Santa Barbara County - California Cut Flower Commission

Transcription

FOR IMMEDIATE RELEASE Media Contact: Julie Ficker Fleishman‐Hillard on behalf of CCFC Phone: 916.492.5339 Email: julie.ficker@fleishman.com CALIFORNIA CUT FLOWER INDUSTRY CONTRIBUTES SIGNIFICANT INVESTMENT TO STATE, SANTA BARBARA COUNTY IS HIGHEST PRODUCER Report Indicates Cut Flower Industry in Santa Barbara County Contributes Nearly $770.7 Million Annually to the County, Generating Substantial Revenues, Taxes and Jobs SANTA BARBARA, Calif., (Dec. 10, 2008) – California’s cut flower industry has an annual impact of nearly $10.3 billion on the state’s economy, and more than $2.1 million per day for every day of the year on Santa Barbara County’s economy, according to a report released today by Dr. Dennis H. Tootelian, Director of the Center for Small Business at California State University, Sacramento. The report, commissioned by the California Cut Flower Commission (CCFC), shows that for every dollar earned by the cut flower industry in California, 92 cents flows back into the local economy. Santa Barbara County is the highest cut flower producing region in the state. The area’s cut flower growers alone generate more than $648.3 million in total annual economic impact for the county, in terms of the business activity their operations create. Their spending activity creates nearly $21.1 million in taxes to help fund programs within the county. Additionally, growers spent more than $254.5 million in 2007 for employment costs, labor income and indirect business taxes in the county. "This report demonstrates that California’s cut flower industry touches virtually every segment of the state and local economy and positively influences the social framework of California," said CCFC Executive Director Kasey Cronquist. “The cut flower community in California employs approximately 14,580 jobs while generating billions in economic activity. Despite the challenges of intense global competition, the state’s flower industry is vibrant and something California should be proud of and work to protect.” Related to jobs, the research indicates that expenditures by growers, wholesalers, and retailers and its affiliated businesses creates a “ripple effect” of economic activity that generates 121,950 California full‐time equivalent jobs, with a total of $3.3 billion in gross wages. In Santa Barbara County, 7,410 jobs are created through the industry’s economic activity. The report states that without these jobs, the number of unemployed in the county could climb as much as 80.6 percent, or 12.5 percent statewide. “As a California flower grower, I’m proud that 75 percent of all high‐quality cut flowers in the U.S. are grown on California farms and contributing in such an important way to the economy through job growth, taxes and revenues,” said Wilja Happe of Farmer’s West Flowers and Bouquets, Inc., in Carpinteria, 2008 Board Chair and Commissioner for CCFC’s 3rd District. ‐more‐ Page Two/California Cut Flower Industry Economic Impact in Santa Barbara County “The California flower industry is a vital part of our state and clearly has a significant impact on our local and state economies,” said Congresswoman Lois Capps, who represents California’s 23rd Congressional District. “This report details the importance of California’s flower industry and will serve as a helpful point of reference in understanding the industry’s contributions to the state for years to come.” The report points out that the achievements of California’s cut flower industry are particularly impressive because the industry has become increasingly competitive stemming from aggressive pricing of imported flowers from other countries and wholesaler and retailer consolidation. The study was implemented by utilizing industry statistics, facilitating grower surveys and interviews and analyzing the data through the widely‐used IMPLAN model, which examines economic relationships between businesses and between business and consumers. This impact analysis then measures changes in economic variables on an entire economy. Data provided through IMPLAN mainly comes from federal government data sources. These include the U.S. Bureau of Economic Analysis, U.S. Bureau of Labor Statistics, and the U.S. Bureau of the Census. Analyses for all states and counties are made for 509 industrial sectors. “The goal of the study was to demonstrate the overall impact of the cut flower industry and its ability to generate business activity, employment, personal income and taxes for other industries and the state overall,” said Dr. Tootelian. “Even though we took a very conservative approach to measuring the data, the results showed a very sizeable impact to California.” The full economic impact report and related fact sheets can be found in the media room at www.ccfc.org. About the California Cut Flower Commission The California Cut Flower Commission (CCFC) is a state commission created by the state legislature in 1990 with the mission to promote California cut flowers and foliages by providing industry leadership in public policies, research and education programs and trade positions. The CCFC is overseen by the California Department of Food and Agriculture and is funded by grower assessments. The Commission represents the state’s 250 growers from San Diego County to the Oregon border. For more information about California cut flowers, visit www.ccfc.org, and to learn more about the benefits of buying locally grown agricultural products – including flowers – visit www.californiagrown.org. ### ●
●
● California’s cut flower growers have a significant economic impact on Santa Barbara County, creating jobs and additional tax revenue that can be used to fund vital community programs. ●
●
● A Look at the Economic Impact of Cut Flower Growers in Santa Barbara County The county’s cut flower growers’ expenditures create a ripple effect that generates jobs. • 6,180 jobs are created as a result of spending by the county’s flower growers. The county’s cut flower growers spending by the dollar: • More than $648.3 million is the total economic impact in terms of business activity created by Santa Barbara County cut flower growers. • More than $254.5 million is the total amount growers spent in the county in 2007 and includes employment, labor income and indirect business taxes. • Nearly $21.1 million in taxes will be created from increased business activity caused by cut flower growers in the county – critical funds that benefit the communities within Santa Barbara County. The California Cut Flower Commission
represents growers in four districts, as shown here. District 3 Board Commissioners: Wilja Happe – Chair, Farmers’ West, Carpinteria Hans Brand, B&H Flowers, Carpinteria Dan Vordale, Ocean View Flowers, Lompoc CCFC Executive Director: Kasey Cronquist, Carpinteria A Look at Santa Barbara County’s Floral Industry Santa Barbara County’s flower growers, wholesalers and retailers have a total impact of nearly $770.7 million on the local economy, in terms of business activity created by expenditures. •
•
This equates to more than $2.1 million per day for every day of the year. To put this amount of money into perspective, if it were given to the people of Santa Barbara County, every person would receive more than $1,810. Santa Barbara County’s flower growers, wholesalers and retailers generate more than 7,410 jobs in the county through their economic activity. •
•
•
This accounts for nearly 3.5% of Santa Barbara County’s entire 2007 civilian labor force. If these jobs were not created, the number of unemployed in the county could grow as much as 80.6%. The amount of money generated for additional labor – money that goes to people – averages more than $930,010 per day. To put this amount of money into perspective, it equates to more than $1,600 per person in the entire county labor force. Santa Barbara County’s flower growers, wholesalers and retailers spent a combined total of nearly $298.9 million in 2007. •
•
Of every dollar these businesses generate in revenue, they return more than 92 cents to the county’s economy. The industry’s economic activities generate more than $31.4 million in additional taxes – or nearly $86,160 every day of the year. These tax dollars help fund vital programs within the county. Economic Impact Study conducted by Dr. Dennis Tootelian, Director of the Center for Small Business at California State University, Sacramento, October 2008, on behalf of the California Cut Flower Commission. For more information, contact Julie Ficker, julie.ficker@fleishman.com, 916.492.5339.
THE ECONOMIC IMPACT OF THE CUT FLOWER
INDUSTRY ON SANTA BARBARA COUNTY
REPORT OF FINDINGS
Prepared for:
Fleishman-Hillard, Inc.
On behalf of the California Cut Flower Commission
Sacramento, California
Prepared by:
Dennis H. Tootelian, Ph.D.
Tootelian & Associates
Sacramento, California
October 2008
TABLE OF CONTENTS
EXECUTIVE SUMMARY ................................................................................................ 3
INTRODUCTION .............................................................................................................. 6
METHODOLOGY FOR CONDUCTING THE ANALYSIS ............................................ 7
IMPLAN and Other Models Used in the Study .............................................................. 7
Data Sources ................................................................................................................... 9
Industry Average Financial Statistics ........................................................................... 10
Survey of Growers ........................................................................................................ 10
FINDINGS OF THE ANALYSES ................................................................................... 11
Computation of Total Expenditures Used in the Analyses ........................................... 11
Economic Impact of the Cut Flower Industry in Santa Barbara County ...................... 12
Economic Impact of Growers Only in Santa Barbara County...................................... 13
Possible Diffusion of Labor Income Spending ............................................................. 13
Possible Uses for Incremental Business Taxes Created ............................................... 14
SUMMARY AND CONCLUSIONS ............................................................................... 16
TABLE ONE: TOTAL IMPACT FOR SANTA BARBARA COUNTY ....................... 18
TABLE TWO: TOTAL IMPACT FOR GROWERS ONLY IN SANTA BARBARA
COUNTY .......................................................................................................................... 20
TABLE THREE: POSSIBLE DIFFUSION OF LABOR INCOME SPENDING .......... 22
2
EXECUTIVE SUMMARY
INTRODUCTION
In June 2008, Fleishman-Hillard, Inc. commissioned Tootelian & Associates to conduct
an economic impact study of the cut flower industry in California on behalf of the
California Cut Flower Commission (CCFC). The purpose was to measure the economic
benefits growers, wholesalers, and retail florists provide to the State and to specific
geographic areas within California.
An economic analysis consists of estimating the benefits an entity’s or group of entities’
expenditures provide to businesses, residents, and government within a defined
geographic area. The economic impact is computed in terms of the extent to which the
operations of cut flower growers, wholesalers, and retail florists generate additional
business activity, employment, personal income, and taxes.
Two economic impact models were used in this analysis. IMPLAN was used to compute
the overall impact, and a specially designed model was created to help define expenditure
levels to use in the IMPLAN model.
The primary model used for this analysis was IMPLAN. It provides modeling based on
data and tools to assess economic impacts at the state, multi-county, and county levels.
Widely recognized and used nationally and regionally, IMPLAN has more than 1,500
active users in the United States and internationally. These include clients in federal and
state government, universities, and private sector consultants.
The benefit of using input-output models, including IMPLAN, is that they help evaluate
the effects of industries on each other based on the supposition that industries use the
outputs of other industries as inputs. Some other models measuring economic activity
examine only the total output or employment of an industry, and not the dual causality
that may run both ways. The use of an input-output model provides a much more
comprehensive view of the inter-related economic impacts. It examines economic
relationships between businesses and between business and consumers. This impact
analysis then measures changes in any one or several economic variables on an entire
economy.
3
The total direct, indirect, and induced benefits arising due to the multiplier effect are
presented in four ways:
•
Output accounts for total revenues including all sources of income for a given
time period for an industry in dollars. This is the best overall measure of business
and economic activity because it is the measure most firms use to determine
current activity levels.
•
Employment demonstrates the number of jobs generated and is calculated in a
full-time equivalent employment value on an annual basis.
•
Indirect Business Taxes consist of property taxes, excise taxes, fees, licenses, and
sales taxes paid by businesses. While all taxes during the normal opetration of
bussinesses are included, taxes on profits or income are not included.
•
Labor Income includes all forms of employee compensation paid by employers
(e.g., total payroll costs including benefits, wages and salaries of workers, health
and life insurance, retirement payments, non-cash compensation), and proprietary
income (e.g., self employment income, income received by private business
owners including doctors, laywers).
To provide data for the IMPLAN analysis, the analyst developed a “feeder” economic
model that specifically addresses the variables and the critical issues. This model not
only provides the data used in the IMPLAN analysis, but brings the economic impact
down to a more understandable level to assess the impact in more detailed ways.
SUMMARY AND CONCLUSIONS
Based on the analyses conducted, the following summary points and conclusions appear
to be warranted:
•
Cut flower growers, wholesalers, and retail florists spent a combined total of more
than $298.9 million in 2007. Of every dollar these businesses generate in
revenue, they return more than 92 cents to the county’s economy.

The total economic impact in terms of business activity created by cut flower
growers’, wholesalers’, and retail florists’ expenditures in the county is nearly
$770.7 million. This equates to more than $2.1 million per day for every day of
the year. Growers alone create nearly $1.8 million per day in economic impact.
Shown below is the impact this has each sector on an average daily basis:
4
Sector
Manufacturing
Wholesaling
Retailing
Real Estate
Professional Services
Administrative
Education
Health
Arts, entertainment, recreation
Accommodations, food services
Other
Farming
Federal
State and local
Total
Daily Total
$197,264
$145,177
$147,491
$275,725
$239,753
$20,772
$11,935
$89,232
$22,383
$62,184
$58,296
$708,615
$34,522
$98,074
$2,111,423
Growers
Daily Total
$167,344
$48,025
$95,049
$234,750
$194,973
$15,956
$10,134
$76,051
$18,241
$52,366
$48,211
$707,487
$29,586
$77,993
$1,776,166
To put this amount of money into perspective, if it were given to the people of
Santa Barbara County, every person would receive more than $1,810. Of this,
more than $1,520 would come from grower contributions.

The amount of money generated for additional labor—money that goes to
people—averages more than $930,010 per day, and more than $783,920 of that is
grower generated.
To put this amount of money into perspective, it equates to more than $1,600 per
person in the entire county’s labor force whether they are employed or not.
•
The economic activities of cut flower growers, wholesalers, and retail florists
create more than 7,410 jobs in the county. Growers alone create more than 6,180
jobs.
To put this into perspective, this accounts for about 3.5% of Santa Barbara’s
entire civilian labor force in 2007. If these jobs were not created, the number of
unemployed in the county could grow as much as 80.6%.
•
The economic activities of cut flower growers, wholesalers, and retail florists also
generate more than $31.4 million in additional taxes--or about $86,160 every day
of the year. Growers alone generate nearly $57,770 in taxes per day. These tax
dollars help fund programs within the three counties.
Overall, cut flower growers, wholesalers, and retail florists have a significant economic
impact on Santa Barbara County. Their operations generate business activity in a wide
variety of economic sectors. In turn, this creates jobs, results in additional income for
residents of the three counties, and creates additional tax dollars from the increased
business activity that can be used to fund programs for the communities.
5
REPORT OF FINDINGS
INTRODUCTION
In June 2008, Fleishman-Hillard, Inc. commissioned Tootelian & Associates to conduct
an economic impact study of the cut flower industry in California on behalf of the
California Cut Flower Commission (CCFC). The purpose was to measure the economic
benefits growers, wholesalers, and retail florists provide to the State and to specific
geographic areas within California.
An economic analysis consists of estimating the benefits an entity’s or group of entities’
expenditures provide to businesses, residents, and government within a defined
geographic area. The economic impact is computed in terms of the extent to which the
operations of cut flower growers, wholesalers, and retail florists generate additional
business activity, employment, personal income, and taxes.
Tootelian & Associates is a Sacramento, California-based marketing and management
consulting firm. It specializes in performing economic impact studies, conducting market
research, and assisting its clients with their business and marketing plans. The consultant
was Dennis H. Tootelian, Ph.D.
The founder of the company, Dr. Dennis H. Tootelian, is a Professor of Marketing and
Director of the Center for Small Business in the College of Business Administration at
California State University, Sacramento. He received his Ph.D. in Marketing from
Arizona State University, with minor fields in Accounting and Management. Dennis has
published approximately one hundred articles dealing with all facets of business, and has
co-authored six texts on marketing and small business management. His academic
research has appeared as articles in such journals as the Journal of Marketing, Journal of
Retailing, Journal of Business Research, Journal of Health Care Marketing, and Journal
of Professional Services Marketing. Results of some of his applied research and writing
have appeared in The Congressional Record, The Wall Street Journal, Forbes, The
Kiplinger Report, USA Today, ABC National News website, and even The National
Enquirer.
6
METHODOLOGY FOR CONDUCTING THE ANALYSIS
Two economic impact models were used in this analysis. IMPLAN was used to compute
the overall impact, and a specially designed model was created to help define expenditure
levels to use in the IMPLAN model.
IMPLAN and Other Models Used in the Study
The primary model used for this analysis was IMPLAN. It provides modeling based on
data and tools to assess economic impacts at the state, multi-county, and county levels.
Widely recognized and used nationally and regionally, IMPLAN has more than 1,500
active users in the United States and internationally. These include clients in federal and
state government, universities, and private sector consultants.
The benefit of using input-output models, including IMPLAN, is that they help evaluate
the effects of industries on each other based on the supposition that industries use the
outputs of other industries as inputs. Some other models measuring economic activity
examine only the total output or employment of an industry, and not the dual causality
that may run both ways. The use of an input-output model provides a much more
comprehensive view of the inter-related economic impacts. It examines economic
relationships between businesses and between business and consumers. This impact
analysis then measures changes in any one or several economic variables on an entire
economy.
Each industry that produces goods and services has an influence on, and in turn is
influenced by, the production of goods and services of other industries. These
interrelationships are captured through a multiplier effect as the demand and supply
trickle over from industry to industry (direct and derived demand) and thus impact total
output, compensation, employment, etc.
Multipliers may vary from one region to another depending on the strength of these
interrelationships. IMPLAN data can be used to compute economic impact at the
national, state, regional, and county levels. Of particular interest are industry output,
employment, value added as measured by employee compensation, proprietary income,
other property type income, and indirect business taxes), and final demand of institutions
(i.e., households, federal government, state and local governments, businesses).
The full range of economic impacts includes direct, indirect, and induced benefits:
•
Direct benefits consist of economic activity contained exclusively within the
designated sector(s). This includes all expenditures made and all people
employed.
7
•
Indirect benefits define the creation of additional economic activity that results
from linked businesses, suppliers of goods and services, and provision of
operating inputs.
•
Induced benefits measure the consumption expenditures of direct and indirect
sector employees. Examples of induced benefits include employees’ expenditures
on items such as retail purchases, housing, banking, medical services, and
insurance.
The total direct, indirect, and induced benefits arising due to the multiplier effect are
presented in four ways:
•
Output accounts for total revenues including all sources of income for a given
time period for an industry in dollars. This is the best overall measure of business
and economic activity because it is the measure most firms use to determine
current activity levels.
•
Employment demonstrates the number of jobs generated and is calculated in a
full-time equivalent employment value on an annual basis.
•
Indirect Business Taxes consist of property taxes, excise taxes, fees, licenses, and
sales taxes paid by businesses. While all taxes during the normal opetration of
bussinesses are included, taxes on profits or income are not included.
•
Labor Income includes all forms of employee compensation paid by employers
(e.g., total payroll costs including benefits, wages and salaries of workers, health
and life insurance, retirement payments, non-cash compensation), and proprietary
income (e.g., self employment income, income received by private business
owners including doctors, laywers).
The multiplier effect for sales and employment reflect the increased economic activity
that comes from sales being generated, and expenses being incurred, by a business.
When a business generates sales, it must use some of that money to purchase other goods
and other services and hire people to meet the demand for its products and services.
Purchases made by the business represent sales to other firms who must then also
purchase goods and services and hire people to meet their new demand. The additional
hiring to meet demand means more people will have income which they will use to
purchase goods and services for their households. All of this brings added sales to firms
in the community. The net effect is that sales dollars are recycled in the community
through this process of sales requiring additional purchases and employment, which
8
result in sales for other firms who must use that money to make their own purchases and
hire people. 1
The IMPLAN model can be used to quantify the multiplier effect that occurs when new
output or employment is added in the geographical area via the designated economic
activities. The multiplier effect is generated when new output or employment is added in
one sector, but generates additional output or employment in other sectors that supply
goods and services (indirect impact) and consumer services to employees (induced
impact).
The largest component of final demand is household consumption. It includes all
payments made by households to all industries for personal consumption of goods and
services. Part of total labor income may not be available for spending since it may be
used to pay personal taxes, principal and interest on loans, credit card payments, etc. It is
also expected that spending patterns will vary from one income level to another. For
example at the lower income levels, higher proportional spending takes place on food,
clothing, and shelter. At the higher income levels, disposal income is higher for luxury
spending.
To provide data for the IMPLAN analysis, the analyst developed a “feeder” economic
model that specifically addresses the variables and the critical issues. This model not
only provides the data used in the IMPLAN analysis, but brings the economic impact
down to a more understandable level to assess the impact in more detailed ways.
Data Sources
Data used to assess the economic impact came from a variety of sources. These include:
•
Industry average financial statements for growers, wholesalers, and retail florists
provided by the Risk Management Association (RMA) in its “Annual Statement
Studies.”
•
Industry average statistics provided by the United States Bureau of the Census.
•
Population, budget, and other statistics on the State of California provided by the
California Department of Finance.
1
For example, assume Company A receives a new order for $1,000 worth of its products, and the raw materials going
into those products cost it $700. In order to fill the order, Company A will have to purchase the $700 in raw materials
to make those goods from another company (Company B). That $700 becomes new business for Company B, and it
will have to purchase some amount from its supplier (Company C) so it can fill the order from Company A. Then,
Company C will have to purchase materials from its supplier (Company D) to fill the order from Company B—and this
cycle could continue on. Furthermore, Companies A, B, C, etc. may have to employ more people to fill the orders they
receive (or have them work longer), and that results in additional wages for new/existing employees. These employees
will now have more money to spend for their personal use, and their purchases create new orders for a variety of
businesses within the area.
9
•
Consumer Price Index statistics provided by the United States Bureau of Labor
Statistics.
•
Consumer spending patterns for the Western states provided by the United States
Bureau of the Census.
•
Labor market information provided by the California Employment Development
Department’s Labor Market Information.
Industry Average Financial Statistics
Industry average financial estimates were based on the following North American
Industry Classification Code System (NAICS):

Growers: Nursery and Tree Production (NAICS: 111421)
Wholesalers:
Flower, Nursery Stock, and Florists’ Supplies Merchant
Wholesalers (NAICS: 424930)
Retailers: Florists (NAICS: 453110)
Preliminary revenues and expenditures for cut flower industry growers, wholesalers, and
retail florists are based on published statistics from the Risk Management Association’s
(RMA) “Annual Statement Studies.” The RMA is a well respected publisher of industry
statistics using the NAICS. Additional financial statistics also were generated from the
United States Bureau of the Census.
Survey of Growers
Industry statistics formed the basis for preliminary financial models. Then, a survey was
conducted of a selected group of growers identified by the CCFC to validate the
appropriateness of these financial statistics in California.
Responses were then used to adjust the industry statistics to what would be appropriate
for California. In all cases, the industry averages were adjusted downward to make the
economic impact analysis as conservative as possible.
10
FINDINGS OF THE ANALYSES
The findings of this study are presented in five sections: Computation of Total
Expenditures Used in the Analyses, Economic Impact of All Sectors of the Cut Flower
Industry, Economic Impact of Growers Only, Possible Diffusion of Labor Income
Spending, and Possible Uses for Incremental Business Taxes Created. Tabled data is
presented at the end of this Summary Report.
Computation of Total Expenditures Used in the Analyses
Expenditure estimates for growers, wholesalers, and retail florists were developed based
primarily on data from the Risk Management Association (RMA). The reasons for
relying mainly on this source are that RMA is an independent organization not affiliated
with any particular industry, and it provides information on revenues, operating expenses,
and asset size. None of the other sources provided detailed estimates of operating
expenses and assets.
The statistics from RMA were used to divide growers, wholesalers, and retail florists into
small, medium, and large business categories. Asset sizes were used to delineate the
sizes of the businesses.
The revenue statistics reported by RMA were for 2006, so they were adjusted to estimate
2007 dollar values. The 2007 revenue estimates were further adjusted to approximate
California sales. The California numbers were divided by national numbers based on
Bureau of the Census statistics for 2002, and those percentages were applied to the RMA
statistics.
Cost percentages are based on RMA averages for 2006 and 2004. These were expressed
as percentages of revenues. The average percentages were then multiplied by the revenue
estimates to arrive at the cost estimates. These cost percentages were then validated
using a telephone survey of selected growers.
Total Expenses were adjusted downward to reflect the possible out-migration of some
dollars for purchases of costs of goods and operating expenses, and for the possible
uniqueness in the California marketplace. To compute dollar expenditures, the average
revenues for small, medium, and large growers, wholesalers, and retail florists were
estimated. Based on survey responses, the industry averages for growers were reduced
by 25.06% for small growers, 25.22% for medium size growers, and 31.79% for large
growers. This is considered an extremely conservative estimate of revenues since
California sales tend to exceed national averages for this industry. These discount
percentages were then applied to wholesalers and retail florists to ensure that the
computations were conservative.
11
According to the CCFC, the numbers of small, medium, and large growers in Santa
Barbara County were 17, 3, and 14 respectively. The total numbers of wholesalers and
retailers in the county were 3 and 7 respectively.
Accordingly, total expenses in the county were $298,901,893.
Economic Impact of the Cut Flower Industry in Santa Barbara
County
Economic impact analyses were conducted for the total of growers, wholesalers, and
retailer florists in the cut flower industry. It is important to note that these projections
are based on annual expenditures, which means that this impact is what is expected to
occur each year that such spending occurs.
The Output, Employment, Labor Income, and Indirect Business Taxes for the total
industry are presented in Table One. As previously indicated, growers, wholesalers, and
retail florists spent more than $298.9 million in the county.
The overall Output, or the amount of overall business activity created, is projected to total
nearly $770.7 million within the county. This includes the direct spending by the
businesses (“Direct”), the amount of additional business activity created by that spending
(“Indirect”), and the amount of additional business activity created by people’s spending
caused by the incremental labor income (“Induced”). As previously indicated, this is the
best measure of economic impact.
More than an additional 7,410 people are expected to be employed as a result of the
spending by these businesses. More than one-third of this (42.7%) is the direct result of
grower, wholesaler, and retailer expenditures, and 57.3% will be caused by spending
resulting from increased labor income.
Labor Income resulting from the additional people employed and current employees
earning more is projected to be nearly $339.5 million. About 41.8% of this income is the
direct result of spending by businesses, while 58.2% is caused by labor spending. How
these funds are likely to be spent based on consumer purchasing patterns is described
later in this Summary Report.
Finally, more than $31.4 million in additional business taxes will be created from the
increased business activity caused by these growers, wholesalers, and retailers. These are
tax dollars generated from businesses which benefit from the heightened economic
activity and the increased employment. As is described later in this Summary Report,
these tax dollars can be used for programs that further benefit the communities within the
Santa Barbara County.
12
Economic Impact of Growers Only in Santa Barbara County
Economic impact analyses were conducted for only the cut flower growers in the county.
It is important to note that these projections are based on annual expenditures, which
means that this impact is what is expected to occur each year that such spending
occurs.
The Output, Employment, Labor Income, and Indirect Business Taxes for growers only
are presented in Table Two. Growers spent more than $254.5 million in the county.
The overall Output, or the amount of overall business activity created, is projected to total
more than $648.3 million within the county. This includes the direct spending by the
growers (“Direct”), the amount of additional business activity created by that spending
(“Indirect”), and the amount of additional business activity created by people’s spending
caused by the incremental labor income (“Induced”).
More than an additional 6,180 people are expected to be employed as a result of the
spending by these growers. Nearly half of this (42.8%) of this is the direct result of
grower expenditures, and 57.2% will be caused by spending resulting from increased
labor income.
Labor Income resulting from the additional people employed and current employees
earning more is projected to be more than $286.1 million. About 42.5% of this income is
the direct result of spending by growers, while 57.5% is caused by labor spending. How
these funds are likely to be spent based on consumer purchasing patterns is described
later in this Summary Report.
Finally, nearly $21.1 million in additional business taxes will be created from the
increased business activity caused by cut flower growers in the county. These are tax
dollars generated from businesses which benefit from the heightened economic activity
and the increased employment. As is described later in this Summary Report, these tax
dollars can be used for programs that further benefit the communities within Santa
Barbara County.
Possible Diffusion of Labor Income Spending
The economic activity created by these cut flower growers, wholesalers, and retail florists
results in additional labor income. This is derived from the increased economic activity
that both generate new employment and additional employment for those already
employed. As previously indicated, the total incremental Labor Income is projected to be
nearly $339.5 million.
Consumer purchasing patterns as reported by the United States Bureau of the Census for
the western states was used to compute how the additional $339.5 million could be spent.
13
This puts into perspective how the additional income can benefit a wide range of
economic sectors within the county.
As shown below and in Table Three, significant spending occurs in numerous sectors.
The largest percentages of increased spending are for housing (including household
operating expenditures), transportation, food, and entertainment. These are provided in
total and by growers.
Diffusion of Spending
Total
Dollar
Expenditures
Growers
Dollar
Expenditures
Food at home
Food away from home
Shelter
Utilities, fuels, and public services
Household operations
Housekeeping supplies
Household furnishings and equipment
Apparel and services
Transportation
Medical services
Drugs
Medical supplies
Entertainment
Personal care products and services
Reading
Education
Personal insurance and pensions
Miscellaneous
Other (including Savings)
Total
$18,156,917
$14,481,261
$58,362,621
$15,047,538
$4,700,103
$3,238,078
$11,397,622
$10,167,256
$51,829,837
$4,221,342
$2,362,922
$540,538
$15,186,534
$3,207,190
$797,937
$4,767,027
$29,801,642
$24,015,315
$67,171,153
$339,452,830
$15,304,811
$12,206,531
$49,194,967
$12,683,857
$3,961,807
$2,729,438
$9,607,273
$8,570,174
$43,688,359
$3,558,249
$1,991,752
$455,629
$12,801,019
$2,703,402
$672,596
$4,018,218
$25,120,372
$20,242,967
$56,619,846
$286,131,267
Possible Uses for Incremental Business Taxes Created
To further illustrate how the local cut flower growers, wholesalers, and retail florists
impact the county, the indirect business taxes generated from the increased economic
activity were evaluated in relation to the 2007-08 State Budget.
It is, of course, unknown as to how the more than $31.4 million in incremental tax dollars
from growers, wholesalers, and retail florists are actually used. However, the percentages
of selected line-item budget expenses that these tax dollars could pay for are presented
below. In cases where the percentage exceeds 100%, the taxes generated by the
expenditures of the businesses in the cut flower industry would pay for more than the
total line-item budget category.
14
Santa Barbara County Budget
Agriculture & Cooperation Extension
Fire
Housing & Community Development
Parks
Public Health
Public Works
Sheriff
Social Services
Total
Percent Pay
of Budget*
Growers
Percent Pay
of Budget*
1641.68%
1220.31%
4325.21%
721.10%
280.26%
1494.43%
55.98%
279.17%
1100.68%
818.17%
2899.88%
483.47%
187.90%
1001.96%
37.53%
187.17%
*If percent exceeds 100.0%, it indicates the taxes could pay more than the Budget.
These examples only illustrate the significance of the more than $38.3 million in
additional tax dollars generated by the increased economic activity caused by cut flower
growers, wholesalers, and retail florists. Whether used for these or other purposes, the
tax dollars could help the State to pay for a significant amount of services and programs
within the county.
15
SUMMARY AND CONCLUSIONS
Based on the analyses conducted, the following summary points and conclusions appear
to be warranted:
•
Cut flower growers, wholesalers, and retail florists spent a combined total of more
than $298.9 million in 2007. Of every dollar these businesses generate in
revenue, they return more than 92 cents to the county’s economy.

The total economic impact in terms of business activity created by cut flower
growers’, wholesalers’, and retail florists’ expenditures in the county is nearly
$770.7 million. This equates to more than $2.1 million per day for every day of
the year. Growers alone create nearly $1.8 million per day in economic impact.
Shown below is the impact this has each sector on an average daily basis:
Sector
Manufacturing
Wholesaling
Retailing
Real Estate
Administrative
Education
Health
Other
Farming
Federal
State and local
Total
Daily Total
$197,264
$145,177
$147,491
$275,725
$239,753
$20,772
$11,935
$89,232
$22,383
$62,184
$58,296
$708,615
$34,522
$98,074
$2,111,423
Growers
Daily Total
$167,344
$48,025
$95,049
$234,750
$194,973
$15,956
$10,134
$76,051
$18,241
$52,366
$48,211
$707,487
$29,586
$77,993
$1,776,166
To put this amount of money into perspective, if it were given to the people of
Santa Barbara County, every person would receive more than $1,810. Of this,
more than $1,520 would come from grower contributions.

The amount of money generated for additional labor—money that goes to
people—averages more than $930,010 per day, and more than $783,920 of that is
grower generated.
To put this amount of money into perspective, it equates to more than $1,600 per
person in the entire county’s labor force whether they are employed or not.
16
•
The economic activities of cut flower growers, wholesalers, and retail florists
create more than 7,410 jobs in the county. Growers alone create more than 6,180
jobs.
To put this into perspective, this accounts for about 3.5% of Santa Barbara’s
entire civilian labor force in 2007. If these jobs were not created, the number of
unemployed in the county could grow as much as 80.6%.
•
The economic activities of cut flower growers, wholesalers, and retail florists also
generate more than $31.4 million in additional taxes--or about $86,160 every day
of the year. Growers alone generate nearly $57,770 in taxes per day. These tax
dollars help fund programs within the three counties.
Overall, cut flower growers, wholesalers, and retail florists have a significant economic
impact on Santa Barbara County. Their operations generate business activity in a wide
variety of economic sectors. In turn, this creates jobs, results in additional income for
residents of the three counties, and creates additional tax dollars from the increased
business activity that can be used to fund programs for the communities.
17
TABLE ONE: TOTAL IMPACT FOR SANTA BARBARA
COUNTY
Output
Manufacturing
Wholesaling
Retailing
Real Estate
Administrative
Education
Health
Other
Farming
Federal
State and local
Total
Direct
Indirect
Induced
Total
$0
$31,802,951
$12,581,092
$0
$0
$0
$0
$0
$0
$0
$0
$254,517,850
$0
$0
$298,901,893
$2,876,398
$1,474,958
$833,976
$2,532,936
$5,576,759
$877,024
$15,540
$470
$389,622
$316,296
$1,577,550
$1,492,262
$191,591
$140,370
$18,295,752
$69,124,918
$19,711,724
$40,419,267
$98,106,712
$81,933,231
$6,704,581
$4,340,687
$32,569,231
$7,780,277
$22,380,715
$19,700,475
$2,634,361
$12,408,911
$35,656,477
$453,471,568
$72,001,316
$52,989,633
$53,834,335
$100,639,648
$87,509,990
$7,581,604
$4,356,227
$32,569,702
$8,169,900
$22,697,011
$21,278,025
$258,644,474
$12,600,502
$35,796,847
$770,669,213
Direct
Indirect
Induced
Total
0
220
298
0
0
0
0
0
0
0
0
2,648
0
0
3,166
8
10
9
17
40
15
0
0
3
6
10
46
1
1
167
212
136
570
499
646
114
86
353
83
393
221
30
168
567
4,079
221
366
876
516
686
129
86
353
86
399
231
2,725
169
568
7,412
Employment
Manufacturing
Wholesaling
Retailing
Real Estate
Administrative
Education
Health
Other
Farming
Federal
State and local
Total
18
Labor Income
Manufacturing
Wholesaling
Retailing
Real Estate
Administrative
Education
Health
Other
Farming
Federal
State and local
Total
Direct
Indirect
Induced
Total
$0
$13,543,889
$6,510,082
$0
$0
$0
$0
$0
$0
$0
$0
$121,712,774
$0
$0
$141,766,745
$538,913
$628,139
$326,674
$569,931
$2,447,575
$464,221
$8,331
$186
$141,789
$119,967
$596,744
$1,201,302
$49,274
$50,470
$7,143,515
$15,671,677
$8,394,612
$17,677,332
$23,722,651
$39,272,544
$3,595,573
$2,495,970
$18,724,661
$2,643,562
$8,521,018
$7,846,604
$686,808
$11,298,809
$29,990,750
$190,542,570
$16,210,590
$22,566,639
$24,514,088
$24,292,582
$41,720,119
$4,059,794
$2,504,301
$18,724,846
$2,785,351
$8,640,985
$8,443,348
$123,600,884
$11,348,083
$30,041,221
$339,452,830
Direct
Indirect
Induced
Total
$0
$5,234,239
$1,684,623
$0
$0
$0
$0
$0
$0
$0
$0
$3,475,325
$0
$0
$10,394,186
$18,132
$242,753
$54,920
$251,340
$114,233
$12,852
$129
$4
$8,702
$23,366
$69,883
$18,004
$779
$35
$815,131
$570,812
$3,244,223
$4,790,338
$6,601,409
$1,730,391
$108,587
$34,873
$236,468
$362,547
$1,677,053
$821,955
$53,838
$5,890
$873
$20,239,256
$588,944
$8,721,215
$6,529,881
$6,852,749
$1,844,624
$121,438
$35,002
$236,472
$371,249
$1,700,419
$891,838
$3,547,167
$6,669
$908
$31,448,574
Indirect Business Taxes
Manufacturing
Wholesaling
Retailing
Real Estate
Administrative
Education
Health
Other
Farming
Federal
State and local
Total
19
TABLE TWO: TOTAL IMPACT FOR GROWERS ONLY IN
SANTA BARBARA COUNTY
Output
Manufacturing
Wholesaling
Retailing
Real Estate
Administrative
Education
Health
Other
Farming
Federal
State and local
Total
Direct
Indirect
Induced
Total
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$254,517,850
$0
$0
$254,517,850
$1,512,374
$688,864
$182,424
$968,023
$931,137
$102,390
$1,159
$91
$27,889
$52,165
$832,578
$1,470,745
$113,315
$54,065
$6,937,220
$59,568,098
$16,840,276
$34,510,528
$84,715,638
$70,234,175
$5,721,502
$3,697,804
$27,758,389
$6,629,927
$19,061,369
$16,764,585
$2,244,133
$10,685,723
$28,413,539
$386,845,687
$61,080,472
$17,529,140
$34,692,952
$85,683,662
$71,165,312
$5,823,892
$3,698,964
$27,758,480
$6,657,816
$19,113,534
$17,597,163
$258,232,728
$10,799,037
$28,467,604
$648,300,756
Direct
Indirect
Induced
Total
0
0
0
0
0
0
0
0
0
0
0
2,648
0
0
2,648
3
5
2
6
6
1
0
0
0
1
5
46
0
0
76
183
116
486
433
554
97
73
301
71
335
188
25
145
450
3,458
186
121
488
439
560
99
73
301
71
336
194
2,720
145
450
6,182
Employment
Manufacturing
Wholesaling
Retailing
Real Estate
Administrative
Education
Health
Other
Farming
Federal
State and local
Total
20
Labor Income
Manufacturing
Wholesaling
Retailing
Real Estate
Administrative
Education
Health
Other
Farming
Federal
State and local
Total
Direct
Indirect
Induced
Total
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$121,712,774
$0
$0
$121,712,774
$197,055
$293,366
$70,011
$202,508
$373,338
$46,778
$617
$36
$11,195
$20,023
$289,387
$1,194,083
$23,668
$19,439
$2,741,505
$13,549,495
$7,171,751
$15,098,463
$20,602,547
$33,782,960
$3,068,756
$2,126,724
$15,957,860
$2,253,024
$7,258,606
$6,679,129
$585,750
$9,743,772
$23,798,151
$161,676,988
$13,746,549
$7,465,117
$15,168,474
$20,805,055
$34,156,298
$3,115,534
$2,127,342
$15,957,897
$2,264,219
$7,278,629
$6,968,516
$123,492,608
$9,767,440
$23,817,590
$286,131,267
Direct
Indirect
Induced
Total
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$3,475,325
$0
$0
$3,475,325
$7,887
$113,376
$12,083
$102,268
$23,857
$2,519
$10
$1
$1,065
$4,109
$38,876
$17,695
$482
$13
$324,241
$491,066
$2,771,630
$4,093,959
$5,640,017
$1,477,168
$92,625
$29,626
$201,527
$308,927
$1,429,491
$697,855
$45,824
$4,988
$742
$17,285,445
$498,953
$2,885,006
$4,106,042
$5,742,285
$1,501,025
$95,144
$29,636
$201,528
$309,992
$1,433,600
$736,731
$3,538,844
$5,470
$756
$21,085,011
Indirect Business Taxes
Manufacturing
Wholesaling
Retailing
Real Estate
Administrative
Education
Health
Other
Farming
Federal
State and local
Total
21
TABLE THREE: POSSIBLE DIFFUSION OF LABOR
INCOME SPENDING
Diffusion of Spending
Total
Dollar
Expenditures
Growers
Dollar
Expenditures
Food at home
Food away from home
Shelter
Utilities, fuels, and public services
Household operations
Housekeeping supplies
Household furnishings and equipment
Apparel and services
Transportation
Medical services
Drugs
Medical supplies
Entertainment
Personal care products and services
Reading
Education
Personal insurance and pensions
Miscellaneous
Other (including Savings)
Total
$18,156,917
$14,481,261
$58,362,621
$15,047,538
$4,700,103
$3,238,078
$11,397,622
$10,167,256
$51,829,837
$4,221,342
$2,362,922
$540,538
$15,186,534
$3,207,190
$797,937
$4,767,027
$29,801,642
$24,015,315
$67,171,153
$339,452,830
$15,304,811
$12,206,531
$49,194,967
$12,683,857
$3,961,807
$2,729,438
$9,607,273
$8,570,174
$43,688,359
$3,558,249
$1,991,752
$455,629
$12,801,019
$2,703,402
$672,596
$4,018,218
$25,120,372
$20,242,967
$56,619,846
$286,131,267
22