The Impact of Micron Technology Virginia on the Economies of the ...

<strong>The</strong>se capital outlays and the work they supported within Northern <strong>Virginia</strong> and statewide generated additional personal
earnings for <strong>Virginia</strong> residents totaling $56.5 million in Northern <strong>Virginia</strong> and $99.3 million at the state level. <strong>The</strong>se new
personal earnings are taxable wage and salary payments received beyond the direct payroll paid to <strong>Micron</strong> employees (as
summarized previously in Table 2).
Since spending was recycled through the economy, this capital spending and respending within the local and state (and
national) economies also supports vendor jobs and jobs having broad-based effects. <strong>Micron</strong>’s capital spending, captured by
vendors and contractors located in Northern <strong>Virginia</strong>, supported 1,560 new jobs over the four-year period. At the state level
this capital spending supported 3,750 jobs. While most <strong>of</strong> these jobs would be located in the state, some <strong>of</strong> these job effects
would accrue to economies in surrounding states and across the nation.
Table 4: <strong>The</strong> Economic <strong>Impact</strong>s for Capital Outlays By <strong>Micron</strong> for
Plant and Equipment Modernization, FY 2002-2005 (in millions <strong>of</strong> current year dollars)
Jurisdiction Capital Total Personal Jobs
<strong>of</strong> Vendor Outlay (1) Output Earnings (3) Supported (4)
Northern <strong>Virginia</strong> $178.2 $279.0 $56.5 1560
<strong>Virginia</strong>* $179.0 $376.2 $99.3 3760
Sources: <strong>Micron</strong> <strong>Technology</strong>, Inc., GMU Center for Regional Analysis Notes: (1) accumulated capital spending reported by location <strong>of</strong> vendor; (2) the total value <strong>of</strong> goods and services generated
directly and indirectly as a result <strong>of</strong> the capital outlays within the jurisdiction; (3) the additional earnings generated within the respective jurisdiction from the new economic activities supported by
the capital outlays; (4) the additional new jobs supported nationwide by the spending and re-spending <strong>of</strong> the new capital outlays.*includes the capital outlays received by firms located in Northern
<strong>Virginia</strong>.
While this analysis <strong>of</strong> capital spending was confined to the fiscal year 2002–2005 period, continuing capital improvements
are programmed to maintain the plant’s efficiency and competitiveness. <strong>The</strong>se capital outlays are estimated to fall in the
$300–400 million range annually. Depending on changes in product strategy, these outlays could be considerably higher.
<strong>The</strong> portion <strong>of</strong> these outlays that would be captured by <strong>Virginia</strong>-based firms is not known at this time. However, based on
the <strong>Virginia</strong> and non-<strong>Virginia</strong> split <strong>of</strong> the capital outlays for the 2002–2005 period (15/85%), local vendors can expect to
benefit by at least $50 million annually from continued capital spending by <strong>Micron</strong> to maintain and upgrade its Manassas
plant.
<strong>The</strong> Economic <strong>Impact</strong>s <strong>of</strong> Operating Outlays
Annual spending by <strong>Micron</strong> to operate its Manassas plant involves both payroll (as discussed previously) and a wide range
<strong>of</strong> supporting overhead expenditures. Of <strong>Micron</strong>’s operating outlays in the City <strong>of</strong> Manassas and Prince William County,
payroll accounted for approximately 37 percent in 2005. Non-payroll spending includes service contracts and contract labor,
pr<strong>of</strong>essional and business services, outlays for regular maintenance and repairs, utilities, taxes, leases, and <strong>of</strong>fice equipment
and supplies. Statewide operating outlays reflect a slightly different mix <strong>of</strong> expenditures with direct payroll accounting
for 33.6 percent <strong>of</strong> total annual spending.
<strong>The</strong> importance <strong>of</strong> operating outlays beyond their magnitude ($49.2 million in the City <strong>of</strong> Manassas, $78.2 million in Prince
William County, and $134.7 million across Northern <strong>Virginia</strong>) is that they recur each year. <strong>The</strong>refore, the economic impacts
they generate, as reported in Table 5, are not one-time benefits such as those that flow from capital outlays, but continue to
support the local and state economies year after year.
<strong>The</strong> $49.2 million in direct operating outlays that <strong>Micron</strong> spent in the City <strong>of</strong> Manassas in 2005 added a total <strong>of</strong> $63.2 million
to the City’s estimated gross city product that year, reflecting a multiplier <strong>of</strong> approximately 1.2845; that is, for each
additional $1 <strong>of</strong> spending by <strong>Micron</strong> for its annual operations, the City’s economy realized a total benefit <strong>of</strong> $1.28. Additionally,
this local spending generated new annual personal earnings for City residents <strong>of</strong> $11.7 million and supported 400 jobs