Ferry Fare Study
by the
Economic Development Council
June 2007
Revision History
|
June, 2007 |
Original Version |
|
Table of Contents
Shift
to Commuter Fare Classification
“Residents”
Carry More of the Cost Burden
Ferry
Trends – Possible Conclusions
Resident
vs. Non-residents ridership
Population
Trends – Possible Conclusions
Ridership
declined while population grew
Sales
& H/M Tax Trends – The Data
Sales
& H/M Tax Trends – Possible Conclusions
Retail
Sales Category Analysis
Cost
of Living Trends – The Data
Cost
of Living Trends – Possible Conclusions
Home
Prices versus Income Analysis
Wages
versus Retail Sales Analysis
Tourism
– Possible Conclusions
Appendix
A: CPI Indexes used to adjust for
inflation
Appendix
B: Additional Commuter Fare data
Appendix
C: Hotel/Motel Tax Analysis
Appendix
D: Retail Sales Category Definitions
Appendix
E: Ferry Classification Description
List of Charts
Chart 1: Percent Increase Ridership vs. Population vs. Fares: 2000 to 2006.................................. 6
Chart 2: Percent Increase of Ferry Fares from 2000 to 2006.......................................................... 9
Chart 3: WSF Anacortes to San Juan Routes 1996 to 2000......................................................... 10
Chart 4: Vehicles above 20 ft Ridership per island....................................................................... 13
Chart 5: Vehicles above 20 ft and Other Ridership Annual Totals.............................................. 13
Chart 6: Projected County Population: 2000 to 2006................................................................... 14
Chart 7: Percent Increase Ridership vs. Population vs. Fares: 2000 to 2006................................ 15
Chart 8: SJC Retail Sales 1996 to 2006........................................................................................ 17
Chart 9: SJC Sales Tax Distribution 1997 to 2006....................................................................... 18
Chart 10: SJC Lodging Tax Distribution 2000 to 2006................................................................ 18
Chart 11: Retail Sales by Category............................................................................................... 19
Chart 12: Retail Sales by Category Minus the Top Three............................................................. 20
Chart 13: Retail Trade Sales by Sub-Category............................................................................. 21
Chart 14: Median Home Price 1995 to 2005................................................................................ 24
Chart 15: Comparative Cost of Living Indexes, Jan 2007............................................................ 25
Chart 16: Median Income 1990 to 2006....................................................................................... 26
Chart 17: SJC Total Income by Category 1990 to 2004............................................................... 27
Chart 18: Number of Wage Earners vs. Proprietors 1990 to 2004................................................ 28
Chart 19: Average Earnings per Job in 2000 dollars 1969 to 2004............................................... 29
Chart 20: Earned Income by Place of Residence vs.
Place of Work 1969 to 2004...................... 30
Chart 21: Median Income versus Median Home Price 1995 to 2005........................................... 31
Chart 22: Tourism Spending 1992 to 2005................................................................................... 33
Chart 23: Adjusted Tourism Spending Percent Increase from 2000............................................ 34
List of Tables
Table 1: Q1 Assumption: 2000 to 2006 Percent Increase............................................................... 7
Table 2: Percent Increase of Ferry Ridership from 2000, for each Quarter.................................. 10
Table 3: Percent Increase of Ferry
Ridership from 2000, annual per type................................... 11
Table 4: "Commuter" Ridership as percent of Total, 1996 to 2006,
by type................................ 11
Table 5: Percent Commuter Ridership 2000 and 2006................................................................. 12
Table 6: Residents vs Non-Residents Percent Increase of Ridership........................................... 12
Table 7: Percent Increase of Quarterly Retail Sales 2000 to 2006................................................ 17
Table 8: Residents vs Non-Residents Percent Increase Retail Sales............................................. 21
Table 9: Retail Sales, Q1 Assumption Analysis............................................................................ 22
Table 10: Retail Sales, Q1 Assumption Analysis – Percent increase
2000-2006.......................... 22
Table 11: Lodging Tax by Quarter,
2000 to 2006........................................................................ 23
Table 12: Lodging Tax by Quater – Percent increase 2000-2006................................................. 23
Table 13: Consumer Price
Differential, Orcas Island Versus Mainland, Feb 2007..................... 25
Table 14: Percent Increase by Income Category 2000 to 2004..................................................... 27
Table 15: Increase in Wage Earners vs. Proprietors 2000 to 2004................................................ 28
Table 16: Annual Retail Sales versus Total Earnings 2000 to 2004.............................................. 32
Table 17: Consumer Price Index 1989-2006................................................................................. 35
Table 18: "Commuter" Ridership as percent of Total, quarterly
2000 to 2006, by type............... 35
Table 19: Percent Increase Ridership Per Island: Total and Commuter by
type, 2000 to 2006... 36
Table 20: Lodging Tax, Q1 Assumption Analysis........................................................................ 36
Table 21: Lodging Tax, Q1 Assumption Analysis – Percent increase 2000-2006........................ 37
Ferry Fare Study – Purpose
The purpose of this study is
to gather economic data which will allow community leaders in
Ferry Fare Study – Objective
The objective of this study
is to provide “reliable facts” upon which our community leaders can construct
logical arguments about the economic impact of ferry fares on the San Juan
County economy, and thus on the Washington State Economy. It is our intent that the “reliable facts”
are un-biased to any foregone conclusion or argument.
For each topic area, we
first present “The Data”, the data in its raw form. The presentation of this data has been
provided to indicate trends, and hopefully enhances, rather than confuses, the
understanding of the data.
The second section for each
topic area includes conclusions that we’ve drawn from this area’s “The Data”
section, and possibly data from preceding areas. This section is where the “reliable facts”
are structured into some thoughts and conclusions. This is the first place where there is an
opportunity (un-intended for sure) for personal bias to influence the content. We hope that our process of wide review and
discussion by the diversity represented by the EDC membership has minimized the
potential for unintended bias.
Where we made assumptions in
our analysis, we have attempted to flag them as such. With any data, there are always caveats on
how the data was generated. We have
attempted to identify significant caveats that we felt might influence the
interpretation of such data. Finally, we
have proposed several conclusions based upon our analysis. However, the raw data is provided to allow
the reader to draw their own conclusions.
Executive Summary
Chart 1: Percent Increase Ridership vs. Population vs. Fares: 2000 to 2006
Source: WA State Office of
Financial
(WSF\Charts\Change 00-06.xls)
(*) All dollar amounts within the Executive Summary section have been adjusted for inflation.
The Data 2000 to 2006
- San Juan County Population has increased 11.53%
- WSF Fares have increased 57-100+% (*)
- WSF San Juan Routes Total Ridership has decreased 7.06%
- San Juan County Retail Sales has increased 8.96% (*)
- SJ County Hotel/Motel Tax has decreased 0.37% (*)
Analysis 2000 to 2006
We have identified 3 classifications of riders of the WSF San Juan routes: year-round residents, part-time residents, and visitors.
· Year-round residents – this classification includes individuals who live year round within the county. These folks are the majority of wage earners and/or business proprietors, but do include some “Non-Earners” (such as retirees). This classification typically includes those individuals with families (one or more children) that are the core of a local community.
· Part-time residents – this classification includes individuals who live part-time in the county and part-time elsewhere. These folks include those that have second homes in the county or are transient workers working the tourist or growing season. Certainly, the transient workers contribute to the “wage earners” type of statistics for the county. This classification certainly includes some “Non-Earner” retirees.
·
Visitors – this classification includes the
classic tourists and friends and family members visiting the county to enjoy
the natural resources that make
In the following analysis, we lump the Part-time residents and the Visitors in together in the “Non-Resident” category and place the Year-round residents in the “Resident” category.
Q1 Assumption
Let’s assume that Q1 statistics primarily represent the activities of the “Residents” category of WSF riders. Q1 is the winter months, Part-time residents are typically off-island, and the number of “Visitors” is minimal. Thus, economic indicators are those related to “Resident” activities.
If we then multiply Q1 statistics by 4 to get an annual number, let’s assume this annual number again represents the contributions of the “Residents” category but for the entire year. Thus, if we take the annualized Q1 number and subtract it from actual Annual numbers, then this should provide us with the contribution of “Non-Residents”.
[Caveat: Yes, these assumptions are imprecise by the nature of their generalization. However, we feel that it is this generalization that points out the trends that are of interest.]
Table 1: Q1 Assumption: 2000 to 2006 Percent Increase
Source: WA State Ferries &
WA State Department of Revenue,
(SJC Ferry Statistics.xls & SJC Qtrly Retail Sales 00-06.xls)
|
|
Annual WSF Ridership |
Annual SJC Retail Sales |
|
Residents |
-2.74% |
+13.53% (*) |
|
Non-Residents |
-14.96% |
-4.44% (*) |
Shift to Commuter Fare Classification
While overall Ridership has decreased 7.06% from 2000 to 2006, Commuter Ridership has increased 33.13%. Clearly, this reflects a shift by Residents to Commuter discount fares attempting to minimize the impact of fare increases upon their cost of living.
It is interesting that the number of commuter ridership increases Q1 to Q2 and again Q2 to Q3. This must be partially resulting from the addition of the Part-time residents. Doubly interesting is that Q3 is the quarter incurring the highest ferry fares (Peak Rates) and has consistently been the quarter with the greatest number of commuter ridership. Tourists most likely don’t utilize commuter ridership in any major way and thus, must indicate even more Year-round residents and Part-time residents striving to avoid the “peak rates” of Q3.
“Residents” Carry More of the Cost Burden
While overall Ridership has decreased 7.06% from 2000 to 2006 and “Resident” Ridership has decreased 2.74%, using our Q1 Assumption the percent of Total Ridership attributed to “Residents” has increased 2.98%. One might conclude that “Residents” are incurring the greatest impact of the ferry fare increases as they account for a greater percentage of Total Ridership.
Included in the 13.53% increase in Annual SJC Retail Sales by Residents is the increased cost of goods due to increased transportation costs. Precise price differentials between mainland and island goods are not well documented at this time and are an area for future study. However, increased transportation costs, in the form of higher Ferry Fares, clearly contributes directly and indirectly to the higher cost of living for island residents.
It seems logical to assume that, if visitor ridership continues to decline, permanent and part time residents will have to assume an increasing burden in the effort to eliminate the deficit in the Anacortes-San Juan ridershed. Additionally, with reduced income from visitors, local workers and business people have less means to pay increasing ferry costs.
To fully understand
the cost implications to “Residents” and the revenue implications to WSF, one
would need to consider the fare increase, the percent of total ridership
increase, as well as the reduction in revenue resulting from the increase usage
of commuter fares.
SJC Tourism is down
From our “Q1 Assumption” table above, Tourist Ridership on
WSF is down 14.96 % and tourist Retail Spending
is down 4.44% 2006 compared to 2000. Adjusted for inflation, according to Dean
Runyan, SJC tourism spending has increased 0.84% 2000 to 2005 as compared to WA
State overall tourism spending which has increased 8.39% 2000 to 2005.
Clearly, there has been some negative affect (or affects) impacting Tourism in
This raises the
question of what is the “price elasticity” with respect to Ferry Fare rates and
Tourist Ridership?
Ferry Fares
Chart 2: Percent Increase of Ferry Fares from 2000 to 2006
Source: WA State Ferries; (WFS\FareCharts\Percent Increase.gif)
- Ferry fares increased 57.75-107.84% from 2000 to 2006 (depending upon category).
- The “Peak” fares category in general increased the most from 2000 to 2006 (75.29-107.84%).
- In
the “Non-Peak” fare category,
- For the “Commuter” fare category, Interisland (77.28%) increased the most from 2000 to 2006.
We are using 2000 to 2006 since that is after the elimination
of the Motor Vehicle Excise Tax (MVET) that was helping fund the WSF and thus,
when
Ferry Ridership
Chart 3: WSF Anacortes to
Source: WA State Ferries; (WSF\Charts\Total Ridership Annual.gif)
Total Ridership is down 7.06% (2006 as compared to 2000). 2000 is the year of the largest total ridership.
Table 2: Percent Increase of Ferry Ridership from 2000, for each Quarter
Source: WA State Ferries, (SJC Ferry Statistics.xls)
|
Percent Increase
by qtr |
2006-2000 |
2005-2000 |
2004-2000 |
2003-2000 |
2002-2000 |
2001-2000 |
|
q1 |
-2.74% |
-1.40% |
-0.26% |
-1.00% |
0.71% |
2.74% |
|
q2 |
-6.21% |
-6.47% |
-4.29% |
-4.78% |
-4.04% |
-2.44% |
|
q3 |
-5.74% |
-7.81% |
-5.65% |
-2.61% |
-0.46% |
-1.48% |
|
q4 |
-14.07% |
-5.57% |
-2.76% |
-3.53% |
-0.70% |
0.14% |
As you can see in the table above, the Total Ridership on a quarterly comparison basis 2006-2000 is:
- Q1 down 2.74%
- Q2 down 6.21%
- Q3 down 5.74%
- Q4 down 14.07%
The relative quarterly declines (2001, 2002, 2003, 2004, 2005, 2006) are not consistent over the years (I.E. some years Q2/3 have greater declines than Q1/Q4) and might just represent ridership variability between years.
Table 3: Percent Increase of Ferry Ridership from 2000, annual per type
Source: WA State Ferries; (SJC Ferry Statistics.xls)
|
|
Vehicle
Percent Increase |
Passenger
Percent Increase |
Total Percent Increase |
|
2001 |
0.05% |
-1.42% |
-0.73% |
|
2002 |
0.60% |
-2.91% |
-1.25% |
|
2003 |
-2.08% |
-3.99% |
-3.09% |
|
2004 |
-1.86% |
-5.63% |
-3.86% |
|
2005 |
-3.06% |
-8.59% |
-5.99% |
|
2006 |
-2.94% |
-10.73% |
-7.06% |
Total “Passenger” ridership is down 10.73% (2006 as compared to 2000).
Total “Vehicle” ridership is down 2.94% (2006 as compared to 2000), which includes a slight increase in 2006 as compared to 2005 of 0.12%.
Table 4: "Commuter" Ridership as percent of Total, 1996 to 2006, by type
Source: WA State Ferries; (SJC Ferry Statistics.xls)
|
|
Commuter
% of Total Vehicles |
Commuter
% of Total Passengers |
|
1996 |
31.30% |
12.84% |
|
1997 |
32.72% |
13.13% |
|
1998 |
32.37% |
12.86% |
|
1999 |
33.21% |
12.49% |
|
2000 |
32.67% |
12.41% |
|
2001 |
35.09% |
13.35% |
|
2002 |
40.15% |
16.46% |
|
2003 |
41.91% |
19.19% |
|
2004 |
44.81% |
21.05% |
|
2005 |
45.02% |
20.82% |
|
2006 |
44.73% |
18.80% |
Looking at the number of “Commuter” fare tickets used:
- For
“Vehicles”,
“Commuter” fares were 32.67% of total in 2000, but 44.81% in 2006. This is an increase of 12.06% 2006 over 2000. - For
“Passengers”,
“Commuter” fares were 12.41% of total in 2000, but 18.80% in 2006. This is an increase of 6.39% 2006 over 2000. The highest was actually in 2004 at 21.05% “Commuter” fares of total.
Ferry Trends – Possible Conclusions
Since 2000, there has clearly been a concerted effort to leverage the discounts represented by the Commuter Fares offered by WSF. The percent of total ridership attributed to Commuter tickets has increased:
Table 5: Percent Commuter Ridership 2000 and 2006
Source: WA State Ferries; (SJC Ferry Statistics.xls)
|
Vehicles |
2000 |
2006 |
|
Q1 Commuter % |
37.45% |
50.82% |
|
Q4 Commuter % |
38.78% |
49.95% |
|
Passengers |
|
|
|
Q1 Commuter % |
17.12% |
26.66% |
|
Q4 Commuter % |
16.10% |
16.87% |
This increase is clearly indicative of county residents attempting to reduce the impact of ferry fare increases upon their annual cost of living. Also, from 2000 to 2006, Vehicle percentages changed by 13.37% for Q1 and 11.17% for Q4. Interesting how these are close to the population increase of 11.53% (2000 to 2006).
Possible Conclusion: County residents responded to fare increases by shifting more and more to “Commuter Passes”, indicating that fare increases are impacting their cost of living.
Resident vs. Non-residents ridership
Table 6: Residents vs Non-Residents Percent Increase of Ridership
Source: WA State Ferries, (SJC Ferry Statistics.xls)
|
Percent
increase from
2000 to |
Resident
Ridership Increase |
Non-Resident
Ridership |
Resident
Vehicle Ridership |
Non-Resident
Vehicle Ridership |
Resident
Passenger Ridership |
Non-Resident
Passenger Ridership |
|
2001 |
2.74% |
-7.26% |
2.73% |
-8.62% |
2.76% |
-6.62% |
|
2002 |
0.71% |
-4.94% |
0.27% |
1.69% |
1.25% |
-8.06% |
|
2003 |
-1.00% |
-7.02% |
-0.12% |
-8.44% |
-2.09% |
-6.35% |
|
2004 |
-0.26% |
-10.61% |
0.43% |
-9.27% |
-1.11% |
-11.24% |
|
2005 |
-1.40% |
-14.59% |
-1.10% |
-9.34% |
-1.76% |
-17.06% |
|
2006 |
-2.74% |
-14.96% |
0.90% |
-14.66% |
-7.21% |
-15.10% |
Assumption: Q1 ridership represents county residents.
With the above assumption, the table above would indicate that non-residents account for less ridership in 2006 than they did in 2000 (down 14.96%).
Possible Conclusion:
If the assumption is valid, residents
have been carrying more and more of the burden of financing the WSF runs
between Anacortes and the
Vehicles >20 ft ridership
Chart 4: Vehicles above 20 ft Ridership per island
Source: WA State Ferris;
(WSF\Charts\Veh Above 20 ft per island.gif)
Chart 5: Vehicles above 20 ft and Other Ridership Annual Totals
Source: WA State Ferris; (WSF\Charts\Veh Above 20 and Other.gif)
Vehicles over 20 ft long Ridership hit its maximum in 2000, and then proceeded to decline by 7.88% (2000 to 2006). It is hard to say if this decline is in Commercial vehicles, or a reduction of private vehicles of over 20 ft in length (cars with trailers, etc). However, the overall category reduction is consistent with the overall ridership declining.
The “Other” category of fares [Description in Appendix E.] increased from 2000 to 2003 and then declined 2003 to 2006, with the end result 2006 to 2000 increasing just 1.76%.
Possible Conclusion: The reduction of large vehicles (by a count of 4952 out of 62,866 in 2000) would tend to indicate that there has been a slight reduction in Commercial vehicles. However, there is no way to determine precisely how many were Commercial vehicles versus private oversized vehicles.
Chart 6: Projected
Source: WA State Office of Financial Management; (OFM\Pop per island.xls)
The county population went from 14,077 in 2000 to 15,700 in 2006 (2006 number is an estimate by the WA State Office of Financial Management). This is an increase of 11.53% (2006 over 2000).
Population Trends – Possible Conclusions
Chart 7: Percent Increase Ridership vs. Population vs. Fares: 2000 to 2006
Source: WA State Office of Financial
(WSF\Charts\Change 00-06.xls)
Ridership declined while population grew
Total Ridership down 7.06% 2000 to 2006.
Population up 11.53% 2000 to 2006
So, population growth should have increased resident ridership by approx same percentage as population growth, since our growth was not simply by greater birth rate than death rate (I.E> not simply more children). So if we assume the growth population is of an equivalent mix to the existing population, then county resident ridership should have scaled with population growth.
However, one factor which can affect this, but can not be determined, is the break down between “full-time” residents and “part-time” residents. “Part-time” residents would include retired snow birds heading south in the winter, residents with only a second home in San Juan County, residents that declare San Juan County as their place of residence but who primarily work/live elsewhere, etc… This unknown could affect several of the statistical analysis within this study.
Suspected anomaly – Q4
2006 ridership down significantly beyond existing trend. Could be due to the shift between Commuter
books and Wave2Go Commuter system transition.
Or, it could be due to the bad weather experienced in Q4 2006 (two weeks
of sub-freezing weather with snow/ice on the ground). Only time will tell if
this is a new indicator.
Ref: Table 1 above.
If we look at Q1 & Q4 ridership (quarters with least non-residents impact), these have declined over the last three years while the county population grew. Q1 & Q4 ridership being the quarters best representing trends of county residents (least impacted by tourists).
Possible Conclusion: Residents have reduced their usage of WSF significantly, contributing to the overall decline in Ridership despite an 11.53% growth in county population.
Sales & H/M Tax Trends – The Data
Since 2000, both Sales and Hotel/Motel tax proceeds have increased.
Chart 8: SJC Retail Sales 1996 to 2006
Source: WA State Department of Revenue; (DOR\Charts\SJC Retail Sales 96-06.gif)
[Includes
Category “D” amount]
Retails sales has grown 26.66% from 2000 to 2006 (8.96% when adjusted for inflation)
Table 7: Percent Increase of Quarterly Retail Sales 2000 to 2006
Source: WA State Department of Revenue; (SJC Qtrly Retail Sales 00-06.xls)
|
|
Percent
Increase |
%
Increase adjusted for inflation |
|
2006Q1 -
2000Q1 |
31.98% |
13.53% |
|
2006Q2 -
2000Q2 |
25.05% |
7.57% |
|
2006Q3 -
2000Q3 |
24.25% |
6.88% |
|
2006Q4 -
2000Q4 |
27.26% |
9.47% |
Chart 9: SJC Sales Tax Distribution 1997 to 2006
Source: WA State Department of Revenue; (DOR\Charts\SJC Sales Tax 97-06.gif)
Sales Tax proceeds county-wide has grown 29.09% from 2000 to 2006 (11.04% when adjusted for inflation).
Chart 10: SJC Lodging Tax Distribution 2000 to 2006
Source: WA State Department of Revenue; (DOR\Charts\SJC Lodging Tax by biz qtr 00-06.gif)
Hotel/Motel tax proceeds county-wide has grown 15.82% from 2000 to 2006 (or 2.27% when adjusted for inflation).
Sales & H/M Tax Trends – Possible Conclusions
Retail Sales Category Analysis
Let’s look at the categories of Retail Sales tracked by the
WA State Department of Revenue and see if we can determine some of the drivers
in
Chart 11: Retail Sales by Category
Source: WA State Department of Revenue; (DOR\Charts\SJC Retail Sales by Category.gif)
[Excludes Category “D” amount]
As you can see above, the top 3 contributors to Retail Sales
in
- Construction: 14.26% increase
- Retail Trade: 10.62% increase
- Accommodations & Food Services: 0.21% increase
- Overall: 9.30% increase
Now, let’s look at the other 14 categories with a bit more detail.
Chart 12: Retail Sales by Category Minus the Top Three
Source: WA State Department of Revenue; (DOR\Charts\SJC Retail Sales by Category -3.gif)
The total of these 14 categories when adjusted for inflation
(2000 dollars) increased from 2000 to 2006 by 6.59%. Not sure this contributes anything specific
to understanding the impact of ferry fares.
But this is included for completeness.
Chart 13: Retail Trade Sales by Sub-Category
Source: WA State Department of Revenue,
(DOR\Charts\SJC Retail Trade
Sales by SubCategory.gif)
Interesting to notice significant increases in “Building Materials, Garden Equip & Supplies”, “Food & Beverage Stores”, and “Motor Vehicles & Parts”.
Retail Sales Analysis
Can we get a sense of the contribution of Non-Residents, as compared to Retail Sales activity that results simply from the regular activity of business by the resident population? We used our Q1 Assumption to separate between “Resident” and “Non-Resident” Retail Sales.
Table 8: Residents vs Non-Residents Percent Increase Retail Sales
Source: WA State Department of
Revenue, (SJC Qtrly Retail Sales 00-06.xls)
|
Percent
Increase from 2000 to |
Resident
Retail Sales |
Non-Resident
Retail Sales |
|
2001 |
-1.73% |
-15.91% |
|
2002 |
-1.58% |
-16.94% |
|
2003 |
-3.88% |
14.02% |
|
2004 |
-1.75% |
14.64% |
|
2005 |
15.68% |
-6.35% |
|
2006 |
13.53% |
-4.44% |
For this study, “Non-Residents” would include tourists, visitors, and probably part-time residents as they would not participate in Q1 activity (Ridership and Retail Sales for instance). By its very nature, this is neither a precise definition nor stratification of population. But it is intended to be a rough delineation from “full-time” or “year-round” residents.
Can’t really say there is any “trend” indicated in the data in the above table. Maybe the only conclusion is that there is inconsistent reporting of retail sales.
Table 9: Retail Sales, Q1 Assumption Analysis
Source: WA State Department of Revenue; (SJC Qtrly Retail Sales 00-06.xls)
|
|
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
|
Q1
Retail Sales |
51,992,719 |
53,149,470 |
54,110,963 |
53,494,701 |
55,705,721 |
67,097,651 |
68,621,437 |
|
Q1
times 4 |
207,970,876 |
212,597,880 |
216,443,852 |
213,978,804 |
222,822,884 |
268,390,604 |
274,485,748 |
|
Annual
Sales |
280,647,948 |
276,169,467 |
280,283,546 |
302,677,523 |
313,683,954 |
344,320,826 |
355,223,725 |
|
Delta -
non-residents?? |
72,677,072 |
63,571,587 |
63,839,694 |
88,698,719 |
90,861,070 |
75,930,222 |
80,737,977 |
|
Delta %
of Total |
25.90% |
23.02% |
22.78% |
29.30% |
28.97% |
22.05% |
22.73% |
Note: Dean Runyan’s statistic states that: “Visitor-generated collections accounted for
23.6% of state sales taxes (in SJC) in 2005“.
Table 10: Retail Sales, Q1 Assumption Analysis – Percent increase 2000-2006
Source: WA State Department of Revenue; (SJC Qtrly Retail Sales 00-06.xls)
|
|
2000-2006 |
2000-2006 %
increase |
|
Q1
Retail Sales |
31.98% |
13.53% |
|
Q1
times 4 |
31.98% |
13.53% |
|
Annual
Sales |
26.57% |
8.88% |
|
Delta
- non-residents?? |
11.09% |
-4.44% |
Assumption: Q1 Retail Sales represents sales by county residents only.
In the above table, we take the Q1 number, annualize it (times 4) and compare it to the actual annual number. If we assume Q1 has the lowest “Non-Resident” activity, then the Retail Sales in Q1 is from regular business activity associated with resident life. Thus, if we annualize that, and compare it to the actual annual number, then one might assume the delta is the impact of “Non-Residents”. We choose Q1 over Q4 due to the impact on retail sales from the holiday season that occurs during Q4.
The result is pretty close to the Dean Runyan’s estimate of
23.6% of state sales taxes in
Fact:
Fact: Q1 Retail Sales increased 31.98% (2000 to 2006) (or 13.53% when adjusted for inflation)
Assumption extension: Annual Resident Retail Sales increased 31.98% (13.53%).
Assumption extension: Annual Non-Resident Retail Sales increased 11.09% (-4.44%).
Possible Conclusion: Using our Q1 Assumption, Non-Resident spending increased by 11.09% 2000 to 2006. However when you adjust for inflation, Non-Resident spending actually declines 4.44%. With the increase in population of 11.53% and considering that Residents have reduced their off-island trips, the increase in Q1 Retail Sales of 13.53% (adjusted for inflation) tends to make total sense.
Hotel/Motel Tax Analysis
Possible Conclusion: Using our Q1 Assumption, it is apparent that it does not work as well for Lodging Tax as it does for Retail Sales. (Details in Appendix C.)
Table 11: Lodging Tax by Quarter, 2000 to 2006
Source: WA State Department of Revenue; (FH Lodging Tax by Month 00-07.xls)
|
FH plus
County Only |
2000 |
2001 |
2002 |
2003 |
2004 |
20.05 |
2006 |
|
Q1 |
46,197 |
47,339 |
40,068 |
32,998 |
37,732 |
44,174 |
39,200 |
|
Q2 |
96,878 |
106,511 |
101,381 |
96,804 |
121,919 |
102,875 |
114,298 |
|
Q3 |
215,506 |
215,333 |
259,705 |
226,464 |
227,924 |
260,805 |
270,242 |
|
Q4 |
67,013 |
77,363 |
57,943 |
64,008 |
77,419 |
67,966 |
69,194 |
|
Islands
Total Lodging Tax |
425,594 |
446,547 |
459,096 |
420,274 |
464,993 |
475,821 |
492,935 |
The above table is quarterized figures per business quarter (as compared to reporting quarter).
Table 12: Lodging Tax by Quater – Percent increase 2000-2006
Source: WA State Department of Revenue; (FH Lodging Tax by Month 00-07.xls)
|
|
2000-2006 |
2000-2006 %
increase |
|
Q1 |
-15.15% |
-27.01% |
|
Q2 |
17.98% |
1.49% |
|
Q3 |
25.40% |
7.87% |
|
Q4 |
3.26% |
-11.18% |
|
Islands
Total Lodging Tax |
15.82% |
-0.37% |
Possible Conclusion: Reviewing the above adjusted for inflation numbers, Hotel/Motel Tax Distributions have actually declined 0.37% 2000 to 2006. This is a consistent indicator with the Retail Sales analysis above. The numbers would also tend to indicate that Hotel/Motel activity outside of the core “summer season” has fallen significantly. Room rates have risen 0% to 35% with the average of those increasing being 22% (not adjusted for inflation).
Cost of Living Trends – The Data
Real Estate
Chart 14: Median Home Price 1995 to 2005
Source: WA Center for Real Estate Research; (WCRER\SJC Median Home Price.gif)
Medium home price (based on sales of existing homes) was $250,000 in 2000 and $465,000 in 2005. That is an increase of 86.00% for that 5 year period (or 66.73% when adjusted for inflation).
Cost Of Living Index
Chart 15: Comparative Cost of Living Indexes, Jan 2007
Source: Sperlings Best Places; (SperlingsBestPlaces\Overall CPI Comparison.gif)
Overall Cost Of Living Index by Sperling’s BestPlaces
uses categories weighted subjectively as follows: housing (30%), food and
groceries (15%), transportation (10%), utilities (6%), health care (7%), and
miscellaneous expenses such as clothing, services, and entertainment
(32%). State and local taxes are not
included in any category. This data is
as of 01/2007.
Currently,
Table 13: Consumer Price Differential,
|
|
Total Mainland Cost |
|
% Increase of |
|
Groceries |
$130.77 |
$177.60 |
35.81% |
|
Home
Hardware |
$448.06 |
$558.16 |
24.57% |
|
Film
Processing |
$14.53 |
$36.64 |
152.17% |
|
Medications |
$45.75 |
$75.71 |
65.49% |
|
Auto
Parts & Services |
$37.79 |
$76.99 |
103.73% |
|
Electronics |
$2,583.06 |
$3,643.90 |
41.07% |
|
Toys |
$96.49 |
$172.34 |
78.61% |
|
Sporting
Goods |
$142.45 |
$249.94 |
75.46% |
|
|
|
|
|
|
Total |
$3,498.90 |
$4,991.28 |
42.65% |
From a study performed by an
[NOTE: This is clearly a single data point taken at a single point in time. The EDC has reviewed the data and analysis and feels comfortable that it is “representative” of February 2007. However, extreme caution should be taken in drawing any concrete conclusions from it without further sample points. It is the EDC’s intention to obtain additional data points into the future.]
Income/Wages
Chart 16: Median Income 1990 to 2006
Source: WA State Office of Financial Management; (OFM\Charts\SJC Median Income OFM.gif)
[Note: 2005 is
preliminary estimate and 2006 is projected.]
The Washington State Office of Financial Management
indicates that the median income in
Chart 17:
SJC Total Income by Category 1990 to 2004
Source: US Bureau of Economic Analysis; (BEA\Charts\SJC Income 90-04.gif)
Key: Wage
Supplements include employer contributions to pension, insurance and social
security.
Transfer Receipts include retirement
and disability insurance, medical payments (like Medicare & Medicaid),
unemployment insurance, veteran’s benefits, grants and student loans, payments
to non-profits.
Proprietor’s Income includes
current-production income of sole proprietorships and partnerships.
Wages include monetary remuneration of employees disbursed during the
year.
Div, Int, Rent includes “investment income”. Rent is only for persons not primarily
engaged in the real estate business .
Table 14: Percent Increase by Income Category 2000 to 2004
Source: US Bureau of Economic Analysis; (BEA\SJC Personal Income 69-04.xls)
|
|
2000 |
2004 |
Percent |
Percent Increase adjusted for inflation
(2000 dollars) |
|
Wage & Salary |
$131,036,000 |
$158,069,000 |
20.63% |
10.62% |
|
Proprietor Income |
$52,683,000 |
$55,579,000 |
5.5% |
-3.26% |
|
Div/Int/Rent |
$258,375,000 |
$279,108,000 |
8.02% |
-0.94% |
|
Total Income |
$532,664,000 |
$612,605,000 |
15.01% |
5.46% |
|
|
|
|
|
|
|
Wage & Salary
percent of Total Income |
|
|
|
|
Chart 18: Number of Wage Earners vs. Proprietors 1990 to 2004
Source: US Bureau of Economic Analysis; (BEA\Charts\SJC Num Wage Eearners.gif)
Table 15: Increase in Wage Earners vs. Proprietors 2000 to 2004
Source: US Bureau of Economic Analysis; (BEA\SJC Personal Income 69-04.xls)
|
|
2000 |
2004 |
Delta 2000-2004 |
|
Population |
14159 |
15142 |
983 |
|
Wage Earners |
5684 |
6107 |
423 |
|
Proprietors |
3754 |
4278 |
524 |
|
Non-Earners |
4721 |
4757 |
36 |
- Wage Earners: measures the average annual number of full-time and part-time jobs in each area by place-of-work. All jobs for which wages and salaries are paid are counted. Full-time and part-time jobs are counted with equal weight.
- Proprietors: includes both non-farm proprietors and farm proprietors and consists of the number of sole proprietorships and the number of individual business partners not assumed to be limited partners. Based on “place of residence”
- Non-Earners: The difference between the county population and the sum of Wage Earners and Proprietors. Not sure this has meaning, since individuals with multiple part time jobs (wage earner and/or proprietors) are counted multiple times in the above categories.
In reviewing this data, it initially seemed a bit un-aligned with expectations, as it was expected to indicate a greater number of “retired” (and thus non-earners) persons. However, when considering “retirees” that received “deferred income”, or have a Sole Proprietorship in which they perform a minimal amount of consultancy, the number of Non-Earners feels better.
Chart 19: Average Earnings per Job in 2000 dollars 1969 to 2004
Source: www.pnreap.org; (PNREAP\Charts\Avg Earnings per job in 2000 dollars.gif)
The above table shows the true increase in county resident average earnings. It indicates that once adjusted for inflation, the average earnings in 2004 ($22,358) is just about equivalent to the average earnings in 1969 ($22,083).
Possible Caveat: The “Average Earnings per Job” would be influenced by the number of part-time workers. If there was a significant increase in the percent of “part-time” workers, then it would pull down the overall average.
Chart 20:
Earned Income by Place of Residence vs. Place of Work 1969 to 2004
Source: www.pnreap.org; (PNREAP\Charts\Earned Income Residence vs Work.gif)
Personal income, and
its three major components, is intended to measure the incomes of the residents
of a region. Accordingly, the earned income data reported and presented in this
report are “by place of residence.” But in fact, earnings data are first
collected and reported as “earnings by place of work.” That is, they reflect
earnings on the basis of where workers work, and not on the basis of where they
live. To develop an estimate of earned income based on where workers live, the Bureau of Economic Analysis develops
an “adjustment for residence” to take into account the earnings of such
intercounty commuters.
In addition to showing
“earned income by place of residence” as a share of total income, the above
chart also displays “earnings by place of work,” as well the residence
adjustment which accounts for the difference between the two. This positive
adjustment for residence of 6.35% as a percent of total personal income in 2004
reflects an estimated net inflow of earnings dollars owing to the overall net
effect of workers commuting to and from
[From: PNREAP
Analysis of Growth and Change Among the Major Components of Personal Income within
San Juan County: 1969-2004. www.pnreap.org]
Cost of Living Trends – Possible Conclusions
Home Prices versus Income Analysis
Possible
Conclusion: We can see in the
following chart that Median Income in
Chart 21: Median Income versus Median Home Price 1995 to 2005
Source: WA State Office of
(OFM\Charts\SJC Homes vs Income 95-05.gif)
Wages versus Retail Sales Analysis
Let us look at the increase of wages earned (wage earners and proprietors earnings) and compare that to the increase in retail sales and see if there is any correlation.
Referring to Table 11: Increase in Wage Earners vs. Proprietors, 2000 to 2004, it breaks down the total county population in 2000 and 2004 into wage earners (folks who receive earnings by working for a company), proprietors (folks who receive earnings from owning a company), and non-earners (folks who neither own a business nor work for someone else). According to this data, there is just around 1/3 of the county population who are Non-Earners.
Table 16: Annual Retail Sales versus Total Earnings 2000 to 2004
Source: WA State Department of Revenue; (SJC Qtrly Retail Sales 00-06.xls)
Source: US Bureau of Economic Analysis; (SJC Income vs Wages.xls)
|
|
2000 |
2001 |
2002 |
2003 |
2004 |
2000-2004
% inc |
|
Annual
Sales |
280,647,948 |
276,169,467 |
280,283,546 |
302,677,523 |
313,683,954 |
11.77% |
|
Total
Earnings |
183,719,000 |
191,789,000 |
186,695,000 |
197,763,000 |
214,468,000 |
16.74% |
|
Total
Income |
532,664,000 |
549,896,000 |
560,884,000 |
573,371,000 |
612,605,000 |
15.01% |
|
Adjusted for Inflation (2000 dollars) |
||||||
|
Annual
Sales |
280,647,948 |
265,496,507 |
265,043,542 |
282,770,481 |
287,651,494 |
2.50% |
|
Total
Earnings |
183,719,000 |
184,377,043 |
176,543,735 |
184,756,166 |
196,669,418 |
7.05% |
|
Total
Income |
532,664,000 |
528,644,000 |
530,387,000 |
535,661,000 |
561,765,000 |
5.46% |
Retail sales increased: $33,036,006 2000 to 2004 while total earnings increased: $30,749,000 during the same period.
Possible Conclusion: Increased earnings can not account for the total amount of increased retail sales, but it could certainly account for a significant portion there of. Especially when considering that the resident population includes approximately 1/3 of non-earners. And that a significant portion of total personal income, is un-earned income.
Tourism – The Data
Looking purely at “Tourism” statistics reported by Dean
Runyan,
Chart 22: Tourism Spending 1992 to 2005
Source: Dean Runyan; (DeanRunyan\Charts\SJC Adjusted Spending Increase 92-05.gif)
Clearly,
Tourism – Possible Conclusions
Chart 23: Adjusted Tourism Spending Percent Increase from 2000
Source: Dean Runyan, (DeanRunyan\Charts\SJC Adjusted Spending Increase 00-05.gif)
Possible
Conclusion: Adjusted for
inflation, according to Dean Runyan, SJC tourism spending has increased 0.84%
2000 to 2005 as compared to WA State overall tourism spending which has
increased 8.39% 2000 to 2005. Clearly,
there has been some negative affect (or affects) impacting Tourism in
Appendix A: CPI Indexes used to adjust for inflation
Table 17: Consumer Price Index 1989-2006
|
DATE |
INDEX |
Adjustment to 2000 |
|
June 1989 |
116.7 |
.6516 |
|
June 1990 |
124.2 |
.6935 |
|
June 1991 |
133.0 |
.7426 |
|
June 1992 |
137.8 |
.7694 |
|
June 1993 |
141.9 |
.7923 |
|
June 1994 |
146.4 |
.8174 |
|
June 1995 |
151.2 |
.8442 |
|
June 1996 |
155.6 |
.8688 |
|
June 1997 |
161.9 |
.9040 |
|
June 1998 |
166.6 |
.9302 |
|
June 1999 |
172.7 |
.9643 |
|
June 2000 |
179.1 |
0 |
|
June 2001 |
186.3 |
1.0402 |
|
June 2002 |
189.4 |
1.0575 |
|
June 2003 |
191.7 |
1.0704 |
|
June 2004 |
195.3 |
1.0905 |
|
June 2005 |
199.8 |
1.1156 |
|
June 2006 |
208.2 |
1.1625 |
|
|
|
|
To calculate the delta in CPI, an example formula is:
(June 2006 (208.2) – June 2000 (179.1)) / June 2000 (179.1) = 0.1625
To then adjust a dollar amount for inflation, we divide by the adjustment factor.
2006 Q1 Retail Sales ($68,621,437) / adjustment for inflation (1.1625) =
2006 Q1 Retail Sales adjusted for inflation ($59,029,193)
Appendix B: Additional Commuter Fare data
Table 18: "Commuter" Ridership as percent of Total, quarterly 2000 to 2006, by type
Source: WA State Ferries; (SJC Ferry Statistics.xls)
|
|
Commuter % of Total Vehicles |
Commuter % of Total Passengers |
||||||
|
|
Q1 |
Q2 |
Q3 |
Q4 |
Q1 |
Q2 |
Q3 |
Q4 |
|
2000 |
37.45% |
31.22% |
26.96% |
38.78% |
17.12% |
12.08% |
9.63% |
16.10% |
|
2001 |
39.12% |
34.21% |
28.66% |
42.09% |
17.05% |
12.68% |
10.58% |
18.08% |
|
2002 |
42.71% |
39.49% |
35.12% |
46.38% |
20.39% |
15.67% |
13.52% |
21.67% |
|
2003 |
44.40% |
41.03% |
35.92% |
49.88% |
22.46% |
17.95% |
16.16% |
25.96% |
|
2004 |
49.01% |
44.35% |
38.20% |
51.59% |
26.00% |
19.93% |
17.39% |
27.29% |
|
2005 |
49.70% |
44.77% |
38.00% |
51.79% |
25.56% |
20.55% |
16.70% |
27.07% |
|
2006 |
50.82% |
45.00% |
37.55% |
49.95% |
26.66% |
19.88% |
16.28% |
16.87% |
Looking at commuter fares a bit closer, Q4 and Q1 percent commuter fare are the highest (up to 51.79% & 50.82% respectively during quarters with the least number of non-residents)
If we look at commuter book use versus total ridership on a per island basis (2006 versus 2000), the total ridership trend is downward, but commuter book usage has increased significantly. Here are the numbers:
Table 19: Percent Increase Ridership Per
Source: WA State Ferries; (SJC Ferry Statistics.xls)
|
2006-2000 |
Lopez |
Shaw |
Orcas |
|
Interisland |
Total |
|
Q1 Total
Ridership % increase |
-2.68% |
-8.03% |
-0.04% |
-4.18% |
-5.30% |
-2.74% |
|
Q2 Total
Ridership % increase |
-2.73% |
-20.79% |
-1.76% |
-9.77% |
-10.27% |
-6.21% |
|
Q3 Total
Ridership % increase |
0.83% |
-21.68% |
-2.70% |
-8.38% |
-15.38% |
-5.74% |
|
Q4 Total
Ridership % increase |
-1.95% |
-13.72% |
-11.25% |
-20.49% |
-18.43% |
-14.07% |
|
Q1
Commuter Veh % increase |
28.23% |
-0.30% |
46.70% |
58.05% |
5.99% |
36.95% |
|
Q2
Commuter Veh % increase |
48.93% |
-4.19% |
44.93% |
69.37% |
-0.49% |
43.00% |
|
Q3
Commuter Veh % increase |
34.91% |
3.64% |
48.05% |
56.76% |
-10.90% |
35.34% |
|
Q4
Commuter Veh % increase |
24.31% |
0.00% |
26.52% |
30.05% |
-17.48% |
18.15% |
|
Q1
Commuter Pass % increase |
46.59% |
31.68% |
28.53% |
55.39% |
|
44.50% |
|
Q2
Commuter Pass % increase |
45.98% |
-8.29% |
69.37% |
38.58% |
|
46.45% |
|
Q3
Commuter Pass % increase |
52.27% |
10.52% |
57.19% |
60.00% |
|
55.95% |
|
Q4
Commuter Pass % increase |
-20.75% |
-16.01% |
-17.32% |
-14.32% |
|
-16.92% |
Appendix C: Hotel/Motel Tax Analysis
Can we get a sense of the contribution of “Non-Residents”, as compared to Hotel/Motel activity that results simply from the regular activity of business by the resident population? Can we use a similar Q1 assumption as we did for Retail Sales above? Of course, this really begs the question, how much SJC Hotel/Motel activity occurs as a result of “resident” activity in the county (non-tourist activity: island business, local government business, friends and family visits, etc..).
Table 20: Lodging Tax, Q1 Assumption Analysis
Source: WA State Department of Revenue; (FH Lodging Tax by Month 00-07.xls)
|
|
2000 |
2001 |
2002 |
2003 |
2004 |
2005 |
2006 |
|
Q1
only |
46,197 |
47,339 |
40,068 |
32,998 |
37,732 |
44,174 |
39,200 |
|
Q1
times 4 |
184,790 |
189,356 |
160,271 |
131,991 |
150,929 |
176,697 |
156,800 |
|
Annual |
425,594 |
446,547 |
459,096 |
420,274 |
464,993 |
475,821 |
492,935 |
|
Delta
non- residents? |
240,804 |
257,190 |
298,825 |
288,282 |
314,064 |
299,124 |
336,134 |
|
% Total |
56.58% |
57.60% |
65.09% |
68.59% |
67.54% |
62.86% |
68.19% |
Table 21: Lodging Tax, Q1 Assumption Analysis – Percent increase 2000-2006
Source: WA State Department of Revenue; (FH Lodging Tax by Month 00-07.xls)
|
|
2000-2006 |
2000-2006 %
increase |
|
Q1 Lodging
Sales |
-15.15% |
-27.01% |
|
Q1
times 4 |
-15.15% |
-27.01% |
|
Annual
Sales |
15.82% |
-0.37% |
|
Delta
- non-residents?? |
39.59% |
20.08% |
Assumption: Q1 Lodging Tax represents resident based activity.
In the above table, we take the Q1 number, annualize it
(times 4) and compare it to the actual annual number. If we assume Q1 has the lowest “Non-Resident”
activity, then the H/M Tax in Q1 is from regular business activity associated
with resident life. Thus, if we
annualize that, and compare it to the actual annual number, then one might
assume the delta is the impact of “tourist activity”. We choose Q1 over Q4 due to the impact from
the holiday seasons that occur during Q4.
This would tend to indicate that “Non-Resident” activity has generated up to
68.59% (in 2003) of the Hotel/Motel activity in the county. This is significant, but less than one might
have assumed. But, is the Q1 simplifying
assumption as valid for Hotel/Motel as it is for Retail Sales?
Fact:
Fact: Q1 Lodging Tax increased -15.15% (2000 to 2006) (or -27.01% when adjusted for inflation)
Assumption extension: Annual Resident Lodging Tax increased -15.15% (-27.01%).
Assumption extension: Annual Non-Resident Lodging Tax increased 39.59% (20.08%).
Appendix D: Retail Sales Category Definitions
Source: US Census Bureau, 2002 NAICS Definitions, http://www.census.gov/epcd/naics02/naicod02.htm
Appendix E: Ferry Classification Description
Vehicles Above 20 Ft:
Vehicles/Oversize (20-49), Veh Med
Oversized 20 (A vehicle of length 20’ to 49’) vehicle and driver.
Categories included
under Oversized 20:
Category Definition
Vehicle/driver Vehicle and driver full fare. This fare type counts the oversized vehicle and the driver.
Vehicles/Oversized (50+), Veh Lrg
Oversized 50 (A vehicle of length 50’ and longer) vehicle and driver.
Categories included
under Oversized 50:
Category Definition
Vehicle/driver Vehicle and driver full fare. This fare type counts the oversized vehicle and the driver.
Vehicles Other:
Other Discounts
Categories included
under Other Discounts:
Category Definition
Vehicle/Senior Driver Vehicle with senior citizen driver. Passengers age 65 and over, with proper identification establishing proof of age may travel at half fare tools on any route where passenger’s fares are collected. This fare type counts the vehicle and the driver which board a vessel.
Motorcycle Full fare motorcycle and driver. This fare type counts the motorcycle and the driver which board a vessel. This also includes motorcycles pulling trailers and motorcycles with side cars.
Kayak/Stowage Carry on items. This fare type counts only the carry on items such as kayaks, canoes, and other items of comparable size which are typically stowed on the vehicle loading section of the vessel. This fare type does count the passenger carrying the item.
Motorcycle Prepaid Motorcycle and driver prepaid coupon. This fare type counts the use of a prepaid coupon (commuter) for both the motorcycle and the driver which board a vessel.
Miscellaneous Vehicle Miscellaneous Vehicle and Driver. This fare type counts the
miscellaneous vehicle and driver which board a vessel. If
a vehicle doesn’t fall into one of the already defined vehicle fare types,
it is classified as a Miscellaneous Vehicle. One example is the hazardous materials trips between Fauntleroy and