**CURRENT AND FUTURE ECONOMIC IMPACTS**

**OF THE YELLOW RIVER FOCUS AREA CHAPTER 4**

In Chapter 3, we provide estimates of the economic impacts of
commercial, governmental and recreational activities associated with the
NNWR. In this chapter, we continue the regional economic analysis by
estimating the economic effects that would be associated with a Yellow
River Focus Area (YRFA) project. The analytical approach described in
this chapter is similar to that used to generate the results presented
in Chapter 3 in that we apply IMPLAN to estimate the regional economic
impacts and model the regional economic contribution of the same
categories of recreational activities considered earlier. We also
continue to consider three time periods within our analysis: a baseline,
or 1996, scenario as well as scenarios that represent conditions 15
years and 30 years in the future.

To model the economic impact that would result from expansion of the
NNWR, we need to understand the time period over which acquisition would
occur and the types of properties that would be purchased (i.e., the
current or expected future use of these parcels). This information is
not, however, available at this time. Thus, we choose instead to present
estimates of the economic impact associated with a change in land use
from private ownership to wildlife refuge for an \"industry acre\" and a
\"composite acre\". The \"composite acre\" metric allows us to examine
the economic impact of acquiring an acre of land for inclusion in the
NNWR whose alternative land use represents a weighted average of all
existing land uses in the relevant counties. This metric is provided to
allow the U.S. Fish and Wildlife Service (FWS) an order-of-magnitude
estimate of the impacts of an acquisition strategy given no knowledge of
the specific parcels to be purchased. The \"industry acre\" metric
allows us to consider the expected regional impact from the conversion
of an acre of land in a specific land use (i.e., potato farming) to
refuge. This metric allows the Service to place bounds on the potential
effects of any specific acquisition strategy.

This chapter also estimates the foregone tax revenues to local
governments that would result should the NNWR acquire land in the YRFA.
Given uncertainty in the timing and nature of these purchases, we
estimate the gross foregone tax revenues for each relevant land use as
well

as for a composite of current land uses (i.e., an acre representing the
weighted average land use). In addition, we calculate what the FWS
annual Refuge Revenue Sharing payment would be, to estimate the *net*
foregone tax revenues per acre.

Finally, we use the IMPLAN model to estimate the regional economic
contribution of additional recreation on the YRFA. This analysis
extrapolates the per-acre economic contribution of recreation on
existing NNWR acres to new YRFA acres. We estimate the extent to which
this contribution mitigates the economic impacts associated with
expansion, and offer estimates of the amount of additional YRFA
recreation required to offset completely these regional economic
impacts.

# regional economic impacts of YRFA acquisition

This section provides estimates of the regional economic impact
associated with YRFA acquisition; that is, removing an acre from
commercial use and turning it into Refuge land. This section first
describes the current and projected industrial uses of the YRFA
(assuming no NNWR acquisition), then provides estimates of the economic
impact associated with an \"industry acre\" and a \"composite acre\".

## Characterization of Current Land Use in the YRFA

Estimating the contribution of the YRFA to the regional economy in the
baseline and 15- and 30-year scenarios requires (1) characterization of
current land use and (2) projections of land use changes in 15 and 30
years (assuming no NNWR acquisition). This section describes current and
future YRFA land use.

### Land Use in the Baseline Scenario

Characterization of the baseline land use requires obtaining an
inventory of the current uses of the property in the YRFA. Based on real
property listings in Juneau and Wood counties, IEc developed a list of
all properties in the YRFA, including any improvements to them, and
their property values. The listings were categorized into several
relevant headings (e.g., agriculture, timber production).[^1]

IEc then developed estimates for the percentages of YRFA land devoted to
cranberry and potato production. Although county records do indicate
whether or not land currently supports agriculture, they do not provide
detail on specific crops grown. Therefore, IEc estimates for acreage
devoted to cranberry and potato crops reflect NNWR management estimates
derived from aerial maps of the YRFA.

Exhibit 4-1 provides a summary of the composition of the YRFA land use
in the baseline year (1996) as well as land use projections for other
years. As shown Exhibit 4-1, timber production accounts for a
significant amount of acreage in the YRFA, followed by agriculture.

+----------+--------+---------+--------+---------+-------+----------+
| *        |        |         |        |         |       |          |
| *Exhibit |        |         |        |         |       |          |
| 4-1**    |        |         |        |         |       |          |
|          |        |         |        |         |       |          |
| **PE     |        |         |        |         |       |          |
| RCENTAGE |        |         |        |         |       |          |
| B        |        |         |        |         |       |          |
| REAKDOWN |        |         |        |         |       |          |
| OF LAND  |        |         |        |         |       |          |
| USE IN   |        |         |        |         |       |          |
| YRFA     |        |         |        |         |       |          |
| FOR**    |        |         |        |         |       |          |
|          |        |         |        |         |       |          |
| **B      |        |         |        |         |       |          |
| ASELINE, |        |         |        |         |       |          |
| 15-YEAR  |        |         |        |         |       |          |
| AND      |        |         |        |         |       |          |
| 30-YEAR  |        |         |        |         |       |          |
| SCE      |        |         |        |         |       |          |
| NARIOS** |        |         |        |         |       |          |
+==========+========+=========+========+=========+=======+==========+
|          | **1996 |         | **2011 |         | *     |          |
|          | (Basel |         | (15-Y  |         | *2026 |          |
|          | ine)** |         | ear)** |         | (     |          |
|          |        |         |        |         | 30-Ye |          |
|          |        |         |        |         | ar)** |          |
+----------+--------+---------+--------+---------+-------+----------+
| **Ac     | **A    | **      | **A    | **      | **Ac  | *        |
| tivity** | cres** | Percent | cres** | Percent | res** | *Percent |
|          |        | of      |        | of      |       | of Total |
|          |        | Total   |        | Total   |       | Acres**  |
|          |        | Acres** |        | Acres** |       |          |
+----------+--------+---------+--------+---------+-------+----------+
| C        | 400    | 2.1%    | 433    | 2.3%    | 446   | 2.4%     |
| ranberry |        |         |        |         |       |          |
+----------+--------+---------+--------+---------+-------+----------+
| Potato   | 70     | \<1.0%  | 85     | \<1.0%  | 100   | \<1.0%   |
+----------+--------+---------+--------+---------+-------+----------+
| Timber   | 11,445 | 61%     | 11,445 | 61%     | 1     | 61%      |
|          |        |         |        |         | 1,445 |          |
+----------+--------+---------+--------+---------+-------+----------+
| Agr      | 2,350  | 13%     | 2,302  | 12%     | 2,274 | 12%      |
| iculture |        |         |        |         |       |          |
| and      |        |         |        |         |       |          |
| Dairy    |        |         |        |         |       |          |
+----------+--------+---------+--------+---------+-------+----------+
| Res      | 439    | 2.3%    | 439    | 2.3%    | 439   | 2.3%     |
| idential |        |         |        |         |       |          |
+----------+--------+---------+--------+---------+-------+----------+
| Co       | 18     | \<1.0%  | 18     | \<1.0%  | 18    | \<1.0%   |
| mmercial |        |         |        |         |       |          |
+----------+--------+---------+--------+---------+-------+----------+
| Public   | 2,268  | 12%     | 2,268  | 12%     | 2,268 | 12%      |
+----------+--------+---------+--------+---------+-------+----------+
| Other^1^ | 1,811  | 10%     | 1,811  | 10%     | 1,811 | 10%      |
+----------+--------+---------+--------+---------+-------+----------+
| **Total  | **18   |         | **18   |         | **18, |          |
| Acres    | ,801** |         | ,801** |         | 801** |          |
| Availa   |        |         |        |         |       |          |
| ble^2^** |        |         |        |         |       |          |
+----------+--------+---------+--------+---------+-------+----------+
| ^1^      |        |         |        |         |       |          |
| \        |        |         |        |         |       |          |
| "Other\" |        |         |        |         |       |          |
| category |        |         |        |         |       |          |
| includes |        |         |        |         |       |          |
| s        |        |         |        |         |       |          |
| wampland |        |         |        |         |       |          |
| and tax  |        |         |        |         |       |          |
| exempt   |        |         |        |         |       |          |
| land.    |        |         |        |         |       |          |
|          |        |         |        |         |       |          |
| ^2^ The  |        |         |        |         |       |          |
| total    |        |         |        |         |       |          |
| YRFA     |        |         |        |         |       |          |
| acreage  |        |         |        |         |       |          |
| estimate |        |         |        |         |       |          |
| used in  |        |         |        |         |       |          |
| this     |        |         |        |         |       |          |
| analysis |        |         |        |         |       |          |
| is       |        |         |        |         |       |          |
| greater  |        |         |        |         |       |          |
| than the |        |         |        |         |       |          |
| official |        |         |        |         |       |          |
| total    |        |         |        |         |       |          |
| YRFA     |        |         |        |         |       |          |
| acreage  |        |         |        |         |       |          |
| (18,100  |        |         |        |         |       |          |
| acres;   |        |         |        |         |       |          |
| see      |        |         |        |         |       |          |
| Chapter  |        |         |        |         |       |          |
| 2). In   |        |         |        |         |       |          |
| appo     |        |         |        |         |       |          |
| rtioning |        |         |        |         |       |          |
| YRFA     |        |         |        |         |       |          |
| acreage  |        |         |        |         |       |          |
| across   |        |         |        |         |       |          |
| various  |        |         |        |         |       |          |
| land     |        |         |        |         |       |          |
| uses,    |        |         |        |         |       |          |
| parcels  |        |         |        |         |       |          |
| p        |        |         |        |         |       |          |
| artially |        |         |        |         |       |          |
| enc      |        |         |        |         |       |          |
| ompassed |        |         |        |         |       |          |
| by the   |        |         |        |         |       |          |
| YRFA     |        |         |        |         |       |          |
| boundary |        |         |        |         |       |          |
| were     |        |         |        |         |       |          |
| counted  |        |         |        |         |       |          |
| in their |        |         |        |         |       |          |
| e        |        |         |        |         |       |          |
| ntirety, |        |         |        |         |       |          |
| r        |        |         |        |         |       |          |
| esulting |        |         |        |         |       |          |
| in an    |        |         |        |         |       |          |
| acreage  |        |         |        |         |       |          |
| estimate |        |         |        |         |       |          |
| larger   |        |         |        |         |       |          |
| than the |        |         |        |         |       |          |
| official |        |         |        |         |       |          |
| YRFA     |        |         |        |         |       |          |
| e        |        |         |        |         |       |          |
| stimate. |        |         |        |         |       |          |
| To avoid |        |         |        |         |       |          |
| losing   |        |         |        |         |       |          |
| p        |        |         |        |         |       |          |
| recision |        |         |        |         |       |          |
| by       |        |         |        |         |       |          |
| a        |        |         |        |         |       |          |
| djusting |        |         |        |         |       |          |
| these    |        |         |        |         |       |          |
| e        |        |         |        |         |       |          |
| stimates |        |         |        |         |       |          |
| using a  |        |         |        |         |       |          |
| scaling  |        |         |        |         |       |          |
| factor,  |        |         |        |         |       |          |
| and      |        |         |        |         |       |          |
| because  |        |         |        |         |       |          |
| the      |        |         |        |         |       |          |
| analysis |        |         |        |         |       |          |
| based on |        |         |        |         |       |          |
| these    |        |         |        |         |       |          |
| e        |        |         |        |         |       |          |
| stimates |        |         |        |         |       |          |
| examines |        |         |        |         |       |          |
| in       |        |         |        |         |       |          |
| dividual |        |         |        |         |       |          |
| acres    |        |         |        |         |       |          |
| rather   |        |         |        |         |       |          |
| than the |        |         |        |         |       |          |
| YRFA as  |        |         |        |         |       |          |
| a whole, |        |         |        |         |       |          |
| we used  |        |         |        |         |       |          |
| the      |        |         |        |         |       |          |
| larger   |        |         |        |         |       |          |
| number   |        |         |        |         |       |          |
| in our   |        |         |        |         |       |          |
| a        |        |         |        |         |       |          |
| nalysis. |        |         |        |         |       |          |
|          |        |         |        |         |       |          |
| Source:  |        |         |        |         |       |          |
| IEc      |        |         |        |         |       |          |
| a        |        |         |        |         |       |          |
| nalysis. |        |         |        |         |       |          |
+----------+--------+---------+--------+---------+-------+----------+

### Land Use in the 15- and 30-Year Scenarios

IEc also estimated the characteristics of YRFA land use in 2011 and
2026. The following information and assumptions underlie these projected
land use scenarios:

-   The amount of land devoted to cranberry production is expected to
    increase at a rate of approximately four percent annually between
    1996 and 2011 and 1.5 percent annually between 2012 and 2026.[^2]

-   Expansion of cranberry and potato production is expected to occur on
    acreage formerly devoted to other (nonspecific) agricultural
    production.[^3]

-   The amount of land devoted to potato production has been nearly
    stable for a decade and is assumed to increase only slightly in the
    future.[^4]

-   Residential expansion over the 30-year time horizon will be limited
    as a result of poor ground water quality and a high water table.[^5]

-   Commercial (manufacturing) land use is not expected to increase
    significantly over the time horizon of this analysis.

-   Existing public lands will not be sold for commercial
    development.[^6]

Exhibit 4-1 presents the expected acreage devoted to various land uses
in the YRFA in the 15- and 30-year scenarios, as well as the
corresponding percentage of total YRFA land represented by each of those
uses. Reflecting the assumptions listed above, acreage devoted to
cranberry, potato and nonspecific agricultural production are estimated
to change over the 15- and 30-year time periods. Conversely, the
percentage of land devoted to other uses remains constant.

## Industry Acre Analysis

To allow Refuge management and other interested officials to estimate
the regional economic impacts of acquiring additional Refuge land, we
developed the concept of an industry acre. The contribution of an
industry acre to regional output represents the total regional impact of
the Refuge acquiring an acre of land that, prior to acquisition, was
used for a specific purpose.

### Development of Industry Acre Estimates 

To estimate the regional economic contribution of YRFA industries, we
developed an IMPLAN model for each of the commercial activities of
interest: nonspecific agriculture production, cranberry production,
potato production and timber harvesting. Similar to the model for the
existing Refuge presented in Chapter 3, this model assumes a reduction
in annual output equal to the output of the acreage (listed in Exhibit
4-1) currently devoted to each use in the YRFA. The model produces an
estimate of the total economic contribution to the four-county study
area of the existing acreage devoted to each use.

To estimate the economic contribution of each acre devoted to a
particular activity, we then divide the total output contribution
estimated in the IMPLAN analysis for each activity by the number of
acres dedicated to that activity in the YRFA.

### Results of Industry Acre Analysis

Exhibit 4-2 presents the contribution of each industry acre in the YRFA
to the regional economy. The regional economic contribution of an acre
in cranberry production is significantly higher than land in other uses.
Potato farming produces the second largest effect on the regional
economy, followed by nonspecific agriculture and finally timber
production.

## Composite Acre Analysis

Under some potential acquisition scenarios, the current use of land
proposed for acquisition may be unknown. Therefore, estimates of the
per-acre regional economic contribution of various land uses, such as
those shown in Exhibit 4-2, may be of limited use. To provide a metric
for estimating the regional economic impact of an acquisition scenario
in the absence of complete information, we develop and estimate the
regional economic contribution of a \"composite acre\". A composite acre
reflects the weighted average of each industrial land use in the entire
YRFA. Similarly, the regional economic impact associated with acquiring
such a hypothetical composite acre reflects the proportional regional
economic impact of each of the underlying land uses. Although not a
perfect substitute for the \"industry acre\", described above, the
composite acre contribution estimate provides a reasonable approximation
of the regional economic impact of acquiring an acre of land in cases
where land use information is unknown.

<table>
<colgroup>
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 7%" />
<col style="width: 5%" />
<col style="width: 7%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 6%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 8%" />
<col style="width: 6%" />
<col style="width: 7%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="13"><p><strong>Exhibit 4-2</strong></p>
<p><strong>REGIONAL ECONOMIC IMPACT PER ACRE OF LAND IN VARIOUS
USES</strong></p>
<p><strong>UNDER BASELINE, 15- AND 30-YEAR SCENARIOS
(1996$)</strong></p></td>
</tr>
<tr class="even">
<td></td>
<td colspan="4"><strong>1996 (Baseline)</strong></td>
<td colspan="4"><strong>2011 (15-Year)</strong></td>
<td colspan="4"><strong>2026 (30-Year)</strong></td>
</tr>
<tr class="odd">
<td><strong>Land Use</strong></td>
<td><strong>Output</strong></td>
<td><strong>Total Impact</strong></td>
<td><strong>Acre-age</strong></td>
<td><strong>Per-Acre Impact</strong></td>
<td><strong>Output</strong></td>
<td><strong>Total Impact</strong></td>
<td><strong>Acre-age</strong></td>
<td><strong>Per-Acre Impact</strong></td>
<td><strong>Output</strong></td>
<td><strong>Total Impact</strong></td>
<td><strong>Acre-age</strong></td>
<td><strong>Per-Acre Impact</strong></td>
</tr>
<tr class="even">
<td>Cranberry Production</td>
<td>$3,904,000</td>
<td>$5,506,854</td>
<td>400</td>
<td>$13,767</td>
<td>$4,226,080</td>
<td>$5,961,169</td>
<td>433</td>
<td>$13,767</td>
<td>$4,352,960</td>
<td>$6,140,142</td>
<td>446</td>
<td>$13,767</td>
</tr>
<tr class="odd">
<td>Potato Production</td>
<td>$124,215</td>
<td>$167,768</td>
<td>70</td>
<td>$2,397</td>
<td>$150,833</td>
<td>$203,719</td>
<td>85</td>
<td>$2,397</td>
<td>$177,450</td>
<td>$239,669</td>
<td>100</td>
<td>$2,397</td>
</tr>
<tr class="even">
<td>Agricul-ture and Dairy</td>
<td>$846,000</td>
<td>$1,356,046</td>
<td>2,350</td>
<td>$577</td>
<td>$828,720</td>
<td>$1,328,349</td>
<td>2,302</td>
<td>$577</td>
<td>$818,640</td>
<td>$1,312,192</td>
<td>2,274</td>
<td>$577</td>
</tr>
<tr class="odd">
<td>Timber Harvesting</td>
<td>$132,648</td>
<td>$170,438</td>
<td>11,445</td>
<td>$15</td>
<td>$132,648</td>
<td>$170,438</td>
<td>11,455</td>
<td>$15</td>
<td>$132,648</td>
<td>$170,438</td>
<td>11,445</td>
<td>$15</td>
</tr>
<tr class="even">
<td colspan="13">Source: IEc IMPLAN analysis.</td>
</tr>
</tbody>
</table>

To develop the composite acre analysis, we begin with the per-acre
industry estimates presented in Exhibit 4-2. We multiply these per-acre
estimates by the fraction of YRFA land devoted to that use, and sum
these fractional contributions to yield the regional economic
contribution of a hypothetical composite acre.

Exhibit 4-3 presents our estimates of the regional economic contribution
of a composite acre for the baseline (1996), 15-year and 30-year
scenarios. The composite acre, as noted above, reflects a mixture of
land uses, including cranberry farms, potato farms, timber tracts and
miscellaneous agricultural production. The regional economic
contribution of the composite acre increases over time primarily because
the proportion of land in the YRFA devoted to cranberry and potato
production is expected to rise. Cranberry production and potato
production provide the largest and second largest contributions per acre
to the regional economy, and therefore as their proportion of the
composite acre grows, the economic contribution of the composite grows
as well. In addition, the proportion of acreage devoted to nonspecific
agricultural production, which contributes less per acre to the regional
economy than cranberry or potato production, falls. The proportions of
the other land uses in the composite acre, as well as their
contributions per acre, remain constant over the time period of the
analysis.

+------------------------+---------------------+----------------------+
| **Exhibit 4-3**        |                     |                      |
|                        |                     |                      |
| **REGIONAL ECONOMIC    |                     |                      |
| CONTRIBUTION**         |                     |                      |
|                        |                     |                      |
| **OF COMPOSITE ACRE IN |                     |                      |
| YRFA AND EXISTING NNWR |                     |                      |
| ACRE**                 |                     |                      |
|                        |                     |                      |
| **FOR BASELINE,        |                     |                      |
| 15-YEAR AND 30-YEAR    |                     |                      |
| SCENARIOS (1996\$)**   |                     |                      |
+------------------------+---------------------+----------------------+
| **Scenario**           | **YRFA Composite    | **Existing NNWR**    |
|                        | Acre Contribution** |                      |
|                        |                     | **Acre               |
|                        |                     | Contribution**       |
+------------------------+---------------------+----------------------+
| Baseline (1996)        | \$383.30            | \$85.56              |
+------------------------+---------------------+----------------------+
| 15-Year (2011)         | \$408.50            | \$92.19              |
+------------------------+---------------------+----------------------+
| 30-Year (2026)         | \$417.87            | \$101.21             |
+------------------------+---------------------+----------------------+
| Source: IEc IMPLAN     |                     |                      |
| analysis.              |                     |                      |
+------------------------+---------------------+----------------------+

In Exhibit 4-3, we also present the per-acre regional economic
contribution of existing NNWR acres, to provide context to composite
acre contributions. The estimates for the per-acre regional economic
contribution of the existing NNWR consist of the total, from Chapter 3,
of the annual contribution of commercial, governmental and recreational
activities taking place on the existing Refuge divided by the total
current Refuge acreage (43,655 acres). On a per-acre basis, the
contribution of the existing Refuge is not as great as the contribution
of the current use of the YRFA lands.

# tAX IMPACTS of YRFA acquisition

In addition to the potential commercial revenues that may be lost under
the YRFA acquisition scenario, communities in which these lands are
located would also forego tax receipts. Below we estimate the tax
receipts per acre of land that would be foregone should the NNWR acquire
land in the YRFA. These revenues are estimated for each land use type
(\"industry acre\") and for a representative (\"composite acre\").
Because land usage does not change significantly over the 30-year period
of analysis, we estimate tax impacts for the baseline (1996) only.

## Tax Revenue Per Industry Acre

Our analysis with tax impacts begins with an estimate of the tax revenue
currently collected on a parcel dedicated to a particular industry use.
To estimate tax revenue, we performed the following calculations:

-   To estimate total land value, we tabulated property listings for all
    lands within the YRFA boundaries in both Juneau and Wood counties,
    including any improvements.[^7]

-   We estimated the appraised value of lands using a weighted average
    assessment ratio of 88 percent of market value, based on ratios of
    the towns surrounding the YRFA in Juneau and Wood counties.

-   We developed a weighted tax of \$22.76 per \$1,000 of appraised
    property value based on the weighted average tax rates of the towns
    surrounding the YRFA in Juneau and Wood counties.[^8]

We then estimated the tax per activity acre (e.g., tax per acre of land
in cranberry production) by multiplying the total appraised property
value by the weighted tax, then dividing by the respective number of
industry acres. Exhibit 4-4 shows the estimated tax per acre of YRFA
land in various uses. As would be expected, residential acreage has the
highest per-acre tax, followed by cranberry farm acreage.

## Refuge Revenue Sharing Payments Per Industry Acre 

In the event that the Refuge assumes control of YRFA acreage, taxes
would not longer be assessed to those lands. However, the Refuge Revenue
Sharing Act of 1935, as amended,

+------------+-----------+----------+-----------+---------+----------+
| **Exhibit  |           |          |           |         |          |
| 4-4**      |           |          |           |         |          |
|            |           |          |           |         |          |
| **FOREGONE |           |          |           |         |          |
| TAX PER    |           |          |           |         |          |
| INDUSTRY   |           |          |           |         |          |
| AND        |           |          |           |         |          |
| COMPOSITE  |           |          |           |         |          |
| ACRES      |           |          |           |         |          |
| (1996\$)** |           |          |           |         |          |
+============+===========+==========+===========+=========+==========+
|            |           | **FWS    |           | **Net   |          |
|            |           | Refuge   |           | Forgone |          |
|            |           | R        |           | Tax**   |          |
|            |           | evenue** |           |         |          |
|            |           |          |           | **Per   |          |
|            |           | *        |           | Acre**  |          |
|            |           | *Sharing |           |         |          |
|            |           | P        |           |         |          |
|            |           | ayment** |           |         |          |
+------------+-----------+----------+-----------+---------+----------+
| **Acre     | **Tax Per | **66% of | **94% of  | **66%   | **94% of |
| Use**      | Acre**    | RRS      | RRS       | of RRS  | RRS      |
|            |           | P        | Payment** | Pa      | P        |
|            |           | ayment** |           | yment** | ayment** |
+------------+-----------+----------+-----------+---------+----------+
| Ag         | \$6.49    | \$1.41   | \$2.01    | \$5.08  | \$4.48   |
| ricultural |           |          |           |         |          |
+------------+-----------+----------+-----------+---------+----------+
| Cranberry  | \$158.44  | \$34.46  | \$49.08   | \       | \$109.36 |
|            |           |          |           | $123.98 |          |
+------------+-----------+----------+-----------+---------+----------+
| Potato     | \$9.18    | \$2.00   | \$2.84    | \$7.18  | \$6.34   |
+------------+-----------+----------+-----------+---------+----------+
| Timber     | \$6.47    | \$1.41   | \$2.00    | \$5.06  | \$4.47   |
+------------+-----------+----------+-----------+---------+----------+
| Timber MFL | \$6.21    | \$1.35   | \$1.92    | \$4.86  | \$4.29   |
| ^1^        |           |          |           |         |          |
+------------+-----------+----------+-----------+---------+----------+
| Commercial | \$20.46   | \$4.45   | \$6.34    | \$16.01 | \$14.12  |
+------------+-----------+----------+-----------+---------+----------+
| R          | \$199.19  | \$43.32  | \$61.70   | \       | \$137.49 |
| esidential |           |          |           | $155.87 |          |
+------------+-----------+----------+-----------+---------+----------+
| Swamp and  | \$3.11    | \$0.68   | \$0.96    | \$2.43  | \$2.15   |
| Waste      |           |          |           |         |          |
+------------+-----------+----------+-----------+---------+----------+
| COMPOSITE  | \$8.12    | \$1.76   | \$2.51    | \$6.36  | \$5.61   |
+------------+-----------+----------+-----------+---------+----------+
| ^1^        |           |          |           |         |          |
| Managed    |           |          |           |         |          |
| Forest Law |           |          |           |         |          |
| Land       |           |          |           |         |          |
|            |           |          |           |         |          |
| Source:    |           |          |           |         |          |
| IEc        |           |          |           |         |          |
| analysis.  |           |          |           |         |          |
+------------+-----------+----------+-----------+---------+----------+

provides that FWS, on behalf of the Refuge, make annual Refuge Revenue
Sharing (RRS) payments to counties or the lowest unit of government that
collects and distributes property taxes. In the state of Wisconsin, each
town is responsible for collecting property taxes. Payments to towns are
based on the whichever of the following calculations results in the
largest amount:

-   \$0.75 per Refuge acre;

-   25 percent of the net receipts collected from Refuge lands in the
    county; or

-   Three-quarters of one percent of the appraised property value of the
    Refuge.

In the State of Wisconsin, three-quarters of one percent of the NNWR
appraised property value yields the greatest RRS payment. Thus, we
estimate the annual RRS payment for each YRFA industry acre by
multiplying the appraised property value by three-quarters of one
percent.

However, historically FWS has paid only a fraction of its annual RRS
payment, generally between 66 and 94 percent of the estimated total.
Therefore, to calculate the effective RRS payment, we multiply the
estimated payment by 66 and 94 percent, respectively, to estimate a

range for the effective annual payment. Columns three and four of
Exhibit 4-4 show this range for YRFA land in various uses. Like tax
assessments, RRS payments are greatest on land used for residential
homes and cranberry crops.

## Foregone Tax Revenue Per Industry Acre

We estimated the net foregone tax per activity acre as total tax per
activity acre less the estimated effective range of RRS payments. This
foregone tax represents the funds that would not be collected for each
acre of land the NNWR acquires in the YRFA currently in that particular
land use.

Exhibit 4-4 presents the foregone tax revenue for each of the current
land use designations. The second column shows the tax per acre of
industry land and the third and fourth columns show the effective FWS
RRS payments for that acre at 66 and 94 percent of the estimated
payment. The final two columns show the difference between the tax per
acre and the range of effective RRS payments, which is the foregone tax
revenue per industry acre. Foregone taxes range from a low of \$2.15 for
wetlands to \$155.87 for residential land.

## Foregone Tax Revenue for a Composite Acre 

Similar to the analysis for the regional economic impact of a composite
acre provided earlier in the chapter, we also develop an estimate of the
foregone tax associated with a composite acre. This acre reflects the
proportions of land in the YRFA currently dedicated to various
industrial activities. Therefore, the tax per composite acre represents
the weighted average of the taxes for various activity acres in the
YRFA. We calculate the composite acre tax by estimating the proportional
tax contribution of each industry acre to the composite, then summing
them. As an example, agricultural land comprises 2,350 acres of the
YRFA, or about 13 percent of the total. The annual property tax for an
acre of agricultural land is \$6.49. Because agricultural land is 13
percent of the total YRFA, 13 percent of its tax is included in the
composite acre tax.

We then estimated the FWS contribution for a composite acre. First, we
multiply the total property value of the YRFA by the FWS percentage RRS
payment of three-quarters of one percent of the property value. Then, we
multiply the estimate by 64 to 94 percent to calculate the effective
annual RRS payment range.

The last row in Exhibit 4-4 presents the foregone tax revenue for a
composite acre.

# recreation AND REFUGE ACTIVITY impacts of YRFA acquisition

Expansion of the NNWR will provide additional recreational opportunities
for visitors and residents, possibly causing an increase in recreational
activity on the Refuge. The regional economic impact of removing YRFA
acreage from agricultural or other private sector use and incorporating
it into the Refuge will be mitigated somewhat by the fact that increased
recreation will spur regional economic activity.

In Chapter 3, we develop estimates of the regional economic contribution
of NNWR recreation. To extrapolate these estimates to potential
recreation on the YRFA, we transform these estimates to reflect the
regional economic contribution per recreational acre of each activity.
Because the hunting and fishing seasons are expected to be the same on
the YRFA and the existing refuge, we do not make adjustments for length
of season. We then divide the total economic contribution of recreation
by acreage to arrive at the per-acre recreation contribution for each
type of recreation. Exhibit 4-5 presents these estimates for each major
recreational activity and for the total of the three activities.

+-----------------+-----------------+-----------------+-----------------+
| **Exhibit 4-5** |                 |                 |                 |
|                 |                 |                 |                 |
| **REGIONAL      |                 |                 |                 |
| ECONOMIC        |                 |                 |                 |
| CONTRIBUTION OF |                 |                 |                 |
| RECREATION PER  |                 |                 |                 |
| ACRE OF YRFA    |                 |                 |                 |
| LAND FOR**      |                 |                 |                 |
|                 |                 |                 |                 |
| **BASELINE,     |                 |                 |                 |
| 15-YEAR AND     |                 |                 |                 |
| 30-YEAR         |                 |                 |                 |
| SCENARIOS       |                 |                 |                 |
| (1996\$)**      |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| **Activity**    | **1996          | **2011          | **2026          |
|                 | (Baseline)**    | (15-Year)**     | (30-Year)**     |
+-----------------+-----------------+-----------------+-----------------+
| Fishing         | \$16.72         | \$16.72         | \$16.72         |
+-----------------+-----------------+-----------------+-----------------+
| Hunting         | \$17.13         | \$11.78         | \$8.09          |
+-----------------+-----------------+-----------------+-----------------+
| Wildlife        | \$47.06         | \$55.47         | \$65.71         |
| Viewing         |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
| TOTAL           | \$80.91         | \$83.97         | \$90.52         |
+-----------------+-----------------+-----------------+-----------------+
| Source: IEc     |                 |                 |                 |
| analysis.       |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+

These estimates are significantly smaller than the per-acre regional
economic impact shown in column two of Exhibit 4-3. Exhibit 4-6 presents
the net regional economic impact per acre, which reflects the difference
between the regional economic impact and the mitigating contribution of
projected increased recreation on the YRFA.

One way to mitigate the net economic impact of the acquisition scenario
would be to increase the level of recreational activity per acre, to
increase the economic activity associated with purchases made for
recreation in the region. To estimate the number of additional
recreation days needed, we assume that the economic contribution of a
recreation day would be the same for the YRFA as for the existing
Refuge. We then calculate the number of additional days per acre
required to stimulate enough economic activity to offset the net
economic impact per acre. Exhibit 4-6 presents the estimates of days
needed per activity type. As would be expected, the number of days
required to offset the economic impact per acre increases over time as
the economic contribution of a YRFA acre used for industrial purposes
increases. For comparison purposes, current recreational use on the
existing Refuge is 0.5 days of fishing per acre, 0.6 days of hunting per
acre, and 2.4 days of recreation per acre. Therefore, the increase in
recreation days required to mitigate completely the economic impact of
acquisition is substantial.

+------------+------------+-------------+------------+-------+-------+
| **Exhibit  |            |             |            |       |       |
| 4-6**      |            |             |            |       |       |
|            |            |             |            |       |       |
| **NET      |            |             |            |       |       |
| ECONOMIC   |            |             |            |       |       |
| IMPACT OF  |            |             |            |       |       |
| YRFA**     |            |             |            |       |       |
+------------+------------+-------------+------------+-------+-------+
| **         | **\        | **Economic  | **Net      | **\   |       |
| Scenario** | Economic   | C           | Economic   | Addit |       |
|            | Impact Per | ontribution | Impact Per | ional |       |
|            | Acre^1^**  | of New      | Acre**     | Recre |       |
|            |            | R           |            | ation |       |
|            |            | ecreational |            | Days  |       |
|            |            | Activity    |            | Per   |       |
|            |            | Per Acre**  |            | Acre  |       |
|            |            |             |            | N     |       |
|            |            |             |            | eeded |       |
|            |            |             |            | to    |       |
|            |            |             |            | O     |       |
|            |            |             |            | ffset |       |
|            |            |             |            | I     |       |
|            |            |             |            | mpact |       |
|            |            |             |            | ^2^** |       |
+------------+------------+-------------+------------+-------+-------+
| 1996       | \$383.30   | \$80.91     | (\$302.39) | Fi    | 9.1   |
| (Baseline) |            |             |            | shing |       |
+------------+------------+-------------+------------+-------+-------+
|            |            |             |            | Hu    | 11.5  |
|            |            |             |            | nting |       |
+------------+------------+-------------+------------+-------+-------+
|            |            |             |            | Vi    | 15.7  |
|            |            |             |            | ewing |       |
+------------+------------+-------------+------------+-------+-------+
| 2011       | \$408.50   | \$83.97     | (\$324.53) | Fi    | 9.8   |
| (15-Year)  |            |             |            | shing |       |
+------------+------------+-------------+------------+-------+-------+
|            |            |             |            | Hu    | 12.0  |
|            |            |             |            | nting |       |
+------------+------------+-------------+------------+-------+-------+
|            |            |             |            | Vi    | 16.9  |
|            |            |             |            | ewing |       |
+------------+------------+-------------+------------+-------+-------+
| 2026       | \$417.87   | \$90.52     | (\$327.35) | Fi    | 9.9   |
| (30-Year)  |            |             |            | shing |       |
+------------+------------+-------------+------------+-------+-------+
|            |            |             |            | Hu    | 12.2  |
|            |            |             |            | nting |       |
+------------+------------+-------------+------------+-------+-------+
|            |            |             |            | Vi    | 17.0  |
|            |            |             |            | ewing |       |
+------------+------------+-------------+------------+-------+-------+
| ^1^ The    |            |             |            |       |       |
| estimates  |            |             |            |       |       |
| reported   |            |             |            |       |       |
| are for    |            |             |            |       |       |
| the        |            |             |            |       |       |
| composite  |            |             |            |       |       |
| acre.      |            |             |            |       |       |
|            |            |             |            |       |       |
| ^2^ The    |            |             |            |       |       |
| estimates  |            |             |            |       |       |
| of days    |            |             |            |       |       |
| are        |            |             |            |       |       |
| mutually   |            |             |            |       |       |
| exclusive. |            |             |            |       |       |
| For        |            |             |            |       |       |
| example,   |            |             |            |       |       |
| in the     |            |             |            |       |       |
| baseline   |            |             |            |       |       |
| scenario,  |            |             |            |       |       |
| *either*   |            |             |            |       |       |
| 9.1        |            |             |            |       |       |
| fishing    |            |             |            |       |       |
| days, *or* |            |             |            |       |       |
| 11.5       |            |             |            |       |       |
| hunting    |            |             |            |       |       |
| days, *or* |            |             |            |       |       |
| 15.7       |            |             |            |       |       |
| viewing    |            |             |            |       |       |
| days would |            |             |            |       |       |
| be         |            |             |            |       |       |
| required   |            |             |            |       |       |
| to offset  |            |             |            |       |       |
| the net    |            |             |            |       |       |
| economic   |            |             |            |       |       |
| impact.    |            |             |            |       |       |
|            |            |             |            |       |       |
| Source:    |            |             |            |       |       |
| IEc        |            |             |            |       |       |
| analysis.  |            |             |            |       |       |
+------------+------------+-------------+------------+-------+-------+

# SUMMARY

This chapter estimated the regional economic impacts, the local tax
impacts, and the economic contribution of additional recreational
activity that would result from NNWR land acquisition in the YRFA. We
present regional economic impacts on a per-acre basis, using two types
of metrics. Specifically, we use IMPLAN to estimate the regional
economic impact of each \"industry acre\", or acre currently in
agricultural use, as well as a \"composite acre\" which reflects the
proportions of land currently in various uses in the region. These
per-acre estimates reflect the regional economic impact of the Refuge
acquiring an acre of land currently used for a specific industry or an
acre in nonspecific use. Our analysis showed:

-   The regional economic contribution of an industry acre ranges from a
    low of \$15 for the timber industry to a high of \$13,767 for the
    cranberry production industry.

-   The regional economic contribution of a composite acre ranges from
    \$383.30 in the base year scenario to \$417.87 in the 30-year
    scenario.

The tax impact analysis is based on the fact that current taxes paid on
YRFA land are greater than the RRS payment that the FWS would pay if
YRFA land were acquired. Similar to the regional economic impact
analysis, we calculated the net foregone tax revenue on a per-acre basis
for both an industry acre and a composite acre. The analysis calculates
the total tax paid on YRFA lands, subtracts the RRS payment (expressed
as a range to reflect uncertainty in the effective payment rate), and
arrives at a net foregone tax. Net foregone taxes for specific industry
acres range from a low of \$2.15 for wetlands assuming an effective RRS
payment of 94 percent to \$155.87 for residential land assuming an
effective RRS payment of 66 percent, while the net foregone tax revenue
for a composite acre ranges from \$8.95 to \$10.14 assuming a range of
94 to 66 percent, respectively.

Finally, the analysis examines the regional economic contribution of
additional recreation on the YRFA. The analysis estimates the net
economic impact of acquiring an acre of YRFA land, and presents a
summary of the number of additional recreation days per acre necessary
to stimulate enough regional economic activity to offset the impact. The
net economic impact per acre ranges from approximately \$302.39 in 1996
to \$327.35 in 2026. The number of additional recreation days required
to mitigate this impact ranges from a low of 9.1 fishing days in 1996 to
a high of 17.0 wildlife viewing days in 2026.

[^1]: Data compiled by Hawthorne Beyer, University of Wisconsin, October
    1997.

[^2]: Wisconsin Department of Agriculture, Trade, and Consumer
    Protection, *Wisconsin Agricultural Statistics, 1997;* personal
    communications with Refuge management and local assessors, September
    1997.

[^3]: Personal communication with Larry Wargowsky, February 1998.

[^4]: Personal communications with Juneau and Wood County Agricultural
    Extension Officers, September 1997 and with Larry Wargowsky,
    February 1998.

[^5]: Personal communications with local assessors, September 1997.

[^6]: Personal communication with Juneau County Agricultural Extension
    Officer, September 1997. As of March 1, 1997, the majority of county
    lands within the YRFA have been officially listed as \"county forest
    lands.\" With this designation, it is very unlikely that this land
    will ever be sold. Some county land listed as \"community forest
    lands\" may be sold, but this area accounts for only a minor portion
    of county owned land in this region.

[^7]: Data compiled by Hawthorne Beyer, University of Wisconsin, October
    1997.

[^8]: These towns are: Armenia, Finley, Kingston and Necedah in Juneau
    County; and Remington and Dexterville in Wood County. Because about
    75 percent of the YRFA is in Juneau County, the weights were 75
    percent for Juneau County and 25 percent for Wood County.