Northeast Region Baseline Report

Transcription

1 1 Northeast Region Baseline Report Report R April 2009 Amy Lake Sara Alva Lizarraga Dennis Robinson Tom Johnson 215 Middlebush Hall University of Missouri Columbia, Missouri

2 For more information about the Northeast Region and its economic development initiatives, please contact: Darla Campbell Agri Business Specialist and County Program Director Schuyler County, Northeast Region Schuyler County University of Missouri Extension Center or For questions about the information provided in this report, please contact: Amy Lake, Extension Associate Community Policy Analysis Center, University of Missouri-Columbia 230 Middlebush Hall / Columbia MO / or lakea@missouri.edu For a copy of the full report: 2

3 Table of Contents Table of Contents... 3 Acknowledgements... 4 Executive Summary... 5 Note: How to Use This Report in an Uncertain Economic Time... 6 Project Overview Socio-Demographic Characteristics Population Age Workforce Characteristics Employment (Full- and Part-time jobs) Number of Unemployed Employment by Workplace: Characteristics of Industry Employment by Workplace: Number of Establishments by Size Labor Force Poverty Commuting Housing Housing Demand Median Housing Value Median Monthly Rent Economics Real Personal Per Capita Income Median Household Income Assessed Property Value Taxable Retail Sales Annual Public Revenues and Expenditures Public Education Expenditures Appendix 2:

4 Acknowledgements A number of people made valuable contributions to the preparation of this report. The Community Policy Analysis Center (CPAC) wishes to thank Darla Campbell from Schuyler County University of Missouri Extension Center for her leadership in this project and contributions to this report. Ms. Campbell spent many hours with CPAC staff discussing presentations, meetings, data, and local economic conditions. CPAC also wishes to thank David Hill, from Marion County University of Missouri Extension Center. Thanks to Sharon Gulick and Terry Hackney of the University of Missouri Extension Community Economic and Entrepreneurial Development (ExCEED) program. CPAC thanks the Northeast Community Advisory Panel members for their commitment, thoughtfulness and patience during this project. CPAC Staff Acknowledgements Jill Lucht, MS, CPAC Research Associate, provided editorial support and report design. Bhawani Mishra, CPAC Graduate Research Assistant and PhD candidate in Agricultural Economics, gathered, analyzed and summarized data for this report. Merdan Bayramov, CPAC Graduate Research Assistant and Master s candidate in the Truman School for Public Affairs gathered, analyzed and summarized data for this report. 4

5 Executive Summary This report includes a set of annual baseline projections of demographic, economic, and fiscal conditions through 2016 for the Northeast Region, which includes Schuyler County, Scotland County, Clark County, Knox County, Lewis County and Shelby County. Findings are based on a comprehensive statistical analysis of the most recent secondary data available, as well as input from the Community Advisory Panel. The base year for the projections in this report is 2006, the most recent year that data were available when the study began. Dollar figures are reported in constant 2006 terms, with no attempt to estimate future inflation rates. Countylevel projections are available for each individual county in the appendices. The projections in this report are based on the following growth rates for four key variables. These four key variables guide the projections in this statistical model. They are based on economic trends from 1996 to 2006 in the Northeast Region and input from the Northeast Community Advisory Panel. (See Appendix 1 for a full discussion of the Show-Me Model and Key Variables.) Annual Average Growth Rates Used in Baseline Projections Employment 1 Personal Per Capita Income External* Employment 2 External * Labor Force 3, 4 REGION NA NA Clark NA NA Knox NA NA Lewis NA NA Schuyler NA NA Scotland NA NA Shelby NA NA * External Counties are the counties that are outside the region and adjacent to it. Northeast Region s External Counties are: Adair, Macon, Monroe, Marion, Putnam, Adams (Illinois), Hancock (Illinois), Lee (Iowa), Van Buren (Iowa), Davis (Iowa), Appanoose (Iowa). 1 Employment is the number of full- and part-time jobs in the county. The Annual Average Growth Rate refers to projected yearly change in the number of full- and part-time jobs in the county. This rate is calculated based on historical patterns from 1996 to External Employment is the number of full- and part-time jobs in the counties that are outside and adjacent to the region. 3 External Labor Force is the number of people who are 16 years and older who are either employed or unemployed and looking for jobs in the counties outside and adjacent to the region. 4 For this analysis, the external labor force growth rate was set at 0.7 percent by CPAC staff for technical reasons. 5

6 The projections in this report do not represent predictions of regional economic conditions. Rather, this report is designed to help decision-makers see regional economic activity as a comprehensive system that is both logically consistent and statistically valid. The Show-Me Model does not account for changes due to the national business cycle or other macroeconomic effects. This means that the national economic events starting in 2008 (fluctuation in gas prices, recession, housing market turmoil, and banking crisis) are not accounted for in this analysis. But, the Show-Me Model does reflect how changes in one variable such as population can affect other variables such as Retail Sales and Public Revenues. (See Appendix 1 for a full discussion of the estimation method used in this report.) Note: How to Use This Report in an Uncertain Economic Time In the Community Advisory Panel s fourth and final meeting (January 30, 2009), the group asked CPAC representatives how best to use the projections in this report given that CPAC and the Advisory Panel determined key assumptions before the full effects of the flooding in the region, the national recession, housing crisis and banking crisis became known in late Indeed, the full effects of these regional and national events will not be fully understood for months or years to come. The Community Advisory Panel selected growth rates for employment and income in the region, and employment and labor force in the surrounding counties (which drive all of the projections in this report) in the summer and fall of 2008 based on the regional economic events that had actually occurred and/or were known and expected at that time. Therefore, projections in this report reflect actual economic history from 1996 to 2006 and regional economic changes that were known to the advisory panel members at that time. The projections in this report assume that the regional economy has continued on that path, without the influence of the larger national recession, etc. Residents of the Northeast Region may choose to use these projections in the following ways: 1. Use Baseline Projections as Best Known Estimates in Uncertain Time. Given that nobody can accurately predict the future impact of the current economic crisis, the Northeast Region is well positioned because it has the best known projections for its future based on the conditions immediately before the full force of the recession came to light. These projections may still be used for community and regional planning and discussions, grant applications, etc. with the caveat that current the economic crisis may diminish some of the positive projections. 2.Use Baseline Projections as a Benchmark. If economic conditions continue as was assumed by the Advisory Panel in 2008, then the projections in this report will be relatively accurate. If conditions do not continue as was expected (employment and income do not grow as originally anticipated, for example) then the difference between what actually occurs in the future and the projections in this report can be attributed, at least partially, to outside economic events/conditions. This gives regional residents a way to gauge the impact of outside economic events and circumstances. 6

7 Key Findings In 2016, Northeast Region s population is projected to be 38,070. Between 2006 and 2016, the region s population is expected to increase by 1,275 people, an annual increase of 0.3 percent. The number of school aged children will also increase at an annual rate of 0.3 percent, an increase of 240 children in region from 2006 to In 2006 the largest industrial sectors in the Northeast Region were Farming (24 percent of all jobs) and Other Private (22 percent), followed by Local Government (15 percent) and Services (11 percent). Small businesses are prominent in the Northeast Region, which is typical of rural Missouri. Approximately 67 percent of all businesses in the Region employed fewer than five people in 2006, and 84 percent of all businesses employ fewer than 10 people. Median household income (in real 2006 dollars) will remain relatively flat from 2006 to 2016, increasing by only $50 in the ten-year period to $33,982. According to CPAC projections, the number of unemployed people in the Region is expected to increase by 23 people from 871 people in 2006 to 894 people in CPAC projects an unemployment rate of 4.4 percent for the Northeast Region in The demand for housing will increase by 493 housing units from 2006 to The total demand for housing in Northeast Region in 2016 is projected to be 15,531. Northeast Region s median housing value is not projected to change significantly from 2006 to The 2016 value is expected to be about $54,140 (in real 2006 dollars), only $63 more than the value in Taxable retail sales are projected to increase to $248.4 million (in real 2006 dollars) by 2016, an annual average increase of 0.5 percent per year in the ten-year period. Both Public Revenue and Expenditures are projected to increase from 2006 to 2016 for all counties in the Northeast Region. Revenues are projected to remain higher than expenditures for all counties. 7

8 Table A: Northeast Region Summary Table Demographics Absolute Change ( ) Cumulative Percentage Change from 2006 to 2016 Annual Growth Rate Total Population 36,795 38,070 1, % 0.3% 0 to 4 Years 2,349 2, % 0.3% 5 to 17 Years 7,036 7, % 0.3% 18 to 64 Years 20,691 21, % 0.4% 65 Years & Older 6,719 6, % 0.3% Workforce Characteristics Number of Full- and Part-Time Jobs 18,399 18, % 0.3% Total Labor Force 19,657 20, % 0.4% Female Labor Force 9,113 9, % 0.4% Number of Unemployed People % 0.3% Population Living Below Poverty Threshold 6,130 6, % 0.3% In-commuters Out-commuters See county specific projections in Section 2 and Appendix 2 Housing Total Demand for Housing 15,038 15, % 0.3% Demand Owner-occupied Housing 11,532 11, % 0.3% Median Housing Value** $54,077 $54,140 $63 0.1% 0.0% Median Monthly Rent** $341 $341 $0 0.0% 0.0% Economics Personal Per Capita Income ** $22,721 $23,234 $ % 0.2% Median Household Income ** $33,932 $33,982 $50 0.1% 0.0% Assessed Property Value $423.1 $441.3 $ % 0.4% Taxable Retail Sales $235.3 $248.4 $ % 0.5% Public Finances Total Annual Public Revenues Demand for Annual Public Expenditures Revenues minus Expenditures Total Education Expenditures **All monetary figures have been adjusted to 2006 dollars $109.3 $113.4 $ % 0.4% $100.3 $102.8 $ % 0.2% $9.0 $10.6 $ % 1.6% $48.8 $50.5 $ % 0.3% 8

9 Project Overview The University of Missouri Extension Community Economic and Entrepreneurial Development Program (ExCEED) commissioned a Baseline Study and Report by the Community Policy Analysis Center (CPAC) for the Northeast Region in This report is meant to help local leaders and residents better understand their regional economy. CPAC uses the Show-Me Model 5 and IMPLAN in order to develop baseline studies, which provide information on historical patterns of employment, labor force, commuting patterns, population, taxable retail sales, local government revenues and expenditures, and other key economic and demographic variables. Baseline studies also provide 10 year projections on demographic and economic variables. This report also includes information on employment (number of full-time and part-time jobs) by industry and business size by number of employees. This can help groups think about economic issues that their communities might face in the future. Community Advisory Panels. Most baselines conducted by CPAC include the formation of community advisory panels, which oversee development of the project, provide information about local economic forces and learn to interpret the baseline projections. In the Northeast Region, the Community Advisory Panel met four times in 2008 and The Advisory Panel s comments and suggestions were integrated into this report and analysis to the extent possible. The Advisory Panel met on the following dates in Edina, Missouri: April 22, 2008 June 12, 2008 October 2, 2008 January 30, 2009 Issues specific to the Northeast Region. When the CPAC Baseline Study began, the following issues were identified as significant during Advisory Panel meetings. Transfer payments. Some community advisory panel members speculated that transfer payments make up a high percentage of personal income in the region. Part-time jobs. Some community advisory panel members suspected that many people in the Northeast Region work more than one part-time job. Therefore, the number of jobs in the region may increase, but may not lead to higher population or higher income. 5 The Show-Me Model is an economic model developed by CPAC faculty. It is designed to be used interactively in communities and provides 10-year projections for a variety of socioeconomic variables. A more detailed explanation is provided in Appendix 1. The projections in this report were generated using the Show-Me Model Version R2.7, designed by Dennis Robinson, PhD. 9

10 Transportation. Some community advisory panel members said that transportation was a key to employment opportunities. Knox and Scotland have less access to major roads. Therefore, it is harder for residents of these counties to commute to places like Kirksville. The high cost of gas was an issue for commuters in Technology advances are lacking. Some community advisory panel members wondered if the lack of high speed internet in the region might inhibit business opportunity and growth. Hospital expansion in Scotland County. Community advisory panel members felt that the hospital expansion would result in increased employment opportunities. In migration. Some community advisory panel members had observed that people from outside the region purchase land in the Northeast because it is relatively inexpensive for second home, retirement etc. Population diversity. Some community advisory panel members had observed growing diversity in the regional population due to influx of second home owners, retirees, Mennonites and eco-friendly communities. Retiree population is high. Economic relationship between Northeast Region of Missouri, Iowa, and Illinois. Some community advisory panel members said that there were many people who commute between Iowa, Illinois and the Northeast Region of Missouri. 10

11 Number of People 1. Socio-Demographic Characteristics Population According to CPAC projections, Northeast Region s total population will increase from 36,975 in 2006 to 38,070 in 2016, an average annual increase of 0.3 percent per year. All counties are projected to experience increases. Knox County will increase at the fastest rate, 0.5 percent on average per year. Figure 1: Northeast Region Population Projection 6 45,000 Total Population 40,000 35,000 30,000 25,000 20,000 15,000 10,000 5,000 0 Shelby Scotland Schuyler Lewis Knox Clark Source: 2000 US Census. Analysis by CPAC Year is the base year in all projections. All values are calculated with the CPAC Show-Me Model Version R2.7. For most charts, values before 2006 are actual values. 11

12 The following table provides county-level information. For complete county-level projections, please refer to the Appendices. Table 1: Total Population Projection 2016 Population Projection Cumulative Change from 2006 to 2016 Annual Average Change Clark 7, % 0.4% Knox 4, % 0.5% Lewis 10, % 0.4% Schuyler 4, % 0.2% Scotland 4, % 0.2% Shelby 6, % 0.2% REGION 38, % 0.3% Source: 2000 US Census. Analysis by CPAC Northeast Community Advisory Panel members observed that there seems to be an increase retiree populations moving to the entire region. This may be due to native retirees returning to the area, or the attraction of the rural environment. Advisory Panels members provided some possible explanations for the relatively higher population projections for Clark, Knox and Lewis Counties. The group also thought part of the growth in Clark, Knox, Scotland and Schuyler were due Amish and Mennonite population natural growth and some inmigration among the Mennonites. Other population issues highlighted by the Advisory Panel included the following: Population growth in Clark County may be related to increased job opportunities in Keokuk, Iowa and other Iowa towns. A new truck stop in Wayland may also contribute to growth. For Knox County, it is possible that people from the Kirksville area are moving to the country. Growth in the Heartland Community may be due to the school, dairy, and bible college, and the long-term residential rehabilitation programs offered there. For Lewis County, population growth might be due to the Culver-Stockton College and growth at Charles Industries. The expansion of Route 36 to four-lanes in Shelby County may spur some job growth, but according to Advisory Panel members, not much population growth. 12

13 Number of People Age According to CPAC projections, the Northeast Region will be gaining population in all age groups from 2006 to All age categories are estimated to increase at similar rates of 0.3 to 0.4 percent per year. In 2016, CPAC has projected the following populations for the region: 2016 Population of 0-4 years: 2, Population of 5-17 years: 7, Population of years: 21, Population of 65 years and older: 6,889 Figure 2: Northeast Region Population Projections by Age 25,000 Total Population Groups 20, to 64 Years 15,000 0 to 4 Years 5 to 17 Years 18 to 64 Years 65 Years & Older 10,000 5 to 17 Years 5, Years + 0 to 4 Years 0 Source: 2000 US Census. Analysis by CPAC Year 13

14 Number of People 2. Workforce Characteristics Employment (Full- and Part-time jobs) There were 18,399 full-time and part-time jobs in the Northeast Region in In 2016, there will be 18,964 jobs, according to CPAC calculations. This is an annual average growth rate of 0.3 percent. Figure 3: Northeast Region Employment Projections 20,000 Total Employment (Full-time and Part-time Jobs) 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0 Shelby Scotland Schuyler Lewis Knox Clark Source: 2000 US Census. Analysis by CPAC Year For this study, it was assumed that employment (i.e., full- and part-time jobs) in four of the counties in the Northeast Region would increase, as shown in the table below. It was also assumed that Shelby County and Schuyler County s employment would have no change. These assumptions were based on an analysis of employment trends in each of the Northeast Region counties from 1996 to 2006 and input from the Northeast Community Advisory Panel. 7 7 For a full description CPAC Baseline process, see Appendix 1. 14

15 Number of People Table 2: Employment (full-time and part-time jobs) Cumulative Change Assumed Annual Average 2016 Projections from 2006 to 2016 Growth Rate Clark 3, % 0.5% Knox 2, % 0.5% Lewis 4, % 0.5% Schuyler 1, % 0.0% Scotland 2, % 0.1% Shelby 3, % 0.0% REGION 18, % 0.3% Source: 2000 US Census. Analysis by CPAC. Assumed growth rates selected by Advisory Panel. Number of Unemployed The number of unemployed people is projected to increase from 871 people individuals in 2006 to 894 in The number of unemployed people tends to increase as population and the number of jobs increases. The unemployment rate in the region is estimated at 4.4 percent by 2016 for the Northeast Region (see Figure 5). Lewis, Knox and Scotland Counties are estimated to have unemployment rates lower than the region in 2016 (3.7, 3.8 and 4.2 percent, respectively). Clark, Shelby and Schuyler Counties have higher unemployment rates by 2016 (5.0, 5.1 and 5.1 percent, respectively). Figure 4: Northeast Region Projection for Number of Unemployed People 1,200 Number of Unemployed People 1, Shelby Scotland Schuyler Lewis Knox Clark Year Source: Bureau of Economic Analysis with analysis by CPAC 15

16 Percentage Table 3: Number of Unemployment People 2016 Unemployment Annual Average 2016 Projections Rate Growth Rate Clark % 0.3% Knox % 0.4% Lewis % 0.4% Schuyler % 0.1% Scotland % 0.2% Shelby % 0.1% REGION % 0.3% Source: Bureau of Economic Analysis with analysis by CPAC Figure 5: Northeast Region Unemployment Rate 5.6% Unemployment Rate 4.4% 3.2% 2.0% Year Scotland Lewis Knox Clark Schuyler Shelby REGION Note: Vertical scale not set at "0" Source: Bureau of Economic Analysis with analysis by CPAC 16

17 Employment by Workplace: Characteristics of Industry Farm Employment has accounted for the largest number of jobs in the Northeast Region in both 2001 and 2006 (See Figure 5). In 2006, there were 4,383 Farm Employment jobs in Northeast (24 percent of all jobs in the region). Other Private 8 was the second largest industry with 3,996 jobs (22 percent of all jobs in the region). Local Government was the third largest industry in 2006 (2,735 jobs representing 15 percent of regional employment), followed by Services (1,983 jobs or 11 percent of regional employment), and then by Retail Trade (1,759 jobs or 10 percent of regional employment). The Northeast Region lost 132 jobs overall between 2001 and Industries with the highest losses (in percentage terms) include Wholesale Trade (31 percent between 2001 and 2006) and Other Services (13 percent between 2001 and 2006). Industries with the highest increases include Construction (96 percent between 2001 and 2006) and Finance, Insurance and Real Estate (40 percent). Employment by Workplace: Number of Establishments by Size The number of businesses grew in the Northeast Region from 897 in 2001 to 905 establishments in 2006 (see Figure 6). Approximately 67 percent of the region s business establishments employed fewer than 5 people in 2006 (603 businesses), and 84 percent of all firms employed fewer than 10 employees (763 businesses). There is only one business in the region with more than 250 employees, and no businesses with 500 or more employees. 8 Other Private includes sectors such as forestry, fishing, related activities, and other; Mining; Utilities; Health care and social assistance; Arts, entertainment, and recreation; Accommodation and food services; and, Educational services. Depending on the County, some of these categories have been omitted due to disclosure issues or because the industry contains less than ten employees. 17

18 Industries Characteristics of Industry and Establishments in the Region Figure 6: Northeast Region Number of Full and Part-Time Jobs by Industry Number of Full and Part-Time Jobs by Industry for Northeast Region Other Government Local Government 2,735 2,834 Other private 3,996 4,097 Services 1,983 2,290 Finance, insurance, and real estate Retail trade 1,759 1,749 Wholesale trade Manufacturing Construction Farm employment 4,383 4, ,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 5,000 Full and part-time jobs Northeast Region includes the following counties: Clark, Knox, Lewis, Schuyler, Scotland, Shelby * Some county level data are not include due to disclosure issues Source: Bureau of Economic Analysis 18

19 Establishments by Employment-Size Class Figure 7: Northeast Region Number of Establishments by Size Number of Establishments by Size for Northeast Region '1000 or more' ' ' ' ' ' ' '50-99' '20-49' '10-19' '5-9' '1-4' Total Establishments ,000 Number of Establishments Northeast Region includes the following counties: Clark, Knox, Lewis, Schuyler, Scotland, Shelby Source: US Census Bureau 19

20 Number of People Labor Force Labor force is the number of people 16 years of age and older that are either (a) working or (b) unemployed and looking for work. There will be 20,412 people in the labor force in Northeast Region in 2016, according to CPAC projections. This is an annual average increase of 0.4 percent. Women make up approximately 46 percent of the total labor force in the region. Figure 8: Northeast Region Labor Force Projection 25,000 Total Labor Force 20,000 15,000 Shelby 10,000 5,000 0 Scotland Schuyler Lewis Knox Clark Year Table 4: Total Labor Force and Female Labor Force Total Labor Force Female Labor Force Average Annual Change Average Annual Change 2016 Projection from 2006 to Projection from 2006 to 2016 Clark 3, % 1, % Knox 2, % 1, % Lewis 6, % 2, % Schuyler 2, % 1, % Scotland 2, % 1, % Shelby 3, % 1, % REGION 20, % 9, % Source: Bureau of Labor Statistics with analysis by CPAC 20

21 Number of People Poverty The number of people living below the Federal Poverty Threshold 9 in Northeast Region is projected to increase at 0.3 percent annually from 2006 to There were 6,130 people living below the Federal Poverty Threshold in 2006, and the 2016 projection is 6,291. The percentage of people living below the federal poverty threshold for the region is projected to be 16.5 percent by 2016 (see Figure 10). Knox County is projected to have the highest poverty rate at 19.3 percent by Figure 9: Projection for Number of People Living Below the Federal Poverty Threshold 7,000 Population Living Below Poverty Threshold 6,000 5,000 4,000 3,000 2,000 1,000 0 Shelby Scotland Schuyler Lewis Knox Clark Year Table 5: Number of People Living Below Poverty Threshold Annual Average 2016 Projections 2016 Poverty Rate Growth Rate Clark 1, % 0.4% Knox % 0.4% Lewis 1, % 0.3% Schuyler % 0.1% Scotland % 0.2% Shelby 1, % 0.1% REGION 6, % 0.3% Source: 2000 US Census with analysis by CPAC 9 The 2000 US Census Poverty Threshold for a family of 4 with 2 children is $17,463. The Threshold is adjusted depending in the number of adults and children in the household. 21

22 Percentage Figure 10: Northeast Region Percentage of People Living Below the Federal Poverty Threshold 20.8% Percentage of People Living Below the Federal Poverty Threshold 19.6% 18.4% 17.2% 16.0% 14.8% 13.6% 12.4% 11.2% 10.0% Year Clark Knox Lewis Schuyler Scotland Shelby REGION Note: Vertical scale not set at "0" Source: 2000 US Census with analysis by CPAC 22

23 Commuting CPAC projections include estimates of the number of in-commuters (people travelling into each county from other counties to work) and the number of out-commuters (residents of each county who travel to other counties for work). Because individuals commute between counties within the Northeast Region, commuting projections are provided at the county-level rather than for the region as a whole to avoid double-counting individual commuters. For example, a Clark County resident might commute to Knox County for work. This person will be represented twice in the projections below. He/she will appear once as a Clark County Out-Commuter and once as a Knox County In-Commuter. Lewis County is projected to have the highest number of in-commuters and out-commuters in the region, with a 2016 projection of 721 and 2,233 respectively, according to the CPAC analysis. But Lewis County is not projected to have the highest commuting growth rates. In-commuting is projected to increase at the fastest annual rate in Knox County (1.5 percent). Shelby County shows the highest growth rate for out-commuters (1.1 percent annually). Shelby, Scotland and Schuyler Counties have lower in-commuter growth rates than out-commuter growth rates (see table below). Clark, Knox and Lewis Counties present the opposite pattern. The following table summarizes commuting projections for the region. Table 6: Commuting Projections In-Commuters Out-Commuters Average Annual Average Annual 2016 Projection Change from 2006 to Projection Change from 2006 to 2016 Clark % 1, % Knox % % Lewis % 2, % Schuyler % 1, % Scotland % % Shelby % % Source: 2000 US Census with analysis by CPAC 23

24 Number of People Number of People Figure 11: Northeast Region In-Commuting Projection 800 In-Commuters 700 Lewis 600 Clark Knox Scotland Schuyler Shelby Year Clark Knox Lewis Schuyler Scotland Shelby Figure 12: Northeast Region Out-Commuting Projection 2,500 Out-Commuters Lewis 2,000 1,500 Clark 1, Schuyler Shelby Knox Scotland 0 Year Clark Knox Lewis Schuyler Scotland Shelby Source: 2000 US Census with analysis by CPAC 24

25 Number of Housing Units 3. Housing Housing Demand 10 The demand for housing in the Northeast Region is projected to increase by 0.3 percent per year from 15,038 in 2006 to 15,531 in Demand for owner-occupied housing will increase at the same rate. Demand for owner-occupied housing is projected to account for 77 percent of total housing demand in 2016 for the region. Figure 13: Northeast Region Housing Demand Projection 18,000 16,000 Total Demand for Housing and for Owner-Occupied Housing Total Occupied 14,000 12,000 Owner-Occupied Housing 10,000 8,000 6,000 4,000 2,000 0 Total Occupied Owner-Occupied Source: 2000 US Census with analysis by CPAC Year 10 The demand for housing is defined as the number of housing units that is theoretically necessary to house the number of people and households in the county. 25

26 Dollars Table 7: Housing Demand Demand for Owner-Occupied Total Housing Demand Housing 2016 Projection Average Annual Change 2006 to Projection Average Annual Change 2006 to 2016 Clark 3, % 2, % Knox 1, % 1, % Lewis 4, % 3, % Schuyler 1, % 1, % Scotland 1, % 1, % Shelby 2, % 1, % REGION 15, % 11, % Source: 2000 US Census with analysis by CPAC Median Housing Value Median housing values will be relatively static in the Northeast Region, according to CPAC projections. Median housing value is projected to increase in real terms by only $63 (from $54,077 in 2006 to $54,140 in 2016). This is an annual average increase of 0.01 percent. Figure 14: Northeast Median Housing Value $65,000 Median Housing Value (in 2006 dollars) $60,000 Lewis Clark $55,000 $50,000 Region Shelby Scotland $45,000 Schuyler Knox $40,000 $35,000 Year Clark Knox Lewis Schuyler Scotland Shelby Northeast Region Note: Vertical scale not set at "0" Source: 2000 US Census with analysis by CPAC 26

27 At the county-level, none of the six counties is expected to experience housing value increases of more than 0.01 percent on average per year. Lewis County s 2016 projected housing value is the highest in the region at $61,382, and Knox County s is the lowest at $44,287. Table 8: Median Housing Values (in 2006 dollars) 2016 Projections Cumulative Change from 2006 to 2016 Annual Average Growth Rate Clark $ 60, % 0.00% Knox $ 44, % 0.00% Lewis $ 61, % 0.01% Schuyler $ 45, % 0.00% Scotland $ 50, % 0.00% Shelby $ 51, % 0.00% REGION $ 54, % 0.01% Source: 2000 US Census with analysis by CPAC 27

28 Dollars Median Monthly Rent Median monthly rent for the Northeast Region is not projected to change significantly from 2006 to The 2016 projected value is $341, the same value as the median rent in (All monetary figures have been adjusted to 2006 dollars.) Figure 15: Northeast Region Median Monthly Rent $ Median Monthly Rent (in 2006 dollars) $ $ Clark Scotland $ $ Shelby Region $ $ Knox Schuyler Lewis $ $ Year Clark Knox Lewis Schuyler Scotland Shelby Northeast Region Note: Vertical scale not set at "0" Table 9: Median Monthly Rent (in 2006 dollars) 2016 Projections Cumulative Change from 2006 to 2016 Annual Average Growth Rate Clark $ % 0.00% Knox $ % 0.00% Lewis $ % 0.00% Schuyler $ % 0.00% Scotland $ % 0.00% Shelby $ % 0.00% REGION $ % 0.00% Source: 2000 US Census with analysis by CPAC 28

29 Dollars 4. Economics Real Personal Per Capita Income For this analysis, CPAC assumed that the Real Personal Per Capita Income annual average growth rates for each of the counties will be as shown in Table 10, with growth rates ranging from -0.3 to 0.45 percent. These assumptions are based on an analysis of income trends in the Region from 1996 to 2006 and input from Northeast Community Advisory Panel. 11 At the regional level, Personal Per Capita Income is projected to grow at a rate of 0.2 percent per year. According the baseline projections, Personal Per Capita Income for the region will increase from $22,721 in 2006 to $23, 234 in 2016 (adjusted to 2006 dollars). Figure 16: Northeast Region Real Personal Per Capita Income $30,000 Personal Per Capita Income (in 2006 dollars) $28,000 $26,000 Shelby $24,000 $22,000 Knox Clark Region Scotland Lewis $20,000 Schuyler $18,000 Year Clark Knox Lewis Schuyler Scotland Shelby Northeast Region Note: Vertical scale not set at "0" Source: 2000 US Census with analysis by CPAC 29

30 Dollars Table 10: Real Personal Per Capita Income (in 2006 dollars) 2016 Projection Cumulative Change from 2006 to 2016 Assumed Annual Average Growth Rate Clark $ 24, % 0.45% Knox $ 24, % -0.10% Lewis $ 22, % 0.45% Schuyler $ 20, % -0.30% Scotland $ 22, % 0.00% Shelby $ 25, % 0.30% REGION $ 23, % 0.22% Source: 2000 US Census with analysis by CPAC. Assumed growth rates selected by Advisory Panel. Median Household Income Median household income for Northeast Region is projected to grow slightly in real terms from 2006 to The 2016 median household income for the region is projected to be $33,982, just $50 higher than in 2006 (in real 2006 dollars). Figure 17: Northeast Region Median Household Income $37,000 Median Household Income (in 2006 dollars) $36,000 Lewis $35,000 $34,000 Shelby Clark Region $33,000 $32,000 Schuyler Scotland Knox $31,000 $30,000 Year Clark Knox Lewis Schuyler Scotland Shelby Northeast Region Note: Vertical scale not set at "0" Source: 2000 US Census with analysis by CPAC 11 For a full description of CPAC Baseline process, see Appendix 1. 30

31 Millions of 2006 Dollars Table 11: Median Household Income (in 2006 dollars) 2016 Projection Cumulative Change from 2006 to 2016 Annual Average Change Clark $ 34, % 0.0% Knox $ 31, % 0.0% Lewis $ 35, % 0.0% Schuyler $ 32, % 0.0% Scotland $ 32, % 0.0% Shelby $ 34, % 0.0% REGION $ 33, % 0.0% Source: 2000 US Census with analysis by CPAC Assessed Property Value In 2016, assessed property value in the Northeast Region is projected to be $441.3 million (in real 2006 dollars). This represents an average annual increase of 0.4 percent from the 2006 value of $423.1 million. Assessed property includes all property for all uses such as residential, industrial, vacant properties, etc. Figure 18: Northeast Region Property Value Projection $ Property Value (In Millions of 2006 Dollars) $ $ $ $ $ $ $ $ $50.00 $0.00 Shelby Scotland Schuyler Lewis Knox Clark Year Source: Bureau of Economic Analysis with analysis by CPAC 31

32 Millions of 2006 Dollars All counties in the region are projected to have increases in assessed property values by But the average annual growth rate is less than 1 percent per year. Lewis County is expected to see the fastest growth, with an average annual increase of 0.7 percent per year, followed by Clark County at 0.5 percent per year. Scotland County is expected to grow the slowest, at a rate of 0.2 percent per year. Table 12: Assessed Property Value (in Millions of 2006 Dollars) 2016 Projection Cumulative Change from 2006 to 2016 Annual Average Change Clark $ % 0.5% Knox $ % 0.4% Lewis $ % 0.7% Schuyler $ % 0.2% Scotland $ % 0.2% Shelby $ % 0.3% REGION $ % 0.4% Source: Bureau of Economic Analysis with analysis by CPAC Taxable Retail Sales Taxable retail sales are projected to increase by 0.5 percent on average per year between 2006 and In 2016, taxable retail sales are projected to be $248.4 million (in 2006 dollars) compared to $235.3 million in This is an overall increase of $13.1 million in the 10 year period. Figure 19: Northeast Region Taxable Retail Sales Projection $ Retail Sales (In Millions of 2006 Dollars) $ $ $ Shelby $ Scotland Schuyler $50.00 $0.00 Lewis Knox Clark Source: 2000 US Census with analysis by CPAC Year 32

33 Lewis County is expected experience the fastest growth in taxable retail sales between 2006 and 2016, with an increase of 1 percent per year on average. At this growth rate, Lewis County s 2016 retail sales will be $58.6 million. Clark County s retail sales will grow at a rate of 0.7 percent per year. Knox and Shelby Counties are both expected to increase at 0.5 percent per year. Schuyler County is expected to experience a decrease of 0.1 percent per year. See Table 13 below. Table 13: Taxable Retail Sales (in Millions of 2006 Dollars) 2016 Projection Cumulative Change from 2006 to 2016 Annual Average Change Clark $ % 0.7% Knox $ % 0.5% Lewis $ % 1.0% Schuyler $ % -0.1% Scotland $ % 0.2% Shelby $ % 0.5% REGION $ % 0.5% 33

34 5. Public Finances Annual Public Revenues and Expenditures Discussion of the data and projections All public finance projections in this report include revenues and expenditures for all levels of local government (including county, cities, townships, and special districts). These figures are estimated on a yearly basis. Therefore, revenue projections do not include carry-over from year to year. Additionally, expenditures do not include large, one-time capital expenditures (such as a new fire engine or new school). The annual expenditures account only for the yearly operating expenses for local governments. Annual public expenditures may be interpreted as the cost that local governments will incur to meet the demand for services by local residents. The Show-Me Model does not account for macro-economic shifts and events. This means that the national economic events starting in 2008 (volatility in gas prices, the recession, the housing market turmoil, and banking crisis) are not accounted for in this analysis. Finally, while local governments are not technically supposed to carry over expenditures that exceed revenues in their budgets, the Show-Me Model does statistically allow this. Regional analysis of public finances Public Revenue for the six counties in the Northeast Region is expected to increase by 0.4 percent per year from 2006 to In 2016, total Public Revenue for the region is expected to reach $113.4 million (in real 2006 dollars). Public Expenditures are projected to increase at a rate of 0.2 percent per year, for a 2016 projected value of $102.8 million (in real 2006 dollars). At the regional level, then, revenues appear to growing at a faster rate than expenditures, and total revenues appear to remain higher than expenditures, assuming that there will be no major capital expenditures from 2006 to See Figures 18 and 19. Figure 20: Northeast Region Revenues Projection 34

35 Millions of 2006 Dollars Millions of 2006 Dollars $ Total Public Revenues (In Millions of 2006 Dollars) $ $80.00 $60.00 $40.00 $20.00 $0.00 Shelby Scotland Schuyler Lewis Knox Clark Year Figure 21: Northeast Region Public Expenditures Total Public Expenditures (In Millions of 2006 Dollars) $ $ $80.00 $60.00 $40.00 $20.00 $0.00 Shelby Scotland Schuyler Lewis Knox Clark Year Source: US Census of Governments, with analysis by CPAC 35

36 County-level analysis of public finances The 2016 Public Revenue projection in each of the six counties in the Northeast Region is higher than the 2016 Expenditure Projection, as shown in the Table 14 below. Lewis County is projected to experience the fastest growth in Revenues. Knox County is expected to experience the greatest increase in Expenditures. See Table 14 below. Table 14: Public Revenues and Expenditures (in Millions of 2006 Dollars) Revenues Expenditures Average Annual Average Annual 2016 Projection Change from 2006 to Projection Change from 2006 to 2016 Clark $ % $ % Knox $ % $ % Lewis $ % $ % Schuyler $ % $ % Scotland $ % $ % Shelby $ % $ % REGION $ % $ % Source: US Census of Governments, with analysis by CPAC Public Education Expenditures Annual projections for education expenditures are included in the total public expenditures reported above. However, because school funding issues tends to be important for communities, education expenditures (or demand for education services) are provided here separately. In 2016, annual public education expenditures are estimated to be $50.5 million for the Northeast Region, an increase of 3.5 percent per year from the 2006 value of $48.8 million (in constant 2006 dollars). 36

37 Millions of 2006 Dollars Figure 22: Northeast Region Education Expenditure Projection $60.00 Total Public Education Expenditures (In Millions of 2006 Dollars) $50.00 $40.00 $30.00 $20.00 Shelby Scotland Schuyler $10.00 Lewis Knox $0.00 Clark Year Source: US Census of Governments, with analysis by CPAC All the counties in the Northeast Region are expected to experience increases in Public Education Expenditures between 2006 and This can be interpreted as a growing demand for school services for the growing populations of children (ages 5-17) in each of these counties. Table 15: Public Education Expenditure (in Millions of 2006 Dollars) 2016 Projection Cumulative Change from 2006 to 2016 Annual Average Change Clark $ % 0.4% Knox $ % 0.6% Lewis $ % 0.5% Schuyler $ % 0.2% Scotland $ % 0.2% Shelby $ % 0.1% REGION $ % 0.3% Source: US Census of Governments, with analysis by CPAC 37

38 6. Conclusion The Northeast Region appears to be well positioned for positive population and economic growth, if current conditions continue into the future as assumed in this baseline study. According to this study, the region can expect to experience growth in population, employment, labor force, housing demand, personal per capita income, assessed property value, taxable retail sales, and local public revenues. Housing value and median household income are projected to remain relatively flat. The Regional Advisory Panel discussed several local, policy and macro-economic issues, however, which may affect the future of the Region. The recent flooding in the region has had an effect, for example, as have recent business closures. The effects of the high fuel costs on local family budgets was a concern through the early part of 2008 as well as commuting and overall consumer buying patterns. At the heart of the group s concerns was the overall national economic recession including the banking and housing crises. 38

39 Appendix 1: Four Key Variables and the Show-Me Model CPAC s Show-Me Model (Version R2.7) is an economic modeling system that is built upon the premise that there are four key variables (economic forces) that tend to drive change in regional economies. These four key variables (economic forces) are: Personal per capita income Employment (full-time and part-time jobs) External Employment (employment in the counties that are adjacent and outside of the Region) External Labor Force (labor force in the counties that are adjacent and outside of the Region) As these four variables change at faster or slower rates, they drive change in the rest of the community (population, housing demand, public service demand and expenditures, school enrollment, sales tax and retail tax revenues, etc). All these variables act together within the regional economy and community as a system. For example, an increase in employment may spur a population increase. Then, as population grows, so do retail sales, demand for housing and the labor force. CPAC built the Show-Me Model so that, by entering different growth rates for each of the four key variables (or making different assumptions about the driving economic forces), it captures all these interactions within the system in its projections. See Illustration A. Illustration A: CPAC Show-Me Model 4 Key Variables (assumptions) are set by Advisory Panel and can change. These determine forecasts. Projected Variables depend upon the assumptions (or 4 Key variable growth rates) Employment Growth Rate Population Labor force External Employment Growth Rate Commuting Poverty Per Capita Personal Income Growth Rate External Labor Force Growth Rate Unemployment Retail sales Local government revenues Local government expenditures Housing / property value 39

40 Through a series of meetings in each CPAC Baseline Project, Community Advisory Panels review the history of the four key variables and discuss local economic issues. The Advisory Panel members are asked to predict how the four key variables (employment, personal per capita income, external employment and external labor force) are most likely to change in the future. The table below shows the growth rates selected by the Northeast Community Advisory Panel. Annual Average Growth Rates Used in Northeast Region s Baseline Projections Employment 12 Personal Per Capita Income External* Employment 13 External * Labor Force 14, 15 REGION NA NA Clark NA NA Know NA NA Lewis NA NA Schuyler NA NA Scotland NA NA Shelby NA NA * External Counties are the counties that are outside the region and adjacent to it. Northeast Region s External Counties are: Adair, Macon, Monroe, Marion, Putnam, Adams (Illinois), Hancock (Illinois), Lee (Iowa), Van Buren (Iowa), Davis (Iowa), Appanoose (Iowa). 12 Employment is the number of full- and part-time jobs in the county. The Annual Average Growth Rate refers to projected yearly change in the number of full- and part-time jobs in the county. This rate is calculated based on historical patterns from 1996 to External Employment is the number of full- and part-time jobs in the counties that are outside and adjacent to the region. 14 External Labor Force is the number of people who are 16 years and older who are either employed or unemployed and looking for jobs in the counties outside and adjacent to the region. 15 For this analysis, the external labor force growth rate was set at 0.7 percent by CPAC staff for technical reasons. 40

41 Appendix 2: County-Level Projections 41

42 Clark County Summary Table Demographics Absolute Change ( ) Cumulative Percentage Change from 2006 to 2016 Annual Growth Rate Total Population 7,202 7, % 0.4% 0 to 4 Years % 0.5% 5 to 17 Years 1,357 1, % 0.4% 18 to 64 Years 4,201 4, % 0.4% 65 Years & Older 1,201 1, % 0.3% Workforce Characteristics Number of Full- and Part-Time Jobs 3,480 3, % 0.5% Total Labor Force 3,560 3, % 0.5% Female Labor Force 1,635 1, % 0.5% Number of Unemployed People % 0.3% Population Living Below Poverty Threshold 1,082 1, % 0.4% In-commuters % 1.3% Out-commuters 1,462 1, % 0.5% Housing Total Demand for Housing 3,012 3, % 0.4% Demand Owner-occupied Housing 2,352 2, % 0.4% Median Housing Value** $60,066 $60,094 $28 0.0% 0.0% Median Monthly Rent** $370 $370 $0 0.0% 0.0% Economics Personal Per Capita Income ** $23,037 $24,095 $1, % 0.5% Median Household Income ** $34,454 $34,487 $33 0.1% 0.0% Assessed Property Value $85.2 $89.9 $ % 0.5% Taxable Retail Sales $58.6 $62.7 $ % 0.7% Public Finances Total Annual Public Revenues Demand for Annual Public Expenditures Revenues minus Expenditures Total Education Expenditures **All monetary figures have been adjusted to 2006 dollars $20.0 $21.1 $ % 0.5% $18.2 $18.9 $ % 0.4% $1.8 $2.2 $ % 2.0% $9.2 $9.6 $ % 0.4% 42