2019

The Economic and Revenue Impact of Data Centers in Pennsylvania

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Econsult Solutions, Inc. (ESI) was retained by a coalition of data center developers and suppliers to analyze the potential growth of the industry in Pennsylvania if a full data center sales and use tax exemption existed, similar to what is available in more than 20 other states. Tax incentives have been cited as a driving factor in recent data center location decisions, but Pennsylvania has fallen behind. Since 2008, the state’s share of national data center industry employment has shrunk from 3.8% to 2.8%.

The ESI analyses indicates that by 2024, Pennsylvania would gain the following if a full data center sales and use tax exemption existed:

  • Over 33,000 additional total jobs, including 10,000 more jobs in data center sector.
  • Over $6 billion more in total output (direct, indirect and induced sales/revenue).
  • Over $2 billion more in total wages.
  • $110 million more in annual net tax revenues, after accounting for the sales tax exemption.
  • Increased county, municipal, and school district property tax revenue.

This expansion of data centers in Pennsylvania would also have additional community and economic impacts, including:

  • Diversification of local economies.
  • Investments in human capital with high-wage jobs.
  • Improvements to electric grid, including in rural areas.
  • Innovations in energy efficiency.
  • Increased broadband access, including in rural areas.

The Economic Impact of Green City, Clean Waters: The First Five Years

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ESI was commissioned by the Sustainable Business Network of Greater Philadelphia to articulate the local economic impact of Green City, Clean Waters (GCCW), an ambitious initiative of the Philadelphia Water Department that seeks to invest in green stormwater infrastructure (GSI) projects throughout the City of Philadelphia. GCCW fulfills federally established water quality requirements in ways that are simultaneously environmentally sustainable, positive for the local economy, and beneficial to neighborhoods throughout the City.

Green City, Clean Waters’ triple bottom line benefits include:

  • Economics: Green infrastructure provides a more affordable approach for Philadelphia and rate payers, circulates more dollars with the local business community, and improves property values.
  • Environment: Green infrastructure is less energy intensive than gray infrastructure, provides water and air quality improvements, enhances habitats, reduces the carbon footprint, provides an aggregate cooling effect, and enhances adaptability and resiliency.
  • Equity: Green infrastructure creates more neighborhood benefits and more accessible employment/business opportunities than gray infrastructure.

Early Intervention Program: Borough of Pottstown

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ESI, McNees Wallace & Nurick LLC , and SRW Strategies were engaged by the Borough of Pottstown to assist in developing a five-year financial plan as part of the Commonwealth’s Early Intervention Program. The plan included a Financial Conditions and Trends Analysis, Management Audit of all Borough departments, recommendations to improve the Borough’s fiscal position, and an implementation plan that assigned responsibilities and outlined benchmarks.

The final report included over 50 recommendations that addressed nearly every aspect of Borough operations including workforce compensation and staffing, organizational structure, and policies and procedures. The report reviewed the Borough’s existing tax structure and made recommendations to mitigate the need for future real estate tax increases and remain competitive for new business investment. The report included an in-depth review of the Borough’s economic development efforts and recommended strategies to expand the local tax base.

The Economic Value of Protected Open Space in Chester County, PA

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ESI was commissioned by the Natural Lands Trust, the Chester County Planning Commission and a coalition of funders and business leadership to update a 2010 report on the economic value of open space in Chester County, Pennsylvania. Since the original report, the amount of protected open space has increased significantly to 208.01 square miles.

Our report found that open space adds economic value in four major ways:

  • Home and property values
  • Economic activity
  • Environmental services
  • Direct use benefits – health and recreation

This study concluded that investments in open space preservation support the Chester County economy by increasing property values, supporting economic activity, reducing environmental costs, and supporting a healthier populace.

EDC Impact: Shaping the Pennsylvania Economy

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Economic development is an increasingly complex endeavor. Communities are competing on a global scale and the rules of competition are constantly changing. Local economic development provides the cornerstone of social and business networks that propel the local economy. Because a vibrant economy cannot be taken for granted and we cannot assume that every citizen is fully aware of the efforts undertaken at the local level to maintain and promote growth and prosperity, it is vital to document both the effort required and the impact of the results.

ESI partnered with Pennsylvania Economic Development Association (PEDA) and Fourth Economy to complete a study that details the economic impact of Economic Development Corporations (EDCs) throughout the state.

Campus Philly Releases “Philadelphia Renaissance: College student retention drives growth in the city and region”

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ESI assisted Campus Philly in developing its new report summarizing the impacts of retaining graduates from area colleges and universities on Philadelphia and the Delaware Valley. Released during its stakeholders conference “Young, Smart, and Local” April 9th, the report sets a course for higher ed and talent retention as an economic development strategy. Econsult Solutions Principal and Senior Vice President Lee Huang presented insights from the research as part of a panel discussion held during the conference.

ESI analyzed data from a variety of sources to measure growth in young graduates in Philadelphia relative to peer cities, and the local economic impact of that growth. The analysis found that from 2000 to 2017, the city’s overall population grew by 4 percent, but the number of young adults with college degrees increased by 115 percent, to 128,400. This growth rate exceeded all but one other major peer city. In addition, ESI employed a unique approached to mine student retention data from more than 1.2 million local alumni from Linked In’s “Career Insights” platform. Among the most recent cohort of attendees (2010-2014), 54% of alumni are currently within the Philadelphia region.

Campus Philly is fueling economic growth by encouraging college students to study, explore, live, and work in the Greater Philadelphia region. Its Young, Smart, & Local Conference, held April 9-10 engaged leaders from higher education, business, government, economic development, and community organizations to explore best practices for talent growth and attraction.

Econsult Solutions has helped institutions of higher education quantify and demonstrate their valuable impacts on communities. Learn more about our Solutions For Universities and Hospitals.

Media Coverage

Fernandez, Bob (2019, April 9) If Philly job growth doesn’t keep up, millennials will go where the good jobs are, new study warns; The  Inquirer, Retrieved from http://www.philly.com/business

Caffrey, Michelle (2019, April 9) Philadelphia beats out Boston in keeping college grads, new Campus Philly report finds; Philadelphia Business Journal, Retrieved from http://www.bizjournals.com/philadelphia/news