USF economist says RNC was more bust than boom for Hillsborough

Delegates and guests of the Republican National Convention gather for drinks at the CNN Grill, which was set up near the Tampa Bay Times Forum during 2012’s event.
Delegates and guests of the Republican National Convention gather for drinks at the CNN Grill, which was set up near the Tampa Bay Times Forum during 2012’s event.
Published Sept. 3, 2013

TAMPA — Local officials recently celebrated a study concluding that the Republican National Convention generated $214 million in direct spending across eight counties across Tampa Bay, and $404 million once you factor in a "multiplier" effect of people spending and re-spending all that money.

For a dissenting view, meet University of South Florida economist Philip Porter.

"If there was an impact, it was negative," Porter said last week in an email response to an inquiry from the Tampa Bay Times.

It's the latest in nearly 15 years of conclusions that run counter to the optimism of civic boosters and promoters of blockbuster events.

It started in 1999, with the claim that the Super Bowl brought $300 million in economic impact to its host cities.

Porter looked at taxable sales, hotel bookings and airline passengers in Hillsborough County, Miami-Dade County and Maricopa County in Arizona for a half-dozen different Super Bowls.

Contrary to the National Football League's claims, Porter concluded that the championship did not move the economic needle for its host cities. (Since then, more than 40 studies and papers by other economists have reached similar conclusions about the economic impact — or lack thereof — of the Olympics, the NCAA Final Four, World Cup soccer and the World Series.)

In the same way, Porter says the RNC fails to show up in tax revenue and taxable sales statistics for Hillsborough County. For the evidence, he says, look at this:

From August 2010 to August 2011, sales tax revenues in Hillsborough grew at 5.88 percent — faster than in the rest of the state, where growth was 5.44 percent.

But from August 2011 to August 2012, the month of the convention, tax revenues in Hillsborough rose about 6.75 percent — lower than the 6.92 percent seen in the rest of the state.

Taxable sales statistics were similar, Porter said.

From August 2011 to August 2012 sales in Hillsborough rose 5.83 percent — less than the 6.31 percent seen in the rest of Florida.

"Comparing August to August over time, it is apparent that the RNC did not stimulate economic activity in Hillsborough County," Porter concludes.

Apples and oranges, responds the Tampa Bay Host Committee, which commissioned the study that found a $214 million impact. That study was done by University of Tampa economics department chairman Brian T. Kench, who was paid $12,800, though a big chunk of that money was spent on economic analysis software.

In response to Porter, Kench pointed to a couple of key differences between his study and the numbers Porter examined.

For one thing, Porter looked at taxable sales, but Kench considered gross sales, which include nontaxable sales and thus take in a wider range of economic activity.

"Many services are not taxed," Kench said in an email.

Include those, and Hillsborough's overall sales rose nearly 10.5 percent from August 2011 to August 2012 — nearly double the 5.8 percent growth in the rest of the state for the same two months.

Kench said another significant difference comes with including seven other Tampa Bay area counties — Pinellas, Pasco, Hernando, Citrus, Manatee, Sarasota and Polk — that benefited from the convention with the rest of Florida. Do that, he said, and "you inflate the control group," skewing the difference between Hillsborough County alone and "Florida minus Hillsborough."

In 2012, Hillsborough, Pinellas, Pasco and Hernando saw a 4.8 percent change in gross sales for the 11 months that doesn't include August, according to Kench. But the change in August was double that, 9.8 percent.

"Something happened," and "I believe the RNC had something to do with the significant change," Kench concluded.

Porter, contends Tampa Bay Host Committee president Ken Jones, has been "selective in the data set. If you're going to refute a study, you need to refute it on an apples to apples basis, not apples to bicycles."

But this sort of disagreement is familiar territory for Jones and Porter, who jousted before the convention on the WUSF public affairs radio program Florida Matters, so Porter's conclusions came as no surprise.

"I think he's made similar comments about every single events that's ever been held in this area, whether it's the Super Bowl or the Frozen Four or the convention or a pick an event," Jones said, adding the host committee study used a proven and widely accepted econometric analysis model known as IMPLAN. "I think we've got the figures and the model to back up our claim."

Richard Danielson can be reached at (813) 226-3403, or @Danielson_Times on Twitter.