Impact of a Mill Closure on Jobs, Income & Output in
Shasta County, California

Regional and Economic Sciences
Chico, California
530-342-9043

Economic Consultants Specializing in Impact Analysis & Survey Research

If the mill closes in Anderson, CA, 328 mill jobs and almost 200 logging jobs will be eliminated. That will bring the initial loss to 525. After the multiplier effects are taken into account, the county's loss will be more than 1,100 jobs and $60 million in income (1992 dollars) as shown in Table 1.

TABLE 1
Losses at the Mill Due to the 328 Employee Layoff
(1992 dollars)

Measure	Loss
Jobs	1,188
Income	$61.9 M
Output	$92.1 M

Regional and Economic Sciences (RES) used IMPLAN, an input-output model, to forecast the impact of the mill closure on income, jobs and output in Shasta County. Input-Output analysis was used because it is the only type of model that allows the user to forecast the impact of an initial change in spending in one industry on all other industries in an area. IMPLAN is an input-out model developed by the U. S. Department of Agriculture, Office of Emergency Services and the University of Minnesota, Department of Agricultural and Applied Economics. This computer model contains data on more than 200 industries in Shasta County. Table 2 shows the forecasted impact of the mill closing on city's sales tax revenues. The figures are based on the IMPLAN analysis and they are combined with forecasts of sales tax revenues.

TABLE 2
City of Anderson's Forecasted Sales Tax Revenues
(1992 dollars)

Year	Without Closure	With Closure
1992	$ .968 M to 1.025 M	dna
1993	$ .969 M to 1.055 M	$ .950 M to 1.037 M
1994	$ 1.016 M to 1.118 M	$ .996 M to 1.099 M

If the mill were to close on December 31, 1992, our analysis indicates a decrease in county income of approximately $61.9 million in 1993 the with unemployment benefits. The loss would be approximately $2 million greater in 1994 because workers would not collect unemployment benefits in that year.

To estimate the impact on Anderson's taxable transactions from this County wide loss of income, we regressed the City of Anderson's taxable transactions on personal income from the state. We estimate the loss in sales tax revenues to Anderson to be between $18,000 and $20,000 each year. In the second year after the closure, the loss of sales tax revenue will be about $18,500 to $20,500. Some of this increase is due to the fact that laid-off workers will not have had a chance to get jobs and will no longer be eligible for unemployment insurance benefits. Table 2 shows the effects of these impacts on Anderson's Sales Tax Revenues for 1993 through 1995.

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