November 15, 2011

1. Port Of Caddo/Bossier Economic Forum November 15, 2011

2. Economic Impact of the Port on Caddo/Bossier Parishes Region 2006-10

3. Port Tenants • 20 at present • Types of firms: • Trucking firm, • recycling plant, • paper manufacturer, • steel manufacturer, • distribution companies, • energy firms for harvesting Haynesville Shale • Employment at 1,471

4. Data from Port Tenants • Detailed survey in early 2011 • 11 responses + data from LDED website • These 12 are by far largest; non-respondents are very small • Result: Our impact estimates are conservative • Gathered data on: • Capital expenditures (one-time) • Annual operating expenditures (continuing)

5. The “Multiplier Effect” Dropping a rock in your “economic pond”

6. Impact of Capital Expenditures 2006-2010

8. Impact of Capital Expenditures:2006-2010 • $626.1 mm in new business sales • $190.8 mm in new household earnings • Impact on jobs:

10. Impact of Operational Expenditures: • $1,976 mm in new business sales • $546.4 mm in new household earnings • 5.2% of all earnings in the 2-parish region • Impact on total (direct and indirect) jobs: • 7,550 jobs supported (1,471 direct; 6,079 indirect) • 4.6% of all jobs in the region • Job multiplier: 5.1

11. Combined Impact of Operational & Capital Expenditures: 2010 • $2 billion in new business sales • $560.6 mm in new household earnings • 7,930 jobs

12. Direct Tax Impacts on Local Governments • Asked about direct taxes only for 2010 • Complication: Few firms reported direct taxes paid on survey form • Tax Amount Firms • Property $553,303 5 • Sales $419,260 4 • Total $972,563

13. Indirect Taxes • People spend new household earnings and local government collects sales taxes • 2010: $14.2 mm new earnings from capital spending • 2010: $546.4 mm new earnings on operational spending • 2010: Total - $560.6 mm in new household earnings • About 2.42% is sales taxable in Caddo/Bossier • Equals $13.6 mm in indirect taxes collected in 2010 • Plus direct taxes 2010 of $972,563 = $14.5 mm

14. Proposed Capital Improvements Plan • High Priority Projects • 18 projects over years 1-5 • Total costs $45,013,000 • Medium Priority Projects • 4 projects over years 6-10 • Total costs: $13,840,000 • Low Priority Projects • 16 projects over years 11-20 • $70,719,000 • Total of all projects: $129.5 mm (in 2011 $s)

15. High Priority Projects • Several roadway extensions • Railroad storage areas • Railroad extensions • Surface lay-down areas • Cargo crane • Drainage, sewer, and signage improvements

16. Impact of High Priority Projects Over 5 Years • Business sales in region: $79.1 mm • Household Income: $24.1 mm • Jobs:

18. Impact of Medium Priority Projects By Year • Business sales in region: $4,862,269 • Household Income: $1,481,987 • Jobs: 38 • Over full 5-year period (years 6-10) • Business sales in region: $24.3 mm • Household Income: $7.4 mm

19. Impact of Low Priority Projects By Year • Business sales in region: $12,422,500 • Household Income: $3,786,295 • Jobs: 96 • Over full 10-year period (years 11-20) • Business sales in region: $124.2 mm • Household Income: $37.9 mm

20. Impact of Priority Projects on Local Sales Tax Collections • High Priority Projects: Years 1-5 • $583,219 • Medium Priority Projects: Years 6-10 • $179,320 • Low Priority Projects: Years 11-20 • $916,283 • Total over 20 years: • $1,678,823

21. Outlook: Shreveport/Bossier MSA

22. Background Assumptions & Issues The National Economy

25. The Recovery: Compare to Last Major Recession • Year/Quarter Year/Quarter • 82-IV: 0.3% 09-III: 1.7% • 83-I: 5.1% 09-IV: 3.8% • 83-II: 9.3% 10-I: 3.9% • 83-III: 8.1% 10-II: 3.8% • 83-IV: 8.5% 10-III: 2.5% • 84-I: 8.0% 10-IV: 2.3% • 84-II: 7.1% 11-I: 0.4% • 84-III 3.9% 11-II: 1.3% • 84-IV 3.3% 11-III: 2.5% • Lower Taxes Higher Taxes • De-regulation More Regulation

27. PERCENT MAKING CAPITAL OUTLAYS (PREVIOUS 6 MONTHS) (RECOVERY FROM NBER TROUGH) NOVEMBER SURVEY FIRST MONTH IN EACH QUARTER

28. INVENTORY INVESTMENT PLANS(NET PERCENT OF FIRMS PLANNING TO INCREASE STOCKS) (RECOVERY FROM NBER TROUGH) NOVEMBER

29. WEAK SALES # 1 PROBLEM (RECOVERY FROM NBER TROUGH) NOVEMBER

31. The Math to Get Full Employment • 6.3 mm measured unemployed • 1.8 mm added each year: pop. growth • 1.0 mm discouraged • About 9 mm jobs needed • Need 480,000 a month for FE by 2012 election (done 1X in last 4 years) • 250,000 a month---FE in 2018!

32. Job Killers: • Higher taxes • Pro-union • Anti-Free trade • Extreme pro-green • More regulation • Government-run health care

33. Thoughts on a “Balanced” Approach(I.E, Raising Taxes) • Raising taxes in a weak economy? • Who to tax? 51% pay no taxes (Tax Foundation) • Be careful about thinking higher taxes will reduce the deficit

36. RGDP Forecasts(10/11) QuarterWells F.Consensus11-IV 1.2% 1.6% 12-I 1.2% 1.8% 12-II 1.6% 2.1% 12-III 1.8% 2.4% 12-IV 1.8% 2.5% 13-I 1.6% 2.8% 13-II 1.7% 2.9%

37. How bad is the economy? • Jury duty is now considered a good paying job. • A truckload of Americans was caught sneaking into Mexico. • When Bill and Hillary travel together they now have to share a room. • I bought a toaster oven and my free gift with the purchase was a bank. • Even I got suicidal

38. Two “squirrelly” issues BP Claims & Change in data collections

39. BP Claims Payments Under Feinberg: LA(As of August 2011) • Total Claimants: 184,011 • Total Paid out: $1,556,861,435 • Individual: $727.3 mm • Business: $825.3 mm

40. Top 7 Parishes in Claims Paid(90%)

41. The change in employment data collection We do not know how fast or slow we are growing

42. Switch from LWC to BLS in Dallas in March • Impact on statewide growth rates • February growth rate: 1.2% • March growth rate: 0.5% • August growth rate: 1.6%

43. Impacts across the state: August

44. Things are not always as they seem Financial advice for men

46. Natural Gas Market VERY different from oil market

49. Natural Gas The Demand Side: Not Major Factor