unemployed / CLF –Place of Work Employment Jobs

27. Oktibbeha County 1995-2004 –Comparisons with region and state. –Population –Employment –Income –Sales –Commuting

28. Population

29. Population Growth

31. Civilian Labor Force Employed + Unemployed UNEMPLOYMENT RATE Unemployed / (Employed + Unemployed) or Unemployed / Civilian Labor Force

32. Unemployment Rate

33. Civilian Labor Force

34. Where Do We Work?

35. Jobs in the Top Three Sectors

36. Job Growth by Sector 1995-2004

37. Earning Trends by Sector ($M 2000)

38. Earnings Growth 1995-2004

39. Income Components

40. Total Personal Income

41. Revenues and Expenditures Revenues –Taxes, charges, fees, transfers, bonds Expenditures –Health, hospitals, education, public welfare, highways, public safety: police and fire protection

42. Tax Revenues Ad Valorem “according to the value” Property Taxes Retail Sales State Tax Levies State Transfers

43. Property Taxes Assessed Value Taxable Value –10% Residential Property –15% Commercial Property –30% Motor Vehicles, et al. Tax Rate: Millage

44. Millage Rate Millage Rate is the tax rate per $1000 of value. One Mill = 1/10 th of One Cent (0.001)

45. 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

46. 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)

47. Retail Sales in 2000 Oktibbeha County: $408 million $302 million in eligible municipalities: City Diversions: –Maben: $86,899 –Starkville: $3,687,185 –Sturgis: $40,838

48. Commuting Oktibbeha County –18,401 total –15,071 own- commute –3,330 out-commute

49. Out-commuters 3,330 MS: 3,134 AL: 73 TN: 17 LA: 26 Other: 80

50. In-Commuters

51. Other Issues 1. Local infrastructure –Capacity 2. Health Care –Impact of poor health – a case study

52. 1. Capacity Issues Capacity 5.76 Mgal/day Average 3.6 MGal/day Peak 4.4 Mgal/day

53. Daily per-capita usage: 84 gallons (avg) Population growth: 2% –Exceed system cap by 2027 –Exceed system peak by 2017

54. 2. Health Issues Mississippi ranks highest for –Obesity –Heart Disease –Diabetes –Infant Mortality Employers –Educated workforce –Access to healthcare

55. 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

56. Health  $$$ $32.9 Million Of LOST INCOME $144 Million in present value losses accumulate over 30 years

57. Understanding Your Local Economy Garen Evans