The U.S. Department of Energy’s operations in Oak Ridge added more than $1.9 billion to Tennessee’s economy in 1998, supported 39,482 full-time jobs, and generated almost $60 million in tax revenues for the state, a University of Tennessee study says.
If DOE’s Tennessee operations were split off into a separate county, it would have an income level higher than 80 of the state’s 95 counties, would be 12th in the size of its employed work force, and would generate more tax revenues than 68 counties.
These findings are from a UT-Knoxville Center for Business and Economic Research study on the economic impact of DOE’s presence in Oak Ridge and the state as a whole. The Department of Energy supported the research.
“The operations of the U.S. Department of Energy provide a major source of economic benefits for the state of Tennessee and its residents,” said Dr. Matthew N. Murray, the economist who directed the CBER study. “The $2 billion that the department budgets for its Oak Ridge activities creates jobs and income, and expands the state’s tax bases.
“The economic benefits have been accruing for more than 50 years, but until this study no one has taken a comprehensive look at them.”
The study finds that for every payroll dollar the Energy Department spends in the state, personal income goes up by $1.91. Each of the 13,782 full-time jobs funded by DOE results in almost 1.9 additional jobs, for a total of 39,482 jobs.
The income figures would rank a hypothetical DOE “county” just ahead of Sevier County and below Maury County. The sales tax revenue the department generates puts it in the same company as Hamblen and Putnam counties.
Of the $59.5 million in sales tax revenues, $43.3 million went to the state and $16.2 million went to local governments.
The study looks not only at the direct impact of DOE spending-the amount of wages, contracts and other payments received directly from the department. It also considers the indirect effects resulting from the purchase of local goods and services and the ripple effect created when the people who have received DOE money spend it in the state.
Murray said the study represents a conservative estimate of actual benefits; the real economic impact is larger.
“One of the reasons that the Energy Department is important to the Tennessee economy is that the primary market for its services is the national economy, rather than a local economy,” Murray said. “This leads to an injection of additional purchasing power and the creation of additional jobs and income.”
The Department of Energy has two organizations in Tennessee: its Oak Ridge Operations Office, one of 10 national field offices overseeing DOE’s weapons and other scientific and technological activities, and the Office of Scientific and Technical Information, which collects, stores and disseminates the results of the research and development funded by the department.
“The DOE presence represents a unique technological and educational resource and a major component of the growing East Tennessee Technology Corridor,” Murray said.
A second study is under way to determine the qualitative value of other DOE contributions to the state.
Other findings of the study:
-Personal income generated by DOE totaled $1.3 billion in 1998.
-DOE employees in the state earned salaries that were 38 percent higher than that of the average Tennessean.
-DOE has spent more than $48.8 million since 1993 to lessen the negative economic impact of downsizing occurring in the department’s Oak Ridge activities and is actively promoting the reindustrialization of parts of its 35,000-acre reservation, most notably in the East Tennessee Technology Park.
-Charitable giving by DOE and contractor employees in the region totaled more than $10.8 million.
-The DOE work force is more highly educated than the state average, with 58.2 percent holding at least a bachelor’s degree, compared to a state average of only 16.9 percent. Some 1,005 DOE employees have Ph.D. degrees and 2,719 have master’s degrees.
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