Amid continuing discussions about T.F. Green Airport’s proposed expansion, the board that oversees the facility has released a report that attributes $1.96 billion in economic activity to Green, including $603.3 million in earnings from 21,857 jobs in 2005.
The study, prepared by Wilbur Smith Associates, shows employment “attributable” to Green has risen sharply from 1998, when the airport was credited for 16,606 jobs, and Green’s economic impact has nearly doubled, from $1.03 billion.
The increases coincide with dramatic growth at Green. From 1995 to 2005, passenger traffic grew from 2.2 million to 5.7 million, according to the R.I. Airport Corporation – and this despite a drop after the Sept. 11, 2001, terror attacks that took years to recover from.
But most of the economic activity cited by the study is based on the airport’s indirect impact on the region and on a “multiplier” effect. Green only employed 2,014 people in 2005, for example, but it’s credited with 11,330 additional jobs from its indirect impacts on the hospitality industry and other sectors, plus another 8,513 due to the multiplier.
The study also looks at the impact of the five general aviation airports overseen by RIAC and deems them to have contributed $140.5 million to the region’s economy in 2005, including $56.96 million from 1,461 jobs.
In an interview, Brian Schattle, chief financial officer for RIAC, said it “wasn’t surprising” to see the scope of the airports’ impact and the growth of that impact.
“We expected to see growth,” he said, “especially with the large projects we’ve been undertaking from a development standpoint, and we’re looking forward for that growth to continue.”
The study says Rhode Island benefited from more than $1 billion of the economic activity and 12,706 of the jobs generated by the airport, and Warwick alone saw $167.4 million in activity, 1,277 jobs and $27.3 million in wages.
Asked about the multiplier effect, which accounts for $979.6 million of the cited economic impact, Schattle said that for each $1 of economic activity that comes directly and indirectly from the airport, the multiplier effect will be “a little less than $1.” The multiplier impacts are calculated from the U.S. Department of Commerce’s Bureau of Economic Analysis regional input-output modeling system.
“What the multiplier impact takes into effect is the economic activity being re-spent into the economy,” he said. “One of the impacts would be employees’ wages at T.F. Green. An employee might make $100, and then if the employee spent that $100 on groceries, that would be a multiplier effect.”
Jeff Neal, a spokesman for Gov. Donald L. Carcieri, said these figures prove the importance of the airport.
“This report reinforces what Governor Carcieri has been saying for over four years: that T.F. Green, along with Rhode Island’s other airports, is a vital economic engine for the state,” Neal said. “Certainly, we know that the airports create a significant direct and indirect economic activity that is important for the host community and for the state as a whole.”
That is one of the reasons Carcieri “has been so supportive of the construction of the new Warwick train station,” Neal added. “That will have the same type of effect as the state’s existing airport and will bolster our current capacity.”
Another benefit cited by the study is $11.5 million in “airport-related” revenue collected by the City of Warwick, including $7.4 million in real estate and personal property taxes, $3.6 million redistributed to Warwick from the state taxes on hotels, off-airport parking and rental cars, and from the $500,000 annual fee that RIAC pays the city for police and fire support.
