1. business and industrial
2. manufacturing

The Economic Impact of Omaha
Children’s Museum on the City of
Omaha, 2006 - 2009
A Study Produced by Creighton University,
College of Business Administration
Dr. Anthony Hendrickson, Dean; and
Dr. Ernest Goss, MacAllister Chair
College of Business Administration
Creighton University
Omaha, NE 68178-0130
Voice (402) 280-4757
Fax: (402) 280-2172
Email: [email protected]
Email: [email protected]
June 2010
The Economic Impact of Omaha Children’s Museum on the
City of Omaha, 2006 - 2009
Preface
This study was completed at the request of Omaha Children’s Museum (OCM). The study was fully funded by
Creighton University’s College of Business Administration.
Creighton University College of Business seeks to develop women and men for others, a value central to our Jesuit
philosophy. Part of that process involves providing our students with guidelines for making ethically and morally
sound decisions during their educational experience at Creighton University. Ranked in the top 2 percent of business
schools in the world, the College of Business at Creighton University is helping students get to where they want to
go. From Nike internships to Ivy League school placements and study abroad opportunities in developing countries,
business is booming at Creighton.
Findings remain the sole property of the College of Business and OCM and may not be used without prior approval.
Any errors or mistatements contained in this study are solely the responsibility of the author. A copy of the principal
investigator’s biography is provided in Appendix G. Please address all correspondence to:
Dr. Ernest Goss, Principal Investigator
MacAllister Chair
College of Business Administration
Creighton University
Omaha, NE 68178-0130
(402) 280-4757
Fax: (402) 280-2172
Email: [email protected]
Research Assistants
Melanie A. Lotspeich, Goss & Associates, [email protected]
Keithen Weeces, Goss & Associates, [email protected]
Photography
All photographs contained in this study were provided by Omaha Children’s Museum.
LOREM IPSUM |
The Economic Impact of Omaha Children’s Museum on the
City of Omaha, 2006 - 2009
Table of Contents
1
Executive Summary
4
2
Omaha Children’s Museum: A Brief History
6
3
Omaha Children’s Museum as a Tourist Attraction
9
OCM Attendance . . . . . . . . . . . . . . . . . . . . . . . . 9
OCM Compared to Other Nebraska Tourist Destinations . . . . . . 12
OCM Volunteers . . . . . . . . . . . . . . . . . . . . . . . . 14
4
The Economic Impacts of OCM
15
Total Impacts . . . . . . . . . . . . . . . . . . . . . . . . . 16
Impacts by Industry . . . . . . . . . . . . . . . . . . . . . . 17
Tax Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Appendices
19
Appendix A: Impact of OCM on Omaha . . . . . . . . . . . . . .19
Appendix B: Types of Economic Impacts . . . . . . . . . . . . . 20
Appendix C: The Multiplier Effect . . . . . . . . . . . . . . . . 22
Appendix D: Choosing a Technique to Measure Impacts . . . . . . 23
Appendix E: IMPLAN Multipliers Used in This Study . . . . . . . . 24
Appendix F: References . . . . . . . . . . . . . . . . . . . . . 25
Appendix G: Biography, Ernie Goss . . . . . . . . . . . . . . . .26
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1
Executive
Summary
General
•
Omaha Children’s Museum (OCM) attendance has
grown steadily for the past five years and continues
to grow.
•
Visitors from Nebraska and Iowa account for 91.5
percent of all OCM attendees.
•
From 2006 - 2009, volunteer numbers nearly
doubled and the hours of volunteer service increased
at a steady rate.
•
As a Nebraska arts and cultural tourist destination,
OCM is second only to Henry Doorly Zoo in terms
of annual attendance.
•
From 2006 - 2009, OCM and its visitors spent
more than $126.6 million in Omaha. It is estimated
that this spending generated the following impacts
for the Omaha economy1:
To State & Local Tax Collections
•
From 2006 - 2009, it is estimated that OCM
generated almost $16.1 million in Nebraska and
Omaha tax collections.
To the Labor Force
•
From 2006 - 2009, spending due to OCM
operations supported an average of 520 jobs with a
total payroll of approximately $57 million.
To the Overall Economy
•
Spending by OCM patrons from 2006 - 2009
added an estimated $176.5 million to the Omaha
economy. Approximately $75 million of this impact
represented spillover impacts.2
1 This study was completed using the Implan Input-Output methodol-
ogy explained in Appendices B - D. It is assumed that similar impacts,
adjusted for inflation, will result in future years.
2 $176.5 million (total impact) minus $101.5 million (direct impact).
Spillover impacts represent ‘ripple’ impacts in related businesses
as OCM dollars are re-spent in the community. For example, OCM
vendors will spend a portion of their earnings in the retail sector. This
spending creates sales, earnings and jobs, termed spillover impacts, for
business in the retail trade sector.
5
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To non-OCM Related Industries (spillovers) from 2006 - 2009
•
More than 266 of Omaha’s 274 industries experienced impacts from OCM. For example, for the area’s real
estate industry, OCM spending supported 13.7 jobs, $1.1 million in wages and salaries and $7 million in sales.
To State & Local Long-Term Economic Growth
•
The presence of OCM increases the attractiveness of the community and encourages the startup and/or
relocation of other businesses in the state.
Table 1 summarizes the monetary impact of OCM on local and state economies from 2006 - 2009. By supporting
an average of 520 jobs each year, OCM’s total monetary impact on Omaha and the state economy is estimated to be
$176.5 million and accounts for over $16.1 million in total tax collections.
Table 1: Summary of Monetary Impacts of OCM on Omaha and State Economies, 2010 Dollars
3
2006
2007
2008
2009
Total
Total or overall
$56,754,600
$40,395,748
$39,482,816
$39,901,948
$176,535,112
Wages & salaries
$18,497,012
$13,000,815
$12,711,000
$12,762,762
$56,971,589
Number of year round jobs
Total tax collections
672.6
474.7
463.9
467.2
519.6
$5,206,194
$3,685,979
$3,577,252
$3,614,414
$16,083,839
Source: Implan Multiplier System
The assumptions and methodologies used to produce these estimates are contained in
accompanying Appendices A - D.
3 2006 impacts include significant capital spending for exhibit renovation at OCM.
5
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2
Omaha
Children’s
Museum: A
Brief History4
Levin, Hiller and Hawthorn envisioned a bigger, more
permanent home for the museum and their programs.
After arranging a more formal organization, the Omaha
Children’s Council was even more motivated when they
received their first donation from Susan Buffett. With
her generous contribution of $25,000, Omaha Children’s
Museum was able to officially open its doors in 1977 at
the City/County Connector Building.
Located in the heart of the downtown area, Omaha
Children’s Museum (OCM) is the city’s primary
participatory museum, dedicated to engaging the
imagination and creating excitement about learning
among children ages 0 - 8 years. As one of the
country’s largest children’s museums, it is difficult to
imagine that it began in the back of a station wagon
34 years ago.
In 1974, Karen Levin recognized that Omaha
lacked a program or museum that provided children
with art and creative
After just eight months, the
education. As a result,
museum founders quickly
During the 1990s, OCM took on a variety
Levin, and colleagues
realized that with all of the
Betty Hiller and Jane
of challenges, from raising $2.7 million in
school groups visiting on field
Ford Hawthorn, packed
trips, as well as visits by parents
donations coupled with a $4.47 million
the trunk of Levin’s
and children, the need for space
station wagon and
capital campaign, to taking on an enormous
was becoming a pressing issue.
traveled around Omaha
Soon they moved to a location
renovation project.
to bring hands-on art
at 18th Street and St. Mary’s
experiences to children
Avenue.
in a way that the city
With this move came much more space, a paid staff
hadn’t seen before. Together they offered about 20
and the opportunity to become a more significant
art activities and creative experiences to children at
organization in the community.
community centers, libraries, schools and malls.
With their traveling art program such a success,
4 Provided courtesy of Omaha Children’s Museum.
During the 1990s, OCM took on a variety of challenges,
starting with raising $2.7 million in donations followed
by a $4.47 million capital campaign. When the museum
7
outgrew its first permanent space, renovation work
began on the McFayden Ford building at 20th and St.
Mary’s to accommodate its first traveling exhibition with
a robotic T-Rex. Soon after, additional renovations led
to the site becoming the museum’s permanent home.
By the end of the 1990s, not only had OCM tackled a
wealth of challenges, they also opened the 5,000-squarefoot Charlie Campbell Science and Technology Center,
giant entryway aquariums and played host to a number
of successful exhibits.
In 2007, OCM completed a $6.6 million renovation
of its permanent exhibits through the Building on
the Best Capital Campaign. This campaign signified
the museum’s importance to the community and its
commitment to early childhood development. Today,
the Omaha Children’s Museum ranks in the top 15%
of children’s museums nationally. The museum features
over 45,000 square feet of exhibit space, with permanent
exhibits including:
• Charlie Campbell Science & Technology Center
• Creative Arts Center
• Imagination Playground (early childhood area)
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In addition to its permanent exhibits, Omaha Children’s
Museum offers educational programs, traveling
exhibitions, field trips, outreach programs, summer
camps and birthday parties.
Through the past years, Omaha Children’s Museum
has grown into a place enjoyed by children, adults and
families where learning and fun are wrapped up into one
exciting package.
Importantly, OCM has become an integral element
of Omaha’s portfolio of tourist attractions. As such,
OCM encourages Omaha residents to spend in the
local area, stimulates non-Omaha visitor spending in the
community and increases the overall attractiveness of the
city to new businesses and economic development.
By the end of the 1990s, not only
had OCM tackled a wealth of
challenges, they also opened the
5,000-square-foot Charlie Campbell
Science and Technology Center,
giant entryway aquariums and
played host to a number of successful
exhibits.
7
8
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Statistics of the World’s Children’s Museums5
•
The first children’s museum opened in 1899 in Brooklyn, New York
•
30 million children and families visit children’s museums annually
•
Children’s museums can be found in 22 countries
•
Sixty-five percent of children’s museums are located in urban areas
•
Thirty-five percent of children’s museums are flagships in downtown revitalization projects
•
Approximately 38 children’s museums existed in 1975; 80 more were created between 1976 - 1990; 125 were
opened since 1990; finally, 78 children’s museums are in the planning phase
•
Forty-nine percent run after-school programs
Statistics of Omaha Children’s Museum
•
Omaha Children’s Museum was named Omaha’s Non-Profit Organization of the Year in 2010 by the Greater
Omaha Chamber.
•
The museum is in the top 15% of children’s museums worldwide based on size with over 45,000 square feet of
interactive exhibits.
•
Omaha Children’s Museum revenue is currently comprised of 65% Earned Revenue (Admissions, Membership,
Programs) and 35% Contributed Revenue (Sponsorships, Donations, Grants).
•
The museum currently has 6,200 member families (approximately 20,000 people).
•
Omaha Children’s Museum exhibits and most programs are targeted to early childhood (ages 0-8).
•
Omaha Children’s Museum provides a rotating schedule of traveling exhibitions to the community. Many of
these blockbuster exhibits are rented from third parties, however, the museum has recently begun to create its
own exhibits starting with the popular, Construction Zone.
•
Interactive learning through play, as provided at Omaha Children’s Museum, provides cognitive, emotional,
physical and social developmental benefits. Research ties play to reading readiness and school success.
5 The data in this section is provided by the Association of Children’s
Museums. www.childrensmuseums.org
9
3
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Omaha
Children’s
Museum
as a Tourist
Attraction
OCM Attendance
Table 2 lists OCM attendance from July 2005 to
June of 2009. As of April 8, 2010, 168,222 visitors
had enjoyed OCM for 281 days in fiscal 2010. Of
course, this number does not include data for most
of April, all of May and June 2010.
The Creative Arts Center encourages children to be
creative and explore their “inner artist.” This area
features a theater, face painting, costumes and a stage for
performances. The Artist-in-Residence studio is an area
where kids can learn about different types of art from
community artists, sculptors and more.
Table 2: OCM Attendance by Fiscal Year6, 2006 - 2009
Date
Children
Fiscal 20066, 7/1/05 - 6/30/06
Fiscal 2007, 7/1/06 - 6/30/07
Fiscal 2008, 7/1/07 - 6/30/08
Fiscal 2009, 7/1/08 - 6/30/09
Total Attendance
119,019
81,558
200,577
-
149,248
112,547
261,795
30.5%
150,699
107,465
258,164
(-1.4%)
159,974
111,368
271,342
5.1%
Source: Omaha Children’s Museum, 2010
6 Fiscal years begin July 1 and end June 30.
Overall % Increase/
Decrease
Adults
9
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As it is presented in Figure 1, while
the most significant rise in attendance
occurred from 2006 to 2007, a small dip
during the 2007 - 2008 season is not
discouraging, seeing as how numbers
are back on the rise for the remainder
of 2010.Table 3 lists attendance by
state from 2006 - 2010. Nebraska and
Iowa account for 91.5 percent of OCM
attendance. As indicated, outside of
Nebraska, the highest share of visitors
comes from Iowa, followed by Kansas
and Wisconsin.
Perhaps the most surprising attendance
numbers were those from Wisconsin.
Despite not sharing a border with
Nebraska, visitors from Wisconsin
constituted 1.6 percent of OCM
attendance between 2006 and 2010.
Given the higher likelihood that visitors
from more distant locations will spend
greater amounts in Omaha for each
visit and attend other area venues, the
economic development importance
of these OCM attendees is quite
significant. OCM visitors came from
across the nation. 8,456 traveled from
California and another 5,163 came from
Texas from 2006 to 2010.
Figure 2 offers an alternative view of the
data in Table 3 showing the number of
OCM visitors by zip code. With this
Figure 1: OCM Attendance by Fiscal Year, 2006 - 2010
Table 3: Top 10 Attendance by State, 2006 - 20107,
State
Attendance
Percentage
Nebraska
920,891
79.4%
Iowa
139,853
12.1%
Kansas
36,809
3.2%
Wisconsin
18,317
1.6%
Missouri
13,603
1.2%
California
8,456
0.7%
South Dakota
7,583
0.7%
Texas
5,163
0.4%
Colorado
4,792
0.4%
Minnesota
4,633
0.4%
Source: Omaha Children’s Museum, 2010
7 2010 data is partial year attendance.
11
LOREM IPSUM | 11
representation, it is clear that the majority of OCM visitors come from the Midwest. Outside of Nebraska, the area
(or zip code) with the most visitors was that of 51503, or Council Bluffs, Iowa. This Council Bluffs zip code alone
Visitors from Council Bluffs, by spending in Nebraska, add to state and local tax coffers.
accounted for 20,019 visitors from 2006 - 2010. Visitors from Council Bluffs, by spending in Nebraska, add to state
and local tax coffers.
Figure 2: Attendance by State, 2006 - 2010
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OCM Compared to Other Nebraska Tourist Destinations
In Table 4 is listed the ranking of Nebraska’s arts and cultural tourist destinations between 2005 and 2007. As
presented, OCM is second only to Henry Doorly Zoo in terms of annual attendance at Nebraska’s arts and cultural
tourist destinations.
Table 4: Nebraska’s Top Arts and Cultural Destinations, 2005-2007
City
Attraction
2005
2006
2007
2008
1
Omaha
Henry Doorly Zoo
1,347,853
1,283,647
1,335,170
1,388,014
2
Omaha
Omaha Children’s Museum
200,577
261,795
258,164
265,131
3
Omaha
Orpheum Theater
4
Omaha
Joslyn Art Museum
n/a
n/a
219,689
97,008
239,334
224,425
201,021
163,000
5
Lincoln
Lincoln Children’s Zoo
145,000
145,000
155,000
155,000
6
Omaha
Lauritzen Gardens - Omaha’s Botanical
Center and Kenefick Park
106,961
108,857
132,973
146,070
7
Omaha
Holland Performing Arts Center
n/a
n/a
131,129
n/a
8
Lincoln
9
Ashland
Lincoln Children’s Museum
141,000
128,000
129,423
129,950
Strategic Air & Space Museum
179,528
175,937
124,129
120,000
10
Omaha
Durham Museum
104,019
117,446
118,464
125,088
11
Lincoln
Lied Center for Performing Arts
120,635
150,000
110,967
n/a
12
Omaha
Omaha Community Playhouse
103,791
92,593
90,555
n/a
13
Omaha
The Rose Theater
56,795
80,333
76,112
57,225
14
Omaha
El Museo Latino
58,900
69,764
72,374
72,761
15
Hastings
Hastings Museum / Lied Super Screen
Theatre / J.M. McDonald Planetarium
70,885
70,076
66,949
84,727
Source: Nebraska Department of Tourism
13
LOREM IPSUM | 13
Table 5: Nebraska’s Top Tourist Destinations, 2005 - 2007 8
City
Attraction
2005
2006
2007
2008
1
Omaha
2
Ashland
Henry Doorly Zoo
1,347,853
1,283,647
1,335,170
1,388,014
Mahoney State Park
1,047,900
1,050,600
n/a
1,085,003
3
Raymond
Branched Oak State Recreation Area
650,000
800,000
1,247,656
1,178,289
4
Omaha
Old Market
5
Fremont
Fremont Lakes State Recreation Area
n/a
n/a
900,000
n/a
827,000
827,000
840,000
853,710
6
Ogallala
Lake McConaughy and Lake Ogallala
State Recreation Areas
800,000
808,000
811,600
748,229
7
Ponca
Ponca State Park
615,550
697,732
749,250
745,300
8
Louisville
Platte River State Park
545,035
598,397
625,003
681,371
9
Louisville
Louisville Lakes State Recreation Area
595,000
580,000
600,000
535,900
10
Alma
Harlan County Lake
424,394
491,545
514,925
509,446
Omaha
Wehrspann Lake at Chalco Hills
Recreation Area
400,000
400,000
480,000
n/a
12
Crawford
Fort Robinson State Park
361,230
359,708
460,154
309,458
13
Lincoln
Pioneers Park
450,000
440,000
440,000
n/a
14
Burwell
Calamus Reservoir State Recreation Area
435,470
498,872
406,266
264,116
15
Omaha
Amazing Pizza Machine
n/a
400,000
400,000
n/a
16
Lincoln
Pawnee State Recreation Area
n/a
300,000
318,660
219,304
17
Lincoln
Haymarket Park
432,730
330,000
310,000
n/a
18
Venice
Two Rivers State Recreation Area
272,806
223,548
265,567
256,278
19
Omaha
Omaha Children’s Museum
200,577
261,795
258,164
265,131
Crofton
Lewis and Clark Lake State Recreation
Area
270,000
350,000
221,873
263,365
Omaha
Orpheum Theater
n/a
n/a
219,689
97,008
11
20
21
Source: Nebraska Department of Tourism
8 Data for OCM, contrary to that for many other venues, is an
actual head count and not an estimate.
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14
OCM Volunteers9
This shows the need for more volunteers each year most likely due to the growing number of exhibits the
museum brings to the community.
From 2006 to 2009, volunteer numbers nearly doubled
and the hours of volunteer service increased at a steady
rate, as shown in Table 6.
An OCM volunteer is anyone, aside from paid OCM
employees, who donates their time and efforts to OCMrelated activities. Examples of volunteer duties may
include greeting visitors, assisting with administrative
duties, answering visitor questions, maintenance and
interacting with children.
This indicates a growing volunteer engagement in
museum efforts, exhibits and an overall sense of
involvement by museum supporters. Additionally, hours
of service rose in tandem with the rise of volunteers.
Table 6: Summary of Volunteers and Hours of Service, Year Over Year
Year
Number of
Volunteers
% Change
Hrs. of
Service
%
Change
Special Event
Volunteer Hours
%
Change
2006
43
-
452
-
111
-
2007
70
62.8%
2,811
521.9%
899
709.9%
2008
86
22.9%
5,363
90.8%
712
(- 20.8)%
2009
84
(- 2.3)%
6,688
24.7%
2134
199.7%
Source: Omaha Children’s Museum, 2010
9 Does not include contribution of hours by OCM Board Members or Rainbow Connectors Guild.
15
LOREM IPSUM | 15
4
The Economic
Impacts of
OCM
Table 7 presents overall spending by OCM visitors
from 2006 to 2009.10 The most spending occurred in
2006, due to significant OCM exhibitor spending. This
spending includes the annual expenditures of OCM plus
spending by OCM visitors outside of the museum.
Non-OCM spending listed in Table 7 are based on
data from the Nebraska Department of Economic
Development (NDED). According to the NDED, the
average size of a party visiting the state is 2.4 persons
that stays 2.2 days. The NDED estimates that of total
spending, 1 percent is for air travel, 12 percent is for arts,
entertainment & recreation, 26 percent is for eating and
drinking, 26 percent is for gasoline service stations, 5
percent is for grocery & convenience stores, 19 percent
for hotels and motels and 11 percent is for retail sales.
Applying this NDED data to OCM visitor data
generates spending data in Table 7. Note that data in
Table 7 were adjusted for OCM visitor patterns.
OCM attendees who stay the night in Omaha will pay
for a hotel room, food at restaurants as well as for other
miscellaneous retail items.
Table 7: 2006 - 2009 Spending by OCM Visitors
Industry
Air Transportation
2006
2007
2008
2009
$174,937
$164,767
$153,523
$165,527
Arts, Entertainment & Recreation
$5,164,286
$3,816,663
$3,897,027
$4,133,631
Eating & Drinking
$11,189,286
$8,269,436
$8,443,559
$8,956,201
Gasoline Service Stations
$11,189,286
$8,269,436
$8,443,559
$8,956,201
Grocery & Convenience Stores
$2,151,786
$1,590,276
$1,623,761
$1,722,346
Hotels & Motels
$3,323,794
$3,130,573
$2,916,935
$3,145,006
Retail Sales
$4,733,929
$3,498,607
$3,572,275
$3,789,162
$37,927,304
$28,739,758
$29,050,639
$30,868,074
Total
10 It is assumed that 50 percent of visitors from Omaha would
have visited the sites outside the city had they not attended OCM.
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16
Total Impacts
Based on spending listed in Table 7 and using inputoutput multipliers, the study provides sales, earnings
and job impacts in addition to estimating the impact
of OCM on state and local tax collections. Basically
Input-Output multipliers show how spending changes
initiated in one industry are filtered throughout the local
economy.
For each dollar generated by OCM via construction
and economic development activities, there are direct
effects, for the initial spending, plus the spillover impacts
into the rest of the regional economy. Input-Output
multiplier models are the most frequently used type of
analysis tool for economic impact assessment. Inputoutput analysis assumes that each sec­tor purchases
products and services from other sectors and then sells
its output to other sectors and/or final consumers.
The multiplier system used is Implan. This is a widely
used and accepted methodology. A more detailed
Table 8: Estimated Impact of OCM Visitor Spending on Omaha Economy
2006 - 2009
Wages & Salaries
$56,971,592
Sales or Output
$176,535,120
Average Yearly Jobs Supported
State & Local Taxes
520
$16,083,839
Source: Implan Multiplier System
discussion of the multipliers used is provided in the
accompanying appendices.
Table 8 lists total impacts generated from the initial
spending listed in Table 7. Wages and salaries include
the total payroll costs (including benefits) of workers
who are paid by employers, as well as benefits such as
health/life insurance, retirement payments and non-cash
compensation. Sales or output represents the value of
total production.
17
LOREM IPSUM | 17
Impacts by Industry
Table 9 lists impacts by industry. More than 266
industries and countless companies in Omaha
experienced increases in revenues as a result of OCM.
For instance, Nebraska’s Wholesale Trade Industry
benefited from OCM and its visitors’ spending even
though there were no OCM dollars spent directly in this
industry.
According to estimates, 2006 - 2009 OCM and its
visitors’ spending created over 4.9 jobs, $1,660,301 in
wages and salaries and $4,219,292 in sales for this one
industry. Even the area’s hospitals experienced positive
impacts. From 2006 to 2009, it is estimated that OCM
and its visitors’ spending supported 4.4 jobs, $975,376
in wages/salaries and $2,025,134 in revenues for area
hospitals.
Table 9: Impact of OCM and its Visitors’ Spending on Omaha by Industry, 2006 - 2009
Industry
Accounting, tax preparation and payroll services
Jobs
Wages &
Salaries
Output
2.4
$501,142
$1,007,696
Employment services
6.5
$752,297
$1,089,504
Food services and drinking places
199
$14,042,566
$44,226,628
Hotels and motels, including casino hotels
42.9
$4,608,479
$14,062,662
Insurance carriers
2.9
$816,780
$3,456,112
Management of companies and enterprises
2.7
$1,264,571
$2,842,117
Management, scientific, and technical consulting services
2.3
$675,747
$1,428,338
Nursing and residential care facilities
2.2
$309,816
$438,100
Hospitals and clinics
3.6
$1,093,015
$1,878,340
Other amusement and recreation industries
41.3
$3,397,814
$19,195,854
Private hospitals
4.4
$975,376
$2,025,134
Real estate establishments
13.7
$1,100,706
$6,977,415
Retail Stores - Food and beverage
17.9
$1,698,610
$2,876,555
Retail Stores - Gasoline stations
19.7
$1,972,419
$6,696,959
Retail Stores - General merchandise
2.5
$238,889
$558,344
Retail Stores - Miscellaneous
45.3
$3,834,681
$7,562,687
Securities, commodity contracts, and related activities
2.3
$393,366
$1,238,307
Services to buildings and dwellings
5.6
$488,262
$1,188,051
US Postal Service
4.4
$693,767
$885,434
Wholesale trade businesses
4.9
$1,660,301
$4,219,292
All Other Industries
93.4
$16,452,988
$52,681,591
519.9
$56,971,592
$176,535,120
Total
Source: Implan Input-Output Multipliers
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18
Tax Impacts
Table 10 lists the estimated impact from 2006-2009
OCM spending on state and local tax collections. While
OCM is a not-for-profit organization and does not pay
a corporate income tax, its independent contractors and
their employees pay state taxes and many firms doing
OCM business pay corporate income taxes.11
Furthermore, many companies that receive indirect
OCM spending pay corporate taxes. It is estimated
that OCM and its visitors’ spending generated nearly
$16.1 million from 2006-2009 in state and local tax
collections.
Table 10: Impact of OCM on State and Local Tax Collections
Description
Corporate Income Tax
Personal Income Tax
2006
2007
2008
2009
Total
$104,672
$56,343
$54,790
$55,260
$271,065
$581,791
$411,181
$375,150
$376,678
$1,744,800
$1,145,157
$833,418
$815,905
$831,081
$3,625,561
$873,333
$611,699
$644,148
$649,671
$2,778,851
Other Taxes
$2,501,241
$1,773,338
$1,687,258
$1,701,724
$7,663,562
Total State and Local Tax
$5,206,194
$3,685,979
$3,577,251
$3,614,414
$16,083,839
Property Tax
Sales Tax
11 Compensation includes fringe benefits and FICA taxes paid by the
employer on behalf of the employee.
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17
A
Appendix
Impact of OCM on Omaha
OCM revenues are more powerful than revenues of
firms that deal in intra-state commerce in terms of job
and income creation since a high proportion of these
revenues are “new” to the area and are not offset by
reduced spending in other area industries. For example,
increased spending in Omaha’s real estate sector may be
offset by reduced spending in Omaha’s retail industry.
This is not the case with OCM since a high share of
attendees come from outside the state. Even dollars
spent by Omaha residents at OCM are very important
since a large share of them would likely have been
otherwise spent on entertainment and recreational
activities outside the city.
From an economic perspective, these sources represent
new dollars to the state’s economy and are thus very
powerful in generating jobs and income for the region.
Businesses and organizations funded primarily by dollars
generated from within the state have less economic
impact than OCM spending since a high proportion of
these dollars are diverted from other industries in the
state.
Economic impacts identified in this study are shortrun in nature and represent annual, recurring events.
Indicators are provided for long run, more intangible
impacts on the regional economy such as workforce
development and knowledge enhancement, but no
attempt is made to assign dollar values.
In terms of long-term but less measurable impacts, the
presence of OCM increases the attractiveness of the
community and encourages the startup and/or relocation
of other businesses in the state. By contributing to an
area’s attractiveness via access to art, entertainment
and education, OCM influences community growth
in non-tourist related industries. Moreover, by making
the nation more aware of Nebraska and Omaha, OCM
contributes to the overall growth of state and local
economic activity.
Table A.1 summarizes the impact OCM has on the City
of Omaha.
Table A.1: Impact of OCM on Omaha
Economic
Community Attractiveness
Direct involvement
Wages paid to employees
Increases sense of collective identity; Builds
social capital; Learning opportunities
Audience participation
Tourists spend money at local
venues
Builds community pride; Personal interaction of
diverse individuals
Philanthropic and government support
Brings new dollars to the comMatching funds provide a multiple of the initial
munity from area non-professional
gift or grant
users of the facility
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20
B
Induced Economic Impacts
Appendix
Types of Economic Impacts
Table B.1 depicts examples of the flow of funds in to
and out of Omaha as a result of OCM. As indicated, the
total impact is the sum of direct (blue arrows), indirect
(yellow arrows) and induced (pink arrows) impacts
minus leakages (black arrows). Leakages represent OCM
spending outside of Omaha. Input-output multiplier
systems are used to estimate each of the impacts in
Figure B.1 by industry.
Direct Economic Impacts
Induced impacts in the region occur as the initial
spending feeds back to industries in the region when
workers in the area purchase additional output from
local firms in a second round of spending. That is, OCM
increases overall income and population, which produces
another round of increased spending adding to sales,
earnings and jobs for the area. Examples of induced
economic impacts are color coded pink in Figure B.1.
Table B.1 lists estimated impacts for each additional
$1,000,000 in OCM spending. It is assumed that the
additional revenue is not produced by reduced spending
at other establishments in the area. In terms of spillover,
or indirect plus induced impacts, data indicate that for
the Omaha area, each $1,000,000 of OCM spending
generates another $826,503 across other industries
with $38,134 for insurance carriers, $119,047 for real
estate establishments, and $29,214 for wholesale trade
businesses.
Spending by OCM visitors has direct economic effects
on their local economies by making expenditures for
goods and services and by paying employee salaries. The
most obvious direct expenditures are payment of
wages to workers employed by OCM. In addition, Table B.1: Direct, Indirect and Induced Impacts of $1,000,000 in
expenditures by business visitors to OCM produce OCM spending (2010 dollars)
Direct
Indirect Induced
Total
direct impacts on the region, affecting primarily
the wholesale and retail trade industries. Direct
Total
$1,000,000 $369,963 $456,540 $1,826,503
economic impacts are color coded blue in Figure
Wages & Salaries $512,610 $113,737 $146,995 $773,342
B.1.
Jobs
Indirect Economic Impacts
OCM also produces indirect economic effects on
the area economy. OCM generates indirect effects
by increasing: (a) the number of firms drawn to a
community, (b) the volume of deposits in local financial
institutions and, (c) economic development. Examples
of indirect economic impacts are color coded yellow on
Figure B.1.
15.4
2.7
3.7
Source: Implan Multiplier System
21.8
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LOREM IPSUM | 21
Figure B.1: Diagram of OCM Impacts
Business
Investment From
Outside Omaha
OCM Visitors
From Outside
Omaha
Business
Visitors
Spillover Impacts:
* Wholesale suppliers
* Banking & Finance
Direct Impacts:
* OCM Salaries
* Retail Purchases
∗ Retail Purchases by
Visitors
Direct Impacts:
Induced Impacts:
* Added Wages
* Added Rents
* Added Pro ts
* Construc on
Companies
Construction
And
Renovation of Areas
Retention of
Area
Residents & Firms
Leakages:
* Spending by Firms and
Individuals Outside
of Area
Total Impact = Direct + Indirect + Induced - Leakages
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22
C
Appendix
The Multiplier Effect
When OCM employees spend their salaries within
the community, this spending filters through the local
economy, causing increased overall spending greater
than the initial spending. The impact of this re-spending
is known as the multiplier effect. Economic impacts
that take place outside the local economy, for example
employee spending in Kansas City or Des Moines, are
called leakages and reduce the multiplier and overall
impacts. They are excluded when estimating regional
economic impacts.
While the direct effects of OCM can be measured by a
straightforward methodology, the indirect and induced
effects of OCM spending must be estimated using
regional multipliers. Community characteristics that
affect leakages, and consequently the multiplier include:
Location. Distance to suppliers affects the willingness
to purchase locally. For example, if Nebraska firms are
unable to provide supplies at competitive prices, and
there are alternative suppliers in Des Moines who are
more price competitive, then the museum will be more
likely to spend outside the community. This results in
greater leakages, lower multipliers and smaller impacts.
Population size. A larger population provides more
opportunities for companies and workers to purchase
locally. Larger population areas are associated with fewer
leakages and larger multipliers. Thus, in general, tourist
dollars flowing into Omaha will have larger impacts than
the same level of dollars flowing into Beatrice or South
Sioux City.
Clustering. A community will gain more if the inputs
required by local industries for production match local
resources and are purchased locally. Thus, over time,
as new firms are created to match the requirements
of OCM, leakages will be fewer, resulting in larger
multipliers and impacts. This issue is at the heart of
economic development, amplifying the impacts of the
clustering of museum investment and jobs.
As Omaha gains more and more of OCM investment
and jobs, educators and training institutions become
more proficient and focused on meeting the needs of
the industry. Furthermore, suppliers unique to OCM
are more likely to locate in close proximity to these
organizations. This not only expands income and jobs
in Omaha, it increases the size of multipliers related to
OCM.
The next section discusses the selection of an estimation
technique to measure the direct, indirect and induced
impacts of OCM on the community and region.
While the direct effects of a museum
can be measured by a straighforward
methodology, the indirect and induced
effects of OCM spending must be
estimated using regional multipliers.
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LOREM IPSUM | 23
D
Appendix
Choosing a Technique to Measure Impacts
The three most common types of impact models are
economic base, econometric and input-output (I-O).
Many types of public and private-sector decisions
require an evaluation of probable regional effects. Since
important impacts are often economic, this requirement
has created a need for regional economic impact
models. Two of the three impact models have inherent
disadvantages that markedly reduce their viability for
estimating the impact of retail spending on the economy.
Economic Base Model. The economic base model
divides the economy into two sectors--the local/
service sector and the export sector. The economic base
multiplier is an average for all the economy making it
impossible to distinguish, for example, the impact of
retail spending from that of a new manufacturing plant.
Econometric Models. Econometric models have two
major weaknesses. First, the time series data used in
constructing econometric models are often unavailable
at the state and metropolitan area level, thus precluding
county-level analysis. This is especially true for rural
counties and for counties with small populations.
Second, econometric models are costly to build and
maintain.
Input-Output (I-O) Models. I-O models are the most
frequently used types of analysis tool for economic
impact assessment. Input-output is a simple general
equilibrium approach based on an accounting system of
injections and leakages. Input-output analysis assumes
that each sector purchases supplies from other sectors
and then sells its output to other sectors and/or final
consumers.
IMPLAN and RIMS (Regional InputOutput Modeling System) are two of the
most widely used mulitplier models.
Historically, high development costs precluded the
extensive use of I-O models in regional impact analysis.
However, with the advent of “ready-made” multipliers
produced by third parties, such as the U.S. Forestry
Service, I-O multipliers became a much more viable
option for performing impact analysis.
All purely non-survey techniques or “ready-made”
multipliers take a national I-O table as a first
approximation of regional inter-industry relationships.
The national table is then made region specific by
removing those input requirements that are not
produced in the region. This study uses the most widely
recognized “ready-made” multiplier system, IMPLAN
Multipliers.
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24
E
Appendix
IMPLAN Multipliers Used in This Study
The Forestry Service of the U.S. Department of
Agriculture developed the IMPLAN multipliers in the
1980s (U.S. Forest Service, 1985). For very populous
areas, IMPLAN divides the economy into approximately
500 industrial sectors. Industries that do not exist in
the region are automatically eliminated during user
construction of the model (e.g. coal mining in Omaha).
IMPLAN uses an industry-based methodology to
derive its input-out coefficients and multipliers. Primary
sources for data are County Business Patterns data and
Bureau of Economic Analysis data.
Researchers have used IMPLAN to estimate the impact
of changes in military spending on the Washington State
economy (Hughes, et. al, 1991).12 IMPLAN and RIMS
(Regional Input-Output Modeling System) are two of
the most widely used multiplier models. IMPLAN has
been compared to other multiplier systems and found to
produce reliable estimates (Richman and Schwer, 1993).
Likewise, Crihfield and Campbell (1991), in estimating
the impacts of opening an automobile assembly plant,
concluded that IMPLAN’s outcomes are, on balance,
somewhat more accurate than RIMS.
12 Data and software: Minnesota IMPLAN Group, Inc., IMPLAN
System (data and software), 1725 Tower Drive West, Suite 140, Stillwater, MN 55082 www.implan.com
IMPLAN multipliers possess the following advantages
over other I-O Multiplier Systems:
1. Price changes are accounted for in the creation of the
multipliers.
2. Employment increases or decreases are assumed to
produce immediate in or out-migration.
3. Multipliers are produced at reasonable costs by third
party vendors. In this case, the Minnesota IMPLAN
Group produces the multiplier system used in this study.
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F
Appendix
References
Bartik, T. Who benefits from state and local economic development policies? Kalamazoo, MI: W.E. Upjohn
Institute, 1991.
Crihfield, J. B. and Harrison S. Campbell. “Evaluating Alternative Regional Planning Models.” Growth and
Change, 22, 1991, pp. 1-16.
Gooding, E.P. and S.J. Weiss. “Estimation Of Differential Employment Multiplier in a Small Regional Economy,”
Research Report No. 37, 1966, Federal Research Bank of Boston, Boston, MA.
Goss, E.P. and G.S. Vozikis. “High Tech Manufacturing: Firm Size, Industry and Population Density,” Small
Business Economics, Vol. 6(3), 1994, pp. 291-297.
Hughes, D., Holland, D. and P. Wandschneider, “The Impact of Changes in Military Expenditures on the
Washington State Economy,” The Review of Regional Studies, Vol. 21(3), 1991, pp. 221-234.
Leontief, W. The Structure of the American Economy, 1919-1929. New York: Oxford University Press, 1941.
Richman, D.S. and R. K. Schwer. “A Systematic Comparison of the REMI and IMPLAN Models: The Case of
Southern Nevada.” Review of Regional Studies, Vol. 23 (2), 1993, pp. 143-161.
U.S. Forestry Service. 1991 IMPLAN Multiplier Reports, Minnesota IMPLAN Group, Inc., 1995, Stillwater, MN.
26 | Enicaper ficaed susta nondin is es nonim et dolore
26
G
Association-Nebraska. He also serves on the Board of
Directors of Mosaic, Inc.
Appendix
Biography, Ernie Goss
Ernie Goss is currently
the MacAllister Chair and
Professor of Economics
at Creighton University
in Omaha, Nebraska.
He received his Ph.D.
in economics from the
University of Tennessee
in 1983. He was a
visiting scholar with the
Congressional Budget Office
for 2003-04 and in the Fall
of 2005, the Nebraska Attorney General appointed
Goss to head a task force examining gasoline pricing
in the state. He was also a faculty research fellow with
the National Aeronautics and Space Administration
(NASA) in 1991 and 1992.
He has published over eighty research studies focusing
primarily on economic forecasting and on the statistical
analysis of business and economic data. His book,
Changing Attitudes toward Economic Reform during
the Yeltsin Era was published by Praeger Press in 2003
and his book Governing Fortune: Casino Gambling in
America was published by the University of Michigan
Press in 2007.
He is editor of Economic Trends, an economics
newsletter published three times per year. He is the
past president of the Omaha Association of Business
Economics, and the National Purchasing Management
To gauge regional economic conditions, Goss conducts a
monthly survey of bank CEOs in rural areas of 9 states
and two monthly surveys of businesses in 12 states.
Results from the three surveys are carried in over 100
newspapers, 20-30 radio stations and scores of other
media outlets each month. Recent citations appeared
in the Wall Street Journal, Business Week, Forbes, and
scores of regional newspapers such as the Denver Post,
the Kansas City Star and the Minneapolis Pioneer Press.
Research Assistants
Melanie Lotspeich has worked on a
variety of economic impact studies
with Dr. Goss since 2003. Melanie’s
duties have included photography,
copy writing, editing and desktop
publishing.
Melanie graduated from Creighton
University in 2002 with a B.A.
in Journalism and a minor in
Philosophy. She is currently a
Communications and Events Coordinator at the Greater
Omaha Chamber.
Keith Weeces is currently in his first
Summer working with Dr. Goss.
Keith assists in the research, as well
as, the use of the IMPLAN InputOutput Multiplier System for this
and various other projects. He is
currently an undergraduate student
at Creighton University working
toward a B.S.B.A in Economics and
Finance.