The Economic Base of the Study Area

In the following table, the economic base is expressed in terms of the number of jobs in 1994 located within the study area which are supported by the sales and/or spending of each category from money which is received from outside of the six town area. The economic base is a measure of the impact of revenue received from outside a geographic area on that geographic area. The calculations for this table have been made by Northern Economic Planners using data from state and federal agencies.

Table 9 shows the importance of retired residents who are importing their pensions, social security checks and unearned income from their investments on employment in the local economy for the six towns. For the state as a whole and for most areas of the state, manufacturing usually is the most important source of outside revenues and state-wide manufacturing is over 30 percent of the economic base as opposed to only 12 percent for the study area. Seasonal residents are third in importance to the study area at 10 percent. If they are considered to be tourists, than all tourists would make up 19 percent of the economic base, above the state-wide average of 15 percent. Net out-commuters for the region at six percent is just over half of the state-wide level for out-commuters at ten percent of all imported income and revenues. Compared with the state, the other significant industries in terms of economic base are: construction, transportation and mining. Other services and retail trade are under-represented within the six town area, again supporting the concept that not only is there leakage of income by area households, but that residents of other areas are not attracted into the six towns for retail trade and consumer services purchases. "Other retail" and "other services" shown in Table 9 are sales by retail stores and consumer services to year-round residents who hold jobs within the six town area.

The estimated number of jobs in 1994 located in the six towns by economic sector or industry are shown in Table 10. The estimates are made by Northern Economic Planners, but rely on detailed employment data from the New Hampshire Department of Employment Security. The multiplier has been calculated by Northern Economic Planners, but is based on federal multipliers calculated by the U.S. Bureau of Economic Analysis. The relatively low values for the multipliers for these industries within the six town study area as compared with national level and state-wide multipliers for these same industries show the large amount of leakage of household income to outside of the area and also that local businesses are making purchases from distant suppliers. In Tables 10 and 11, "other retail" includes all retail businesses except for eating and drinking establishments. "Other services" in Tables 10 and 11 include all service establishments except: lodging, recreation services financial services, and real estate sales.

The estimated total sales or receipts in 1994 for businesses and government in the six towns by economic sector or industry. These estimates have been made by Northern Economic Planners based on state employment data and sales data from Sales and Marketing Management and the US. Census of Business for Carroll County.

Property Taxes and Tax Base

Property tax levels are a concern to many residents nd to local government officials. The equalized tax rates for the six town area range from a low of $9.99 per $1,000 of equalized valuation in Freedom to a high of $25.27 in Effingham. The average (mean) rate for all six towns was $$18.45. This is lower than the $26.07 equalized rate for the average town state-wide in 1995.

Non-residential uses made up only 2.8 percent of the town's total valuation of taxable property in Sandwich; 5.7 percent in Freedom; and 18.7 percent in Ossipee -- according to information compiled by the State Department of Revenue Administration. The average for the six town area for taxable nonresidential property was 10.3 percent. The average for the typical town in the state was 13.8 percent.

It would be easy to conclude form the above data that higher tax rates are found in those towns with larger shares of nonresidential property. However, the situation is far more complicated because many of the towns with the very lowest tax rates have very large shares of taxable nonresidential property -- usually utility generating plants. Within the study area it appears that the towns with the lowest tax rates have relatively large shares of their housing stock occupied seasonally, when schools are not in season.

Conclusions and Recommended Actions

The key effort of the Chamber should be to help existing local businesses to expand, because such businesses are most likely to use local labor skills and will not cause inmigration of new families into the area. The Chamber should also be ready to provide information to businesses which wish to relocate to the greater Ossipee area and to be able to refer people who wish to start-up businesses in the area to appropriate programs. Retirees and seasonal residents support almost one-half of the local area economy. Encouraging older people to retire to the area will help the local economy to grow without adding enrollment to local schools.

Manufacturing is slightly more important than vacationing tourists and summer campers as an export sector. Both manufacturing and tourism offer opportunities for economic growth.

The Chamber needs to make a much greater effort to encourage local residents to shop and use consumer services from business already in the area. Reducing the "leakage" of consumer dollars to businesses in distant cities and towns will have a major impact on local job creation and will create an upward spiral for the local economy.

The attraction of nonresidential taxable land uses will increase the tax base, but it will also lead to increasing costs for local government and the school district. Given the great reliance by local governments on property taxes, employment growth should be encouraged at a level where existing residents can find greater choices among possible jobs and the tax base will grow, but without attracting new job seekers to the area.