Thursday, November 1, 2012
By Bob Anderson
Every Georgetown County voter probably has many reasons to vote either for or against a referendum on a 1-cent Capital Project Sales Tax that will appear on the ballot Tuesday. The value of projects on the list, including recreation facilities and libraries, varies dramatically from person to person.
But there's one project on that list that without exception will benefit every single person who lives, works and plays in Georgetown County: Dredging of the Georgetown port.
At the top of the projects list is $5.5 million toward the $33 million cost of dredging, which would deepen the port's channel to 27 feet. For many months now Georgetown County staff the administrator, the economic development director and others have investigated thoroughly the potential impacts of dredging, accounting for a number of variables. After reviewing their findings, I'm reasonably confident that's a project the county should be putting its money into. That's why regardless of what happens with the Capital Project Sales Tax on Election Day, I'll be committed to identifying local funds to make sure dredging comes to pass.
Proponents of dredging have long touted the economic advantages for Georgetown County: Jobs, more companies doing business here and more money being spent with existing local businesses. Georgetown County staff, with aid from a 2010 report from economist Donald Schunk, put real numbers to those predictions.
Schunk's 2010 report forecasted a total of 42 new jobs for the area for every increase of 500,000 tons annually. That prediction includes 23 new jobs directly at port service providers and 19 new jobs dispersed throughout the local economy. For the same annual increase in tonnage, the report also calls for a total of $1.3 million annually in new local household income and $4.4 million in total local economic output. These impacts are over and above the economic impacts that would stem directly from the location of new businesses in the region as a result of dredging.
There are currently three industries that ship a combined annual total of 600,000 tons through the Port of Georgetown via barge. The port could add four new industries and increase shipping volume to 1 million tons a year under the current economy if the port is dredged to 27 feet, according to conservative estimates from Georgetown County staff. That would create 34 new jobs and $1 million in new annual household income, figures from county staff show. The total economic output would be $3.5 million.
The numbers are even more promising when factoring in an improved economy. Under that scenario, it is anticipated the port would attract an additional three new industries, bringing the total to 10, with an annual shipping volume of more than $1.4 million tons. That would create 67.8 new jobs and $2.1 million in new annual local household income. Total local economic output would be $7.1 million.
Of course, there's no crystal ball, and thus no guarantees, but based on my work with county staff and what they've shown me, there's plenty of cause to have confidence in these figures.
So, let's turn our sights now to return on investment.
Assuming the county invests the $5.5 million in dredging, and using the local economic output of $3.5 million from the 2010 Schunk report, we can predict a breakeven point after 1.5 years. That's the scenario that uses current economic conditions. With an improved economy, payback could occur in less than eight months. Given the fact that the balance of the $33 million total cost of dredging is taxpayer money, it would take just under nine and a half years under the current economy and just over four and a half years with an improved economy to break even based on the county's estimates.
It should also be noted that dredging is a recurring effort. In other words, once the channel is dredged to the planned 27 feet, we will be faced with maintaining the channel depth. The annual cost to maintain the depth will not be as expensive, but it will still be significant. The good news is that if we can reach the one million ton annual import/export threshold, we will be placed on the federal list of ports that are eligible for federal dollars to cover the annual maintenance costs. Getting federal dollars is not guaranteed, so if we are not fortunate enough to get the federal money we can ask the state for funds allocated for maintaining ports to fund the effort. If we are unsuccessful with that effort, we will have to consider our own revenue as a means of maintaining the port if it makes sense.
After looking hard at the industries that are interested in using our port and, by the way, they have asked to remain anonymous I have come to the conclusion that it makes sense to find the $5.5 million that the state has asked us to provide, whether the sales tax referendum passes or not.
There is, of course, risk in moving forward with this endeavor, but after working with county staff for the past six months on fact-finding, which at times has not been easy, I have come to the conclusion that we need to give this a try. We are one of the few counties in this great nation that is blessed with a natural port. I vote to take the risk and spend the $5.5 million. We need to keep our working age folks in Georgetown County by creating an environment that is conducive to attracting business large and small.
Bob Anderson, a Pawleys Island resident, represents District 6 on Georgetown County Council.
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