Final Report Economic Impact of Local Park and Recreation Agencies in Illinois. Submitted to: Illinois Association of Park Districts

Transcription

1 Final Report Economic Impact of Local Park and Recreation Agencies in Illinois Submitted to: Illinois Association of Park Districts Submitted by: Economics Research Associates March 25, 2005 ERA Project Number: E. Jackson Boulevard Suite 1200 Chicago IL FAX Los Angeles San Francisco San Diego New York Chicago Washington DC London

2 Table of Contents Executive Summary 1 Direct Economic Impacts 1 Multiplier Impacts 2 Cumulative Total 2 Methodology 3 Non-Economic Considerations 4 Caveats 5 Park Agency Economic Impacts 6 Direct Employment & Earnings 6 Direct Operational Spending 7 Capital/Construction Spending 8 Multiplier Impacts 9 Fiscal Benefits 11 Considerations 11 Park District Specific Economic Impacts 13 Direct Impacts 13 Multiplier Impacts 15 Fiscal Benefits 16 Assumptions 17 Regression Analysis 17 Other Calculations 17 Multiplier Impact Assumptions and Methodology 18 Appendix 19 Illinois Park Agencies 19 General Limiting Conditions 26 Economics Research Associates

3 Executive Summary Public parks and recreation is a $3-billion-dollar industry in Illinois. There are more than 350 park districts, forest preserve and conservation districts and municipal park and recreation agencies in Illinois. These organizations provide the people of Illinois with publicly funded parks, nature preserves, bike trails, soccer complexes and a host of other places to spend leisure time. In addition to the undeniable benefits these organizations provide to improve our quality of life, they also wield tremendous economic impact as an industry. Park districts, forest preserve and conservation districts and municipal park and recreation agencies represent a significant segment of business activity within the State of Illinois. Direct Economic Impacts Park districts, forest preserve and conservation districts and municipal park and recreation agencies in Illinois employ a total of approximately 62,900 persons each year. About 8,700 of these are full-time positions. The 54,200 part-time employees at park and recreation agencies in Illinois include many seasonal positions. Employed between May and August each year, many of these employees are high school and college age persons, which makes park and recreation agencies a major employer of young people in the state of Illinois. Park and recreation agency employees earn a total of $621.8 million in wages and full-time benefits, such as health insurance and retirement contributions, each year. Public park agencies generate demand for about $475.5 million in operational spending each year for services and products, such as wholesale and retail supplies, phone services, utilities, legal, auditing, architectural and planning services and contractual services. About 73 percent, or $347 million of park agency annual operational spending, is captured by Illinois businesses, suppliers, and contractors. Illinois park agencies generate a total of $371 million in capital investment for development and construction of new parks and recreational facilities, of which about $337 million was captured by in-state suppliers, of construction material and related equipment. Park agency capital spending supports about 4,000 construction jobs, many of which are union labor, with associated earnings of about $185 million. If current annual capital reinvestment levels are sustained over the next ten years, a total of about $3.4 billion would be reinvested in parks and recreation across the state. Illinois park agencies account for $16.7 million in state income taxes on direct earnings annually. The total direct economic impact generated by Illinois local public park and recreation agencies is $1.64 billion, including wages, operational spending, and capital spending. Economics Research Associates Page 1

4 Multiplier Impacts When taking into account the ripple effect across the state, about 26,200 full-time equivalent positions are supported by park and recreation agency spending, along with $795 million in earnings. Illinois park agency operational spending ($475 million) supports more than 9,700 indirect fulltime equivalent jobs and $316 million in earnings across the state. In-state construction investment supports an additional 5,900 jobs and $212.6 million in wages across the state. Almost $400 million in total earnings annually can be attributed to park agency capital spending. In total, direct park agency spending supports an additional 41,800 jobs and $1.32 billion in total earnings across the state of Illinois. Cumulative Total 60,340 full time equivalent direct and multiplier jobs are supported by park and recreation agencies. $3 billion in cumulative spending, earnings and other related economic activity, contributed to the statewide economy Economics Research Associates Page 2

5 Methodology ERA was engaged by the Illinois Association of Park Districts (IAPD) to estimate the economic and fiscal impact generated by park and recreation agency spending across the State of Illinois, covering: Park Districts Forest Preserve Districts Park and Recreation Departments Conservation Districts The approach analyzes key impacts, including: Full-time and part time jobs and wages Operational spending by park agencies Capital spending for construction projects, including jobs and wages supported The ripple / multiplier effect of direct spending on the state economy, including jobs and wages supported across the state Fiscal impacts, particularly income taxes on wages The impact on land values generated by proximity to parks and recreational facilities, parks, and open space Other benefits, including investment for land acquisition, the role of Special Recreation Associations, use of volunteers, and other related factors. This report first summarizes economic impacts for all park agencies, and then breaks out spending by park districts in a following section. Park district specific impacts were separated out for several reasons, including: Park Districts are largely an Illinois-specific institution, worthy of study Park Districts offer park services to a majority of Illinois residents ERA s approach aggregates economic activity by park and recreation agencies across two defined regions: Metro Chicago Covering a seven-county market around Chicago, including the counties of Cook, Lake, DuPage, Will, McHenry, Kendall, and Kane, covering 203 park agencies, including the Chicago Park District, as well as forest preserve districts in Cook, Lake and DuPage Counties. Downstate Covering a 95-county region across the State of Illinois with 146 park agencies, including Rockford, Peoria, Springfield, Bloomington-Normal, Champaign-Urbana, and Decatur. Estimates of the economic impact generated by park and recreation agencies were derived from a statistical approach that relied on key inputs, including: The annual IAPD membership survey, covering more than 20 questions sent to 331 member agencies around the state. The 2004 version of this survey was sent out in the spring of 2004, and generated 273 responses, representing 82% of the sample. The level of response at the metro Chicago and Downstate levels is considered to be highly representative. Economics Research Associates Page 3

6 A follow up survey administered by ERA that was sent to about 165 agencies around the state, with 110 responses, for a response rate of 67%. ERA s sample included a number of agencies that are currently not members of IAPD (City of Elgin Park Department, Lake Forest Park and Recreation Department, and Bloomington Parks and Recreation Department, for example). The follow up survey was used as a check against reported data in the IAPD member survey, and to help define the allocation of operational and capital spending generated by agencies. To boost participation, ERA made follow-up calls to every surveyed park agency; calls were also made to check reported survey results and inconsistencies. ERA s approach followed several basic steps, which are summarized below. The Approach section of this document highlights the approach in more specific detail: 1. ERA conducted a survey of park districts, park departments, forest preserves and conservation districts in the State of Illinois to complement information supplied from IAPD agency information. 2. ERA used primary data from the survey as well as derived numbers based on regression analysis of survey results to help determine the total amount of dollars spent in a number of areas, including wages/salaries (full-time and part-time / seasonal), operational expenses, debt service, and capital expenses. Regression was used in the following estimates when primary data was not available: a. The number of full-time employees was used as a base to estimate total full-time wages. b. Operating expenses were calculated based on a ratio of full-time wages to operating expenses from survey results. c. The number of part-time/seasonal employee wages was based on a ratio of full-time wages to PT/seasonal wages. 3. ERA used primary data from the survey to estimate the breakdown of operating expense line items, distribution of operating and capital expenses, and full-time benefits. The average/median calculations for these categories were used as a guide in preparing estimates. 4. The previously mentioned information was used to estimate the economic and fiscal impact generated by park and recreation agency spending across the state of Illinois using RIMS II multipliers provided by the U.S. Department of Commerce. Non-Economic Considerations Park agencies actively support / enable several distinct benefits that should be considered: Support for Special Recreation Associations, which provide access to recreation for those with disabilities Funding support for acquisition of land for parks and open space Agencies support and encourage volunteerism Economics Research Associates Page 4

7 Caveats The initial survey effort identified a key challenge with evaluating park agency spending for wages and operations, which is that park agencies use accounting systems with different capabilities and levels of flexibility. This had several impacts: Initially, ERA s approach was to distinguish between part-time and seasonal employment and wages; however, a significant segment of park agencies accounting systems could not distinguish between the two employee classifications. With regard to operational spending, ERA noted a surprising amount of variation in terminology and approaches to tracking operational spending. While ERA tested the survey questions and approach with metro Chicago and downstate park agency directors before it was sent out, a surprising number of questions emerged, which had to be managed through follow-up phone calls. Evaluation of capital budgets was challenging. A number of agencies included funding for new construction along with payments on existing debt in capital budgets, while other agencies only include new funding in capital, and show all debt service separately. As ERA s approach only looked at actual spending for construction (as opposed to the funding source for construction), considerable time was spent to ensure that only new spending was included. The reality that park departments and park districts have somewhat different accounting and budget approaches, making comparisons between types of agencies of limited value. Despite the lack of consistency in terminology, ERA was able to resolve major concerns through follow up conversations. Economics Research Associates Page 5

8 Park Agency Economic Impacts Direct economic impacts result from direct expenditures generated by park agencies around the state of Illinois. ERA focuses on employment and earnings as well as operating and capital expenses under direct impacts. This section estimates direct impacts for all park agencies (park districts, park departments, conservation districts, and forest preserves) surveyed. Direct Employment & Earnings ERA s approach begins with full and part time employment supported by park agencies. In general, the following job types can be associated with each category: Full-Time Positions: Including, but not limited to; park directors, business managers, superintendents of recreation, directors of golf, communications, etc. Part-Time Positions: Including, but not limited to; program instructors and seasonal summer positions for camp counselors, lifeguards, park groundskeepers, etc. The approach identified a total impact of 62,900 full and part-time jobs supported by park agencies across the state, along with an estimate of about $553.2 million in total earnings. Looking first at full-time employment, ERA estimates, through surveys and regression analysis, that there are approximately 8,700 full-time jobs created by Illinois park agencies that support over $330 million in earnings. About 80 percent of full-time jobs are supported by Chicago metro-area park agencies. The average wage per employee is over $38,000. The following table summarizes theses impacts. Table 1. Estimated Full-Time Employment & Earnings Category Jobs Wages Metro Aggregate 7,200 $277,750,000 Downstate Aggregate 1,500 $53,500,000 Total 8,700 $331,250,000 The following table shows that estimated benefits for full-time employees total almost $70 million, which amounts to a little over $10,000 per employee. The estimate of benefits was developed from ERA s survey process, which provided an estimate of total benefits as a percentage of earnings for full-time employees. Importantly, as a number of park agencies were unable to provide separate breakdowns of benefits for seasonal and part-time employment, ERA was not able to develop an accurate estimate of part-time/seasonal benefits. As the majority of part-time employment is of a seasonal nature, related benefits paid would be very limited across the state. Table 2. Estimated Benefits, Full-Time Employees Category Total Benefits Metro Aggregate $55,600,000 Downstate Aggregate $13,030,000 Total $68,630,000 Note: Data includes full-time employees only There are over 54,000 part-time / seasonal jobs supported by park agencies across the state of Illinois, generating almost $222 million in earnings. About 80% of part-time / seasonal positions are located in Economics Research Associates Page 6

9 the metro area. These 80% of jobs account for 85% of earnings in this category. The average wage per employee is a little over $4,000. The following table summarizes these estimates. ERA s approach converts the part-time / seasonal positions into full-time equivalent (FTE) positions, using average wage benchmarks ($38,600 and $35,700 average full-time wage for metro and downstate park agencies). From a FTE basis, the 54,000 part time positions would equate to over 5,800 FTE positions. Table 3. Estimated Part-Time/Seasonal Employment & Earnings Category Jobs Wages Metro Aggregate 43,400 $188,870,000 Downstate Aggregate 10,800 $33,090,000 Total 54,200 $221,960,000 Note: In considering the above employment impacts, it is likely that a small percentage of people employed at park agencies reside in other states adjacent to Illinois. Direct Operational Spending Using data collected from ERA s follow-up survey of park agencies, total operational spending was allocated into seven sub-categories, which include: Professional Services Including legal, planning, consulting, audit, accounting, architecture, and related services Contractual Services - Covering a broad range, from administrative & support to maintenance, security, waste removal, pest management, and related services Wholesale and Retail Supplies Includes a wide range of supply purchases, from office equipment to fertilizer, sports equipment, food, petroleum, and similar items. Telecommunications Includes all phone and data services Utilities Natural gas, electricity, and related Other spending Covers a large array of items that did not precisely fit ERA s categories. The survey approach was used to separate in-state spending from total spending. Based on the survey responses, ERA determined that about 73% of total spending is captured by in-state suppliers. The following table shows that Illinois park agencies generate a combined total of over $475 million in operational spending paid to in-state suppliers. Table 4. Estimated In-State Operating Expenses by Line Item Line Item Metro Aggregate Downstate Aggregate Total Professional $34,360,000 $8,220,000 $42,580,000 Contractual Services $84,080,000 $6,270,000 $90,350,000 Wholesale Supplies $76,938,000 $15,636,000 $92,574,000 Retail Supplies $51,292,000 $10,424,000 $61,716,000 Telecoms $9,950,000 $1,850,000 $11,800,000 Utilities $48,720,000 $8,060,000 $56,780,000 Other $104,900,000 $14,860,000 $119,760,000 Total Op. Exp. $410,240,000 $65,320,000 $475,560,000 Note: Other expenditures includes items that did not precisely fit into ERA s categories Resulting industry aggregations shown in the above table were driven by the nature of park agency survey responses. ERA notes that due to surprising variation in accounting systems, all park agencies did not Economics Research Associates Page 7

10 have the same ability to break out spending in specified categories; as a result, expenditures that did not easily fit into noted categories were included in the other category. Agency Budget Structure ERA also looked at the breakdown of financial support for park agencies, evaluating the percentage of agency operating-budget financial support that is provided by fees, grants, and property taxes. The following table summarizes this analysis for select agency types. Table 5. Estimated In-State Operating Budget Support 1/ Category Fees Grants Property Taxes Metro Park Districts 43% 2% 52% Down State Park Districts 41% 4% 55% Conserv / Forest Preserve Dist. Total 14% 2% 85% Park Departments 46% 2% 52% 1/ Figures do not add up to 100% because not all responses added up to 100% In evaluating this table, the reader should note that operating / accounting approaches for districts and park departments are not entirely consistent. Also, a majority of conservation districts and forest preserve districts are not operated on a fee recovery basis, which is why it appears that property taxes are a major operations source, shown above with property tax support at up to 85% across all forest preserve / conservation districts. The above table shows that park departments appear slightly less dependent on property taxes compared to other agencies. Capital/Construction Spending The following table summarizes ERA s estimate of total capital spending for construction generated by park agencies in fiscal year 2003 / 2004, along with an estimate of the share of total construction investment that was captured by in-state suppliers. ERA estimates that Illinois park agencies generated a total of $371 million in capital spending for construction, of which about $337 million was captured by in-state suppliers. Over 80 percent of capital expenditures are attributed to the Chicago metro area. Table 6. Estimated Annual Total Capital Spending Category Total Capital Spending In-State Capital Spending Metro Aggregate $305,890,000 $277,220,000 Downstate Aggregate $65,340,000 $59,650,000 Total $371,230,000 $336,870,000 Survey responses indicated that construction projects across park agencies varied, with emphasis on new aquatics / waterpark facilities, new community centers, and repair / renovation support for existing parks. ERA took the capital spending estimates one step further, breaking down capital spending further into estimates for construction labor and construction materials (which covers everything from drywall to wiring, and installed capital equipment). Based on experience with construction projects, ERA assumed that 55% of this spending goes towards labor and the remainder towards materials. Construction employment (FTE) was based on average construction wages for the State of Illinois provided by the Bureau of Labor and Statistics. The following table indicates that an estimated 4,000 jobs across the state of Illinois are directly supported by capital expenditures, while over $150 million is spent on materials provided by in-state suppliers, for a total of $366 million in in-state investment. Economics Research Associates Page 8

11 Table 7. Allocation of Annual Capital Spending Category Construction Labor Construction Jobs (FTE) Construction Materials Total In-State Investment Metro Aggregate $152,471,000 3,315 $124,749,000 $277,220,000 Downstate Aggregate $32,807, $26,842,500 $59,650,000 Total $185,278,500 4,028 $151,591,500 $336,870,000 Multiplier Impacts The aforementioned direct impacts generated by park agency operational and capital expenditures support additional jobs and wages across the state, otherwise known as indirect, ripple or multiplier economic impacts. While somewhat more difficult to quantify than the direct jobs, wages, and purchases previously defined, the indirect impacts are just as real and important. Park agency employees spend their income across Illinois for homes, food, cars, merchandise, entertainment, etc. The local businesses and their employees that provide ongoing services and material to park programs will do the same. Construction projects funded by Park agencies also create multiplier impacts. This increased economic activity will generate a range of new jobs and wages throughout the area (i.e. business expansion, housing, retail, services, etc.). As a result, wages that park programs support are spent and re-spent in the local economy, gradually evolving out of the region to outside suppliers, taxing entities, etc. Depending upon the size of the local market, the U.S. Department of Commerce provides estimates as to what direct wages and purchases will generate in subsequent multiplier impacts in the local economy. The appendix includes a more extensive discussion of the multiplier approach for this study. Ripple Effect of Direct Employment The following table summarizes total indirect full-time and part-time / seasonal jobs supported by park agency employment across Illinois. The estimates are provided in terms of full-time equivalent (FTE) positions, in order to make comparisons between full-time and part-time positions meaningful. The table highlights an overall impact of 26,200 positions supported across the state, with a total impact (direct and indirect) of over 40,000 FTE jobs. Table 8. Multiplier Employment (FTE) Category Direct Jobs (FTE) Indirect Jobs (FTE) Total Impact Metro Aggregate 12,100 21,900 34,000 Downstate Aggregate 2,400 4,300 6,700 Total 14,500 26,200 40,700 The following table summarizes total direct and indirect earnings for all park agencies, highlighting a cumulative impact of about $1.3 billion in total wages supported across the state, of which almost $800 million is attributed to indirect wages, supported across the state by park agency employees. Economics Research Associates Page 9

12 Table 9. Multiplier Earnings Category Direct Wages Indirect Wages Total Impact Metro Aggregate $466,620,000 $670,160,000 $1,136,780,000 Downstate Aggregate $86,590,000 $124,360,000 $210,950,000 Total $553,210,000 $794,520,000 $1,347,730,000 Ripple Effect of Operational Spending ERA research indicates that Illinois park agencies support a combined total of over $475 million in direct operating expenses, captured by in-state suppliers in professional and contractual services, retail and wholesale supplies, utilities, telecommunications, and other. Using a multiplier approach, ERA estimated that these operational expenses support over 9,700 indirect FTE jobs and $316 million in earnings across the state. Capital / Construction Spending Impacts ERA estimated annual in-state total capital expenditure breakdowns for labor and materials, and calculated direct and indirect job impacts after estimating direct jobs from new construction based on average wage data provided by the Bureau of Labor Statistics (BLS) and direct earnings estimates. The following table indicates that almost 10,000 total jobs are derived from in-state construction investment, with almost 6,000 short-term positions supported across the state by direct construction employment. Table 10. Annual Multiplier Employment Impact From In-State Construction Investment Category Direct Jobs Indirect Jobs Total Jobs Metro Aggregate 3,310 4,870 8,180 Downstate Aggregate 710 1,050 1,760 Total 4,020 5,920 9,940 Similar estimates were created for direct and indirect earnings attributed to construction. Almost $400 million in total earnings annually can be attributed to capital spending, of which about $212 million is supported across the state by direct construction employment. Table 11. Annual Multiplier Earnings Impact From In-State Construction Investment Category Direct Earnings Indirect Earnings Total Earnings Metro Aggregate $152,470,000 $174,940,000 $327,410,000 Downstate Aggregate $32,810,000 $37,650,000 $70,460,000 Total $185,280,000 $212,590,000 $397,870,000 Economics Research Associates Page 10

13 Fiscal Benefits Fiscal impacts typically include state and local government taxes, fees and intergovernmental agreements. For this analysis, ERA estimated income tax revenues for direct FT and PT/Seasonal jobs. Total income tax revenues are almost $17 million, of which 60 percent are attributed to FT jobs and almost 85 percent are attributed to the Chicago metro area. Table 12. State Income Tax Revenues - FT and PT/Seasonal Category Full-Time PT/Seasonal Total Income Tax Revenues Metro Aggregate $8,410,000 $5,700,000 $14,110,000 Downstate Aggregate $1,610,000 $990,000 $2,600,000 Total $10,020,000 $6,690,000 $16,710,000 Considerations In completing the study, the approach identified a number of specific elements for related discussion, relating to spending on land acquisition, function of Special Recreation Associations, and park agency accounting practices, which had a notable impact on this study. Spending for Land Acquisition One primary role of park agencies is to acquire land for development of parks and open space. In Illinois, conservation districts, park districts, park departments, and forest preserve districts all acquire land at different times, based on need and funding support. Although not part of ERA s initial scope, ERA did conduct follow up interviews with directors of Forest Preserve Districts. The conversations did not yield a significant statewide level of spending for land acquisition in 2003/2003, with the exception of the Lake County Forest Preserve District, which invested a reported $12 million for land acquisition in that period. Special Recreation Associations Illinois is a national leader in funding for parks and recreation. As one outgrowth of this, state legislators saw fit to encourage local park agencies to develop cooperative programs to support recreation for people with disabilities. Across Illinois, there are a total of 27 Special Recreation Associations (SRA s). Although outside the scope of the initial study, ERA extended surveys to these groups to ascertain their incremental value to the state as a whole. Based on initial responses, ERA notes the following potential direct economic benefits associated with SRA s: About 65 percent of SRA operating budgets are derived from their member park districts. The balance comes from a variety of sources, including program fees and donations SRA s account for about 215 full-time jobs across the state They contribute about $8.5 million in wages and $1.8 million in benefits SRA s employ about 2,700 part-time and seasonal positions, who earn about $5.3 million in wages Given the limited survey response, it is difficult to extend impacts further, given that SRA s are funded by member agencies, and as such, a portion of their operational spending is captured elsewhere in this report. Economics Research Associates Page 11

14 Volunteerism During the survey process, ERA was asked to consider the extent of park agency use of volunteers. Although not part of the initial survey instrument, ERA made follow-up calls to several park agencies to ascertain volunteer commitments. Results varied widely as to the use of volunteers and hours committed. While volunteerism is clearly important to many park agencies, the specific economic benefits of volunteers are more difficult to quantify within the context of this report. Accounting Practices The initial survey effort identified a key challenge with evaluating park agency spending for wages and operations, which is that park agencies use accounting systems with different capabilities and levels of flexibility. This had several impacts: Initially the approach would have distinguished between part-time and seasonal employment and wages; however, a majority of smaller park agencies accounting systems could not reportedly distinguish between the two types. For this reason, part-time and seasonal employment was combined. With regard to operational spending, ERA noted a surprising amount of variation in terminology and approaches to tracking operational spending. And while ERA tested the survey questions and approach with metro Chicago and downstate park agency directors before it was sent out, a surprising number of questions emerged, which had to be managed through follow-up phone calls. Capital budgets in particular were a challenge. A number of agencies included funding for new construction along with payments on existing debt in capital budgets, while other agencies only include new funding in capital, and show all debt service in a different area. As ERA s approach only looked at actual spending for construction (as opposed to the funding source for construction), considerable time was spent to ensure that only actual spending was included. The reality that park departments and park districts have somewhat different accounting and budget approaches, making comparisons between types of agencies of limited value. Despite the lack of consistency in terminology, ERA was able to resolve major concerns through follow up conversations. Economics Research Associates Page 12

15 Park District Specific Economic Impacts As noted in the introduction, ERA assessed park district specific spending and economic impacts as a subset of overall park agency economic activity. Direct Impacts ERA estimated employment and earnings as well as operating and capital expenses under direct impacts for park districts only as well as all agencies combined. This section estimates direct impacts for Park Districts only. Employment & Earnings ERA estimated that FT park district employment accounts for over 80 percent of total park agency FT jobs and represents about 75 percent of FT earnings. The average wage per park district employee is over $36,000. Table 13. Estimated FT Employment & Earnings Category Jobs Wages Metro Park Districts Only 5,600 $207,880,000 Downstate Park Districts Only 1,200 $40,890,000 Total Park Districts 6,800 $248,770,000 The following table indicates that an estimated $50 million is spent on benefits (for FT employees only), which is about $7,300 per park district employee. Table 14. Estimated Benefits - FT Only, Park Districts Total Benefits Category (FT only) Metro Park Districts Only $39,510,000 Downstate Park Districts Only $10,220,000 Total Park Districts $49,730,000 PT / Seasonal employment for park districts represents almost 80 percent of all park agency PT/Seasonal employment. Average wage per employee is a little over $4,100. The estimated 47,500 PT / Seasonal jobs shown in the table below are equivalent to 5,330 FTE positions. Table 15. Estimated Part-Time/Seasonal Employment and Earnings, Park Districts Category Jobs Wages Metro Park Districts Only 38,400 $167,760,000 Downstate Park Districts Only 9,100 $27,620,000 Total Park Districts 47,500 $195,380,000 Economics Research Associates Page 13

16 Operational Spending ERA estimated total estimated in-state operating expense for park districts of about $366 million, which are shown in the following table. Metro park districts accounted for about 85% of these expenses, or about $313 million. Table 16. Estimated In-State Operating Expenses by Line Item, Park Districts Line Item Metro Aggregate Downstate Aggregate Metro Park Districts Only Professional $18,560,000 $6,860,000 $25,420,000 Contractual Services $67,230,000 $3,920,000 $71,150,000 Wholesale Supplies $57,534,000 $12,306,000 $69,840,000 Retail Supplies $38,356,000 $8,204,000 $46,560,000 Telecoms $7,690,000 $1,540,000 $9,230,000 Utilities $37,830,000 $6,770,000 $44,600,000 Other $85,880,000 $13,320,000 $99,200,000 Total Op. Exp. $313,080,000 $52,920,000 $366,000,000 Budgetary Support ERA surveyed park districts to determine the composition of their financial operational support and found that on average, a little over half of agencies budgets are supported by property taxes, and a little over 40 percent by fees. Within the averages, ERA noted that larger park districts in particular are more dependent on fees to sustain operating budgets. Table 17. Estimated In-State Operating Budget Supported by Fees, Grants, Property Taxes - Park Districts Category Fees Grants Property Taxes Metro Park Districts Only 43% 3% 55% Downstate Park Districts Only 41% 4% 55% Capita/Construction Spending Total capital/construction spending for park districts amounts to over $300 million, of which about 90% is in-state spending. A little over 80 percent of capital spending is from metro area park districts. Table 18. Estimated Total Capital Spending, Park Districts Category Total Capital Spending In-State Capital Spending Metro Park Districts Only $251,790,000 $228,140,000 Downstate Park Districts Only $54,660,000 $49,890,000 Total Park Districts $306,450,000 $278,030,000 Of total in-state capital spending, about $153 million is attributed to labor an equivalent of about 3,300 jobs (using average construction wage estimates of $46,000 provided by the Bureau of Labor Statistics for the State of Illinois). Economics Research Associates Page 14

17 Table 19. Allocation of In-State Capital Spending, Park Districts Construction Labor Construction Jobs (FTE) Construction Materials Total In-State Investment Category Metro Park Districts Only $125,477,000 2,728 $102,663,000 $228,140,000 Downstate Park Districts Only $27,439, $22,450,500 $49,890,000 Total Park Districts $152,916,500 3,324 $125,113,500 $278,030,000 Multiplier Impacts The following section summarizes the economic ripple effects generated by park district spending across the state, covering jobs and wages supported by operational employment, spending, and capital investment. Jobs and Wages Total job impacts for FT and FTE (the full-time equivalent for PT / Seasonal) are estimated to be 34,000 jobs for park districts. Indirect jobs comprise almost 22,000 of these jobs. Metro area jobs account for over 80 percent of total park district job impacts. Table 20. Multiplier Employment (FTE), Park Districts Category Direct Jobs (FTE) Indirect Jobs (FTE) Total Impact Metro Park Districts Only 10,100 18,300 28,400 Downstate Park Districts Only 2,000 3,600 5,600 Total Park Districts 12,100 21,900 34,000 Total earnings impacts (for Full-Time and Part-Time / Seasonal combined) add up to over $1 billion, of which over $637,000 are from indirect wages, supported across the state by tax-paying employees. Table 21. Multiplier Earnings (FTE), Park Districts Category Direct Wages Indirect Wages Total Impact Metro Park Districts Only $375,640,000 $539,490,000 $915,130,000 Downstate Park Districts Only $68,510,000 $98,390,000 $166,900,000 Total Park Districts $444,150,000 $637,880,000 $1,082,030,000 Operational Spending Operational spending by park districts is estimated to generate about 7,500 additional jobs from park district operations, accounting for over 75 percent of indirect operational impacts for all park agencies. Earnings from indirect operational spending impacts accounts for about $242 million. Economics Research Associates Page 15

18 Capital Spending Capital spending generates almost 5,000 indirect jobs from park district operations. Total job impacts for park district capital spending is 8,200 jobs. Table 22. Multiplier Employment Impact from In-State Construction Investment Category Direct Jobs Indirect Jobs Total Jobs Metro Park Districts Only 2,730 4,020 6,750 Downstate Park Districts Only ,480 Total Park Districts 3,330 4,900 8,230 Capital spending generates almost $330 million in total earnings, of which about $175 million are indirect impacts. Table 23. Multiplier Earnings Impact from In-State Construction Investment Category Direct Earnings Indirect Earnings Total Earnings Metro Park Districts Only $125,480,000 $143,980,000 $269,460,000 Downstate Park Districts Only $27,440,000 $31,480,000 $58,920,000 Total Park Districts $152,920,000 $175,460,000 $328,380,000 Fiscal Benefits Again, income tax revenue estimates were estimated, this time for park districts only. These estimates for direct job impacts only, account for over $13 million in income tax revenues. Of these revenues, over 55 percent are attributed to FT employees and almost 85 percent are attributed to the Chicago metro area. Table 24. Income Tax Revenues - FT and PT/Seasonal, Park Districts Category Tax Revenues Tax Revenues Total Income Full-Time - PT / Seasonal Tax Revenues Metro Park Districts Only $6,240,000 $5,030,000 $11,270,000 Downstate Park Districts Only $1,230,000 $830,000 $2,060,000 Total Park Districts $7,470,000 $5,860,000 $13,330,000 Economics Research Associates Page 16

19 Assumptions Regression Analysis ERA used regression analysis based on IAPD data as well as analysis of primary data obtained from an ERA survey of over 100 Park agencies to calculate impacts on the State. The basis of all regression equations is the number of full-time employees, since this information was available for almost every agency from either the IAPD data or ERA survey results. If primary data was available for an agency (i.e. operating expenses, capital expenses, etc.) this data is used in the analysis. For all other agencies, ERA used regression analysis to form equations to use in calculating select impacts. ERA first determined the significance of relationships between categories that would be used to project the aforementioned impacts. Using regression analysis, ERA determined the relationship between: The number of full-time (FT) employees and total FT wages. This relationship was, as intuitively suggested, strong. Statistical calculations analyzed include the following: The r-square value, which is the amount of variation in the dependent variable (in this case, total FT wages) that is explained by the variation in the independent variable (the number of FT employees) was high (greater than 0.90) for all agency categories tested. T-stat: After an estimation of a coefficient (total FT Wages), the t-statistic for that coefficient is the ratio of the coefficient to its standard error. In all categories, this number was significantly higher than The P-Value is "the probability, if the test statistic really were distributed as it would be under the null hypothesis, of observing a test statistic [as extreme as, or more extreme than] the one actually observed." Essentially, the smaller the P value, the more strongly the test confirms the null hypothesis. So a P-value of 0.05 or less confirms the null hypothesis "at the 5% level" that is, the statistical assumptions used imply that only 5% of the time would the supposed statistical process produce a finding this extreme if the null hypothesis were false. In all cases for this category, the P-value was well under FT wages to operating expenses. This relationship was relatively strong overall: R-squares were at 0.80 or greater. In all categories, this number was significantly higher than In all categories, the P-value was well under FT wages to PT/Seasonal wages. This relationship was similar to r-square correlations as the FT wages to operating expenses: R-squares were at 0.80 or greater. In all categories, this number was significantly higher than In all categories, the P-value was well under Other Calculations For other calculations where numbers were not derived from regression equations (i.e. budget allocation by select line items, percent of in-state spending, full-time benefits, capital expenses, operating expenses supported by fees, grants, property taxes), ERA calculated the median and mean within each category from ERA s survey results and applied figures using these two figures as a guide to estimate these categories. Economics Research Associates Page 17

20 Multiplier Impact Assumptions and Methodology ERA and other persons interested in the total impact of different types of projects (large scale economic development projects, base closings, etc.) utilize multiplier impact estimates to gauge the total effect of spending and employment from a project within a defined regional area. It is appreciated that not all spending and wages are captured within the immediate local areas and that as spending and wages ripple through the local economy, there is a proportional decrease in its impact as dollars leak out to other jurisdictions. The use of multipliers provides an estimate as to the complete impact from operational spending as well as capital expenditures, focusing on the share of direct spending that is captured by the local economy, which in this case is the State of Illinois. Indirect state impacts, created by new construction and the annual operation of the various park facilities, reflect the re-spending effect of direct employees in the local economy. These direct and indirect impacts ripple through the state economy, resulting in indirect jobs and wages in other industry sectors, which could include retail sales, hospitality, services, and other sectors. The extent of re-spending within an economy is generally calculated with economic multipliers, which reflect the extent of interdependence between industries in a region. If local firms are more interdependent, they buy a larger share of goods and services from each other, minimizing leakage (or spending outside the region) to other states in the country, resulting in a higher multiplier and relatively greater indirect impacts. For example, flour milling industry in Illinois has a direct effect jobs multiplier of over 6.5. ERA utilized RIMS II input-output multipliers for wages and employment generated for the State of Illinois by the US Department of Commerce, Bureau of Economic Analysis. Economics Research Associates Page 18

21 Appendix Illinois Park Agencies Table 25. Illinois Park Agencies Agency COUNTY Market Type of Agency 1/ Mc Henry County Conservation District McHenry Metro Chicago CD Cook County Forest Preserve Cook Metro Chicago FP Du Page Co., Forest Preserve Dist. Of Du Page Metro Chicago FP Kane Co. Forest Preserve Commission Kane Metro Chicago FP Kendall County Forest Preserve District Kendall Metro Chicago FP Lake County Forest Preserve District of Lake Metro Chicago FP Will County, Forest Preserve District of Will Metro Chicago FP Antioch Parks and Recreation Department Lake Metro Chicago Park Dpt Berwyn Recreation Department Cook Metro Chicago Park Dpt Brookfield Playground and Recreation Department Cook Metro Chicago Park Dpt City of Elgin Park Dept Kane Metro Chicago Park Dpt City of McHenry McHenry Metro Chicago Park Dpt Countryside Recreation Cook Metro Chicago Park Dpt Elmwood Park, Village of Cook Metro Chicago Park Dpt Evanston Park Department Cook Metro Chicago Park Dpt Evergreen Park Recreation Department Cook Metro Chicago Park Dpt Glendale Heights Park and Recreation Department Du Page Metro Chicago Park Dpt Hinsdale Park and Recreation Department Du Page Metro Chicago Park Dpt Lake Forest Park and Rec Department Lake Metro Chicago Park Dpt Lake in the Hills Parks & Recreation Department McHenry Metro Chicago Park Dpt Lincolnwood Park and Recreation Department Cook Metro Chicago Park Dpt Matteson Parks and Recreation Department Cook Metro Chicago Park Dpt North Riverside Recreation Department Cook Metro Chicago Park Dpt Orland Hills Recreation Department Cook Metro Chicago Park Dpt Orland Park Recreation and Parks Department Cook Metro Chicago Park Dpt Palos Heights Parks & Recreation Cook Metro Chicago Park Dpt Palos Hills Community Resources & Recreation Cook Metro Chicago Park Dpt Park Forest Park Department Cook, Will Metro Chicago Park Dpt Richton Park Parks and Recreation Department Cook Metro Chicago Park Dpt Riverside Parks and Recreation Cook Metro Chicago Park Dpt Romeoville Recreation Department Will Metro Chicago Park Dpt Shorewood Park and Recreation Committee Will Metro Chicago Park Dpt South Holland Parks and Recreation Department Cook Metro Chicago Park Dpt Thornton Recreation Department Cook Metro Chicago Park Dpt University Park Park and Recreation Department Will Metro Chicago Park Dpt Vernon Township Lake Metro Chicago Park Dpt Warren Township Lake Metro Chicago Park Dpt Wayne Park Commission Du Page Metro Chicago Park Dpt Western Springs Recreation Department Cook Metro Chicago Park Dpt Woodstock Recreation and Parks Department McHenry Metro Chicago Park Dpt 53 Trails Estates Park District Du Page Metro Chicago PD Addison Park District Du Page Metro Chicago PD Alsip Park District Cook Metro Chicago PD Arlington Heights Park District Cook Metro Chicago PD Barrington Countryside Park District Lake Metro Chicago PD Barrington Park District Lake Metro Chicago PD Economics Research Associates Page 19

22 Agency COUNTY Market Type of Agency 1/ Bartlett Park District Du Page Metro Chicago PD Batavia Park District Kane Metro Chicago PD Bedford Park Park District Cook Metro Chicago PD Bensenville Park District Du Page Metro Chicago PD Berwyn Park District Cook Metro Chicago PD Big Rock Park District Kane Metro Chicago PD Bloomingdale Park District Du Page Metro Chicago PD Blue Island Park District Cook Metro Chicago PD Bolingbrook Park District Will Metro Chicago PD Braidwood Park District Will Metro Chicago PD Bridgeview Park District Cook Metro Chicago PD Broadview Park District Cook Metro Chicago PD Brookeridge Park District Du Page Metro Chicago PD Buffalo Grove Park District Cook, Lake Metro Chicago PD Burbank Park District Cook Metro Chicago PD Burr Ridge Park District Du Page Metro Chicago PD Butterfield Park District Du Page Metro Chicago PD Calumet Memorial Park District Cook Metro Chicago PD Carol Stream Park District Du Page Metro Chicago PD Cary Park District McHenry Metro Chicago PD Central Stickney Park District Cook Metro Chicago PD Channahon Park District Will Metro Chicago PD Chicago Heights Park District Cook Metro Chicago PD Chicago Park District Cook Metro Chicago PD Chicago Ridge Park District Cook Metro Chicago PD Clarendon Hills Park District Du Page Metro Chicago PD Clyde Park District of Cicero Cook Metro Chicago PD Community Park Dist. of La Grange Park Cook Metro Chicago PD Country Club Hills Park District Cook Metro Chicago PD Crete Park District Will Metro Chicago PD Crystal Lake Park District McHenry Metro Chicago PD Darien Park District Du Page Metro Chicago PD Deerfield Park District Lake, Cook Metro Chicago PD Des Plaines Park District Cook Metro Chicago PD Dolton Park District Cook Metro Chicago PD Downers Grove Park District Du Page Metro Chicago PD Dundee Township Park District Kane Metro Chicago PD Elk Grove Park District Cook Metro Chicago PD Elmhurst Park District Du Page Metro Chicago PD Forest Park, Park District of Cook Metro Chicago PD Forest View Park District Cook Metro Chicago PD Foss Park District Lake Metro Chicago PD Fox Valley Park District Kane, Du Page, Will Metro Chicago PD Frankfort Park District Will Metro Chicago PD Frankfort Square Park District Will Metro Chicago PD Geneva Park District Kane Metro Chicago PD Glen Ellyn Countryside Park District Du Page Metro Chicago PD Glen Ellyn Park District Du Page Metro Chicago PD Glencoe Park District Cook Metro Chicago PD Glenview Park District Cook Metro Chicago PD Godley Park District Will, Grundy Metro Chicago PD Golf Maine Park District Cook Metro Chicago PD Economics Research Associates Page 20

23 Agency COUNTY Market Type of Agency 1/ Golfview Hills Park District Du Page Metro Chicago PD Grandwood Park District Lake Metro Chicago PD Grayslake Community Park District Lake Metro Chicago PD Gurnee Park District Lake Metro Chicago PD Hampshire Park District Kane Metro Chicago PD Hanover Park Park District Cook, Du Page Metro Chicago PD Harvey Park District Cook Metro Chicago PD Hawthorne Park District Cook Metro Chicago PD Hazel Crest Park District Cook Metro Chicago PD Hickory Hills Park District Cook Metro Chicago PD Highland Park, Park District of Lake Metro Chicago PD Hodgkins Park District Cook Metro Chicago PD Hoffman Estates Park District Cook Metro Chicago PD Homewood-Flossmoor Park District Cook Metro Chicago PD Huntley Park District McHenry, Kane Metro Chicago PD Inverness Park District Cook Metro Chicago PD Itasca Park District Du Page Metro Chicago PD Ivanhoe Park District Cook Metro Chicago PD Joliet Park District Will Metro Chicago PD Justice Park District Cook Metro Chicago PD La Grange, Park District of Cook Metro Chicago PD Lake Bluff Park District Lake Metro Chicago PD Lan-Oak Park District Cook Metro Chicago PD Lemont Park District Cook, DuPage, Will Metro Chicago PD Lighthouse Park District of Evanston Cook Metro Chicago PD Lindenhurst Park District Lake Metro Chicago PD Lisle Park District Du Page Metro Chicago PD Lockport Township Park District Will Metro Chicago PD Lombard Park District Du Page Metro Chicago PD Long Grove Park District Lake Metro Chicago PD Manhattan Park District Will Metro Chicago PD Markham Park District Cook Metro Chicago PD Maywood Park District Cook Metro Chicago PD Mc Cook Park District Cook Metro Chicago PD Medinah Park District Du Page Metro Chicago PD Memorial Park District Cook Metro Chicago PD Midlothian Park District Cook Metro Chicago PD Mokena Community Park District Will, Cook Metro Chicago PD Morton Grove Park District Cook Metro Chicago PD Mt. Prospect Park District Cook Metro Chicago PD Mundelein Park and Recreation District Lake Metro Chicago PD Naperville Park District Du Page Metro Chicago PD New Lenox Community Park District Will Metro Chicago PD Niles Park District Cook Metro Chicago PD Norridge Park District Cook Metro Chicago PD North Berwyn Park District Cook Metro Chicago PD Northbrook Park District Cook Metro Chicago PD Northfield Park District Cook Metro Chicago PD Oak Brook Park District Du Page Metro Chicago PD Oak Forest Park District Cook Metro Chicago PD Oak Lawn Park District Cook Metro Chicago PD Oak Park, Park District of Cook Metro Chicago PD Economics Research Associates Page 21