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

these equaled $797.77. This expenditure demand included the actual usage as well as the availability or general benefit received
by employees (and their employers) from being located within the City <strong>of</strong> Manassas (e.g., theoretically, expenditures
for General Government equally benefit all residents and employees working within the City). Expenditures also include
debt service; this was allocated between residential and non-residential beneficiaries in proportion to the purpose <strong>of</strong> the
public debt (e.g., capital borrowing for school construction was charged only to residential uses).
Applying this model and its per-employee revenue and expenditure multipliers produced total values needed to calculate the
fiscal impact <strong>of</strong> <strong>Micron</strong> on the City <strong>of</strong> Manassas in FY 2005. <strong>The</strong> results <strong>of</strong> this calculation are presented in Table 6. With
total estimated revenues <strong>of</strong> $5.6 million—<strong>of</strong> which 90 percent are in the form <strong>of</strong> direct payments for real estate and personal
property, and with the dollar value <strong>of</strong> demands on the City’s services totaling an estimated at $808,141—the significance
<strong>of</strong> <strong>Micron</strong>’s fiscal contribution to the City is clear. Revenues exceed expenditure demand by a factor <strong>of</strong> 7; that is, for every
$1 <strong>of</strong> expenditure demand, <strong>Micron</strong> contributed $6.90 in revenues to the City’s treasury for a net benefit totaling $4.85 million.
Table 6: <strong>The</strong> Fiscal <strong>Impact</strong> <strong>of</strong> <strong>Micron</strong> on the City <strong>of</strong> Manassas
Sources
Values
Revenues
Real Estate and Other Property Taxes $5,010,000
Non-Property Tax Revenues* $647,398
Total Revenues $5,567,400
Total Expenditures** $808,141
Net fiscal <strong>Impact</strong> (Revenues/Expenditures) $4,849,259
Net Fiscal Benefit Per <strong>Micron</strong> Employee $4,787
Sources: City <strong>of</strong> Manassas Comprehensive Annual Financial Report and GMU Center for Regional Analysis. *based on per employee non-property tax revenue multiplier for 2005. **based on per
employee expenditure-demand multiplier for 2005.
<strong>The</strong> magnitude <strong>of</strong> this net fiscal benefit can be calibrated by expressing it in terms <strong>of</strong> <strong>Micron</strong>’s employment base. For each
<strong>of</strong> <strong>Micron</strong>’s 1,013 Manassas workers, <strong>Micron</strong>’s net fiscal contribution to the City equals $4,787. <strong>The</strong> significance <strong>of</strong> this
net fiscal contribution can be seen by calculating the budget impact <strong>of</strong> its absence; that is, if it had not existed. Without the
revenue surplus generated by <strong>Micron</strong> in FY 2005, the City’s budget would have had a deficit <strong>of</strong> $3.665 million rather than
registering a surplus <strong>of</strong> $1.184. In effect, this surplus allowed the City to lower its real estate tax rate in 2005 and to provide
public services to its residents that otherwise would have required a higher tax burden. In the absence <strong>of</strong> this fiscal surplus,
the real estate tax rate could have only been reduced from it 2004 rate <strong>of</strong> $1.15 per $100 assessed valuation to $1.086 per
$100 rather than the $1.00 rate actually adopted in 2005 with no year-end surplus. This fiscal benefit has important implications
to the City’s budget and to the added value its residents receive for the taxes they pay.
Summary <strong>of</strong> <strong>Impact</strong>s
<strong>The</strong> economic impacts generated by capital and operating expenditures by <strong>Micron</strong> in the City <strong>of</strong> Manassas, Prince William
County, Northern <strong>Virginia</strong>, and the Commonwealth <strong>of</strong> <strong>Virginia</strong> can be measured in terms <strong>of</strong> direct and total job creation,
added personal earnings that will accrue to local and state residents, and the additional jobs supported by this spending
beyond the direct workforce employed <strong>Micron</strong>. <strong>The</strong>se impacts are generated both by capital outlays that extend for the
duration <strong>of</strong> plants and equipment modernization and occur on an annual basis from direct payroll and operating outlays by
<strong>Micron</strong> for the daily operation <strong>of</strong> its Manassas plant.