As local government officials and other stakeholders increasingly take a critical approach to proposed projects, organizations are seeking more effective ways to share their stories. One such strategy is to use an Economic Impact Assessment (EIA) to demonstrate the positive effects a project has on the local economy. For some socioeconomic analyses, a qualitative discussion of the types of benefits a project will generate, along with projected employment figures and tax revenue estimates, can suffice. Other projects, however, can create significant economic benefits that may not be well understood by local government and other key stakeholders. An economic impact study solves this problem by quantifying economic benefits that are anticipated to occur in a given area, such as a county or state.
EIAs rely on publicly available economic impact models to generate estimates of output, employment, income, and tax impacts. The economic impact models use financial and economic data gathered by the US Census Bureau, the US Bureau of Labor Statistics, the US Bureau of Economic Analysis and others to capture consumer and business spending patterns and the inter-relationships between industries. The model’s economic multipliers can quantify the influence of a project’s construction or a facility’s operation and the subsequent rounds of economic activity. The use of an economic impact model allows the economic effects associated with the construction and operation activities to be evaluated objectively using a standardized approach based on reliable data and methodology developed by economists over time.
Some examples of TRC’s work in this arena are summarized below. TRC recently used IMPLAN, a model that is most commonly used to capture the impacts of new or ongoing facilities, to model the impacts of a proposed warehouse complex on a brownfield site in Tacoma, Washington. TRC is using IMPLAN to evaluate the economic impacts associated with a quarry and asphalt plant in Massachusetts. In addition, TRC uses the National Renewable Energy Laboratory (NREL) Jobs and Economic Development Impact (JEDI) solar voltaic and wind energy models for renewable energy projects in New York.
EIAs May Be Performed For a Variety of Reasons
- EIAs can serve an important role in sharing the story of the project’s economic benefits to the community. Our clients have used the results of EIAs to provide public officials with quantified effects of a project in terms of direct, indirect and induced local jobs and income. EIA results are also often shared at public meetings to provide stakeholders with an understanding of local benefits.
- Socioeconomic analyses for National Environmental Policy Act (NEPA) documents are often largely qualitative, with only limited data provided on employment, local spending and anticipated tax revenues. However, for more complex projects, such as the CSX Howard Street Tunnel project and the federal actions associated with the Obama Presidential Center, an EIA provides much needed context to the Environmental Assessment (EA). Such projects can have significant short term construction impacts, as well as long term operational impacts.
- Increasingly, states and local jurisdictions are requiring socioeconomic analyses. As with NEPA documents, these analyses are often qualitative. However, we are beginning to see requirements for EIAs.
- Property tax abatement or special property tax considerations, such as payments in lieu of taxes (PILOT), can be supported through the use of EIAs. By quantifying the economic benefits associated with a project, a local jurisdiction can better understand the trade-offs from offering a property tax abatement/PILOT.
How Can TRC Help?
TRC has staff experienced in performing EIAs for a variety of projects across the United States. Our experience includes communicating the results of EIAs via NEPA documents, permitting documents and stakeholder-focused fact sheets. TRC’s subject matter expert in EIAs is available to assist with any evaluation of economic impacts across the country.
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