Economists duel over whether Republican convention did squat for Tampa

If you’ve ever found yourself wondering, “Hey, that University of South Florida economist, does he spend all his time hating on Super Bowls and other mega-sporting events as having no benefit to local economies?”, the answer is no, he does not. He takes the time to puncture the economic-windfall balloon of political conventions, too:

Porter says the [2012 Republican National Convention in Tampa] fails to show up in tax revenue and taxable sales statistics for Hillsborough County. For the evidence, he says, look at this:

From August 2010 to August 2011, sales tax revenues in Hillsborough grew at 5.88 percent — faster than in the rest of the state, where growth was 5.44 percent.

But from August 2011 to August 2012, the month of the convention, tax revenues in Hillsborough rose about 6.75 percent — lower than the 6.92 percent seen in the rest of the state.

Taxable sales statistics were similar, Porter said.

From August 2011 to August 2012 sales in Hillsborough rose 5.83 percent — less than the 6.31 percent seen in the rest of Florida.

“Comparing August to August over time, it is apparent that the RNC did not stimulate economic activity in Hillsborough County,” Porter concludes.

The article quoted above — by Tampa Bay Times reporter Richard Danielson — then goes on to quote rebuttals from University of Tampa economist Brian Kench, who was hired by the convention host committee to find an impact, and found $214 million worth, as well as host committee president Ken Jones, who accused Porter of comparing “apples to bicycles.” Kench said that Porter had erred in looking at onlytaxable sales, and then when you include overall sales — including untaxed items like groceries and services — “Hillsborough’s overall sales rose nearly 10.5 percent from August 2011 to August 2012 — nearly double the 5.8 percent growth in the rest of the state for the same two months.”

To which Porter replied … well, we don’t know, because Danielson ended his article there. But because this is apparently Email Economists So Journalists Don’t Have To Week here at Field of Schemes, I asked Porter what he made of this. His reply:

  • Taxable sales are absolutely the right metric to use, because “RNC visitors aren’t buying medicine, groceries, hiring attorneys and getting haircuts while in Tampa. They pay for hotel rooms, buy meals at restaurants, and buy souvenirs, all of which are taxable. … If taxable sales don’t respond, these visitors are no different than the visitors we normally have in town in August.”
  • Overall sales in Hillsborough were indeed up more than in the rest of the state from 2011 to 2012 — but that’s because they’re always up more in the Tampa area than the rest of the state: “Because we are a port city with significant export activity (not subject to sales tax), our gross sales are large relative to the rest of Florida and growing rapidly as we come out of the recession. …Comparing August 2010 to August 2011 gross sales in Hillsborough rose 11.7%.  Comparing August 2011 to August 2012 the increase fell to 10.4%.  This mirrors the rest of the state wherein August to August sales rose 1.5 percentage points less in the 11-12 period compared to the 10-11 period.”

So, it looks like the Republican convention, like most of the sports mega-events that Porter has studied, doesn’t actually do anything measurable to help the local economy despite how eagerly cities chase after hosting it. Unless Kench has a counter-counter-counter-counter-argument; I’ve emailed him as well, but haven’t — oh wait, here’s a reply from Kench right this second!

That assertion is proven false one month prior (July 2012), when the rest of the state grew faster (8.7% y/y) than Hillsborough county (6% y/y).

Time to go back to Porter to see what he says. I’m starting to have just a smidge of sympathy for why reporters on deadline don’t do this…

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7 comments on “Economists duel over whether Republican convention did squat for Tampa

  1. “Help the local economy” and “increase taxable sales” are two different things. Even an economics professor should understand that.

  2. One thing Porter may have missed….many hotel rooms are often not taxed at events like the RNC because so many government employees get exemptions from paying taxes while traveling.

  3. I talked to Porter again — his argument is that nontaxable sales isn’t a good measure because if you add an intermediate level of sales (say, a packager who’s paid to plan an event), then a lot of the expenses get double-counted as the middleperson pays for things and then charges them back to the original buyers.

    I’m not convinced either way at the moment until I can get my hands on better actual data…

  4. Localities don’t let much that visitors spend money on go untaxed. Even a non-economist should’ve noticed that.

    re: Noah’s point: I would hope that attendees at a political convention aren’t there as government employees and thereby avoiding taxes (outside of Secret Service, etc.). But I’m probably wrong.

  5. My biggest beef with many of these studies is the lack of focus on jobs. Even if the job is part time, it’s still productivity.

  6. Hi Neil,
    Hyperlink attached to ” puncture the economic-windfall balloon of political conventions, too:” is dead.

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