August 26, 2013 | Vol. 94, No. 200

Committee hears results of economic impact study

HURLEY — During a Iron County Mining Impact Committee meeting Wednesday, John Sendra presented an economic impact study in relation to the proposed Gogebic Taconite iron mine in Upson, Wis.

The purpose of the study, according to Sendra, was to analyze the potential economic impact of the G-Tac mine in Iron County, as well as show impact in a 12-county area. The 12 counties include Iron, Ashland, Douglas, Bayfield, Washburn, Sawyer, Price, Oneida, Vilas and Forest counties in Wisconsin, and Gogebic and Iron counties in Michigan.

The study includes the number of jobs that could be created in the regional, as well as the overall economic impact and overall tax implications on the area.

“This thing is really chalked full of information,” Sendra said.

Data was collected from a NorthStar Economic report from 2011, the University of Wisconsin Extension offices, the G-Tac office and a report from the Iron County Economic Development Corporation.

The economic impact was determined by direct, indirect and induced effects. Direct effect is initial spending, occurring from operations of the mine, and indirect effect is buying goods and services from suppliers, and suppliers spending the money on payroll and other materials.

Induced effect is caused by changes in household spending and additional employment.

The scope of the economic impact also includes the annual overall economic impact on the 12-county region, the annual number of direct and indirect jobs supported in the region and the overall tax impact, including state and local property, income and sales taxes.

According to the study, the economic impact of the mine would consist of a production level of 8 million tons, totaling $604 million.

There would also be 2,834 long-term jobs, including 700 direct mining jobs at an average labor of $82,984 per year, and an annual state and local tax revenue, totaling $17.15 million.

The short-term economic impact of constructing the mine over a two-year period would be 3,175 jobs each year, a total economic impact of $2 billion and $20.6 million in state and local tax revenues.

An economic score card was also provided for the 12-county region, comparing it to Wisconsin and the United States.

With population, the region is declining, while Wisconsin and the U.S. are both rising. Median age in the region is 45.6. Wisconsin’s median age is 38.2 and the nation’s is 36.5.

The percentage of high school graduates in the region is 89.6, above Wisconsin at 89 percent and the U.S. at 84.6, but the percentage of college graduates is, on average, 6 percent lower than Wisconsin and the U.S.

Median earnings is $4-5,000 less in the area, with an average earning of $24,328 per year.

The unemployment rate is 9.8 percent, with the U.S. at 9.6 and Wisconsin at 8.1. Growth in business establishments in the area is described as “stagnant,” while Wisconsin’s is “moderate” and the nation’s is “strong.”

Finally, the region has been “losing” jobs over the last decade, with the nation and state have been “gaining.”

In addition to focusing on the 12-county region surrounding the proposed mine site, the study also focuses on Iron County specifically, as well as mining at a national level. The study also included examples of mining economic impacts in Minnesota and Michigan.

Demographic trends were selected for Iron and Ashland counties in the study, including population trends, ages of population, general housing trends, household and family income, unemployment trends and school enrollments.

According to Sendra, the study also discusses specific impacts to the region, including potential impacts on means of transportation and school enrollments.

“This is our backyard and we have to see how this would affect us,” Sendra said. “We had to do our homework.”

The committee thanked Sendra for working on the report, and presenting at the meeting.

For more information on the report, or the Iron County Mining Impact Committee, call the Iron County clerk’s office at 715-561-3375.