Tobacco Documents Online

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TABLE OF CONTENTS Page Introduction~................................................ ......... 1 Summary of New York State Results....«...................,..2 Summary of New York County Resullts .... ................. ....8 Methodology. ...............................................14, County Data Tables. TABLES 1. The Tobacco Industry's Economic Contribution to New York.....................................................5 2. New York Counties withithe Largest Percentages of the State's Total Employment in Each Core 3. New York Counties with the Largest Percentages of the State's Total Direct and Total Direct and Indirect Employment ................................9 4. New York,COuntiles with the Highest Tobacco: Core Sector Employment as a Percentage of:Total County Employment, by'Sector ................... 5. New York Counties~with the Highest Total Direct and Total Direct and Indirect,Tobacco Employment as alPercentage of Total County Employ,ment...... ......11 6: The Tobacco Industry"s Direct, Indirect, and Total' Economic Contributions to the Counties of New,York.... ................. .............................. ..1,2 7. The Tobacco Industry's Economic Contriibutions to the 62'Counties of New York,............,.......NY-1 ff. FIGURES' L. Tobacco Industry Core Sector Activity in the Counties of New York.................................... .....3 0

IN~TRODUCTI~oNi The research documented in this report was.undertaken to determine the economic contributions made by the United States tobacco industry to the state and counties of New York in 197'S'. This research was conducted for the law firm of'Covington & Burl'ing by the,Wharton Applied Research, Center (ARC) in colliaboration withlWharton Econometric Fore- casting Associates (EFA), Inc. Covington & BurLing represents The Tobacco Institute, a trade organization of'the U.S. tobacco industry. For the purposes of this study, contributions are defined as the economic effects that are generated'fromiexpenditures on goods and' services attributable to the farming, manufacturing, distribution, or sale of tobacco or tobacco-reliated products. This report presents the direct and indirect contributilonsi of'the tobacco industry to the state and counties of New Y'ork., Direct economic!contributions are economic effects that can be traced,directly to the farming, production,, distribution,, or marketing activities of the tobacco industry. Indirect economic contributions are those attributable to the multiplier, or ripple, effects of'direct economic contri- butions throughout the remainder of the economy.

SUMSM'ARY : OF NEW YORK STATE RESULTS i'n 1979 the U.S, tobacco i'ndustry contributed econom- ically to New, York through three of the industry''s "core sec- tors": tobacco manufacturing, intermediate diistribution. ('wholesaling and manufacturing sales activities), and' retail- ing/vending, as well as throughisuppl'iers''or support indus- tries" production of'containers, plastic film, advertising, and mediia and' promotion. .11 . The tobacco industry"s contribution to the New York economy results largely,from its considerable distri'bution sector. activities and support industry presence. As measuredlby employment in these sectors, New York ranked first nationally in intermediate, and second' in retailing/vending di'stribu~ tion of tobacco products,, with 7.4 and M6 percent of total national employment in these two sectors, respectively., (As measured',by dollar sales volume, New York, ranked second nationall'y'in both of these sectors in 1979.)' In add'ition, support, or supplier, industries of'the tobacco indlustry played a significant role in New York:; nearly 16 percent of the total national employment in alil cigarette manufacturers" support activities was contained' in New York. This was the largest share,of any state in 1!9'79. The indirect contributions of the industry to New York were the second' largest of •any state, with 8'.4 percent of indirect employment concentrated in the state. Figure l' illustrates the distribution of tobacco industry core sector activities among the counties of' New York, in 1'9'79s Letter codes identify the presence of each activity in each county. "M" indicates manufacturing and' "W" whole- saling. Retaili'ng,and vendiing were found in each county of the state, and hence are not included in Figure 1'. -2-

Figure 1 TOBACCO INDUS'PRY CORE SECTOR ACTIVITY IN THE COUNTIES OF NEW YORK 1979 If EY M Manufacturing W Wholesaling IOvcS9c0

® in parentheses beneath FTE2 employment., ber of persons employed in the manufacturiingisector is shown Table 1 summarizes the direct and' indirect contributi~ons of the tobacco industry to New York. Section I of the table presents the direct contribution attributable to each core sector (coTumn), i.e., manufacturing, intermediate distributioni,, retailing/vending, andlsupport (supplier) industries. Direct contributions are measured by each of the indicators examined (rows), i.e., number of establishments, number of employees, personal compensati!on~, and sales.1 The actual num- Section II presents the contributi'ons fromithese core economic sectors and their supporting i~ndustries to state and' federal' tax: collections. Section III summarizes the overall economic contributions of the tobacco industry to New York, i.e., direct, indirect, andltotai contributions, as measured by number of employees andlpersonall compensation. State aggregates of employment and compensation are aliso presented.3' Absolute numbers are followed by, alfigure reflecting the percentage of the state total represented'by the tobacco contribution. Employment, compensation, and tax total's reported'for state personal income taxes, as well'' as for federal FICA and' personall income taxes, are greater than the sumlof the figures reported for each county. This is because the state 1 2 3 Sales are not reportediat the state level for support ind'ustries.. Nationally, however, the manufacturing sector purchasedlS2.2 billion inigoods and services. Full-time-equivalent jobs calculated relative to the national average work weeks in each,core,sector., Employment in each state includes agricultural services, fisheries and forestry workers, construction, finance, insurance and real estate, manufacturing, mining, self- employed, service, transportation and other publiic utilities, andiwholesale and' retail trade. Employment excludes railroad, armed'forces, and' government activ- ities. These data have been normalized to full-time equival~enciesr for each sector. -4-

TABLE 1. THE TOBACCO INDUSTRY'S ECONOMIC CONTRIBUTION TO NEW YORK I. DIRECT CONTRIBUTIONS II -1- INTE-RMEDIATE I RETAILING/ SUPPORT I IIMANUFACTURING I DISTRIBUTION ~ VENDING I INDUSTRIES ~ -- II I I I I I NUMBER OF I ESTABLISHMENTS 11 31 2301 28,2601 31 I-_-- --- II I __ I I I I-FTE-EMPLOYEES 11 4401 -4,1301 17,6801 4.7801 I(EMPLOYEES) 11 (440)1 1 I 1 I II I I __ I I II I I - I I I PERSONAL I COMPENSATION $ II 10,809,0001 58,033,0001 141,560,0001 96,638,0001 1 II 1 1 1 1 I SALES $ 11 ---1-r.-179,500,0001 1,883,500,0001 ---I I- 11 I -_ I - I I II. DIRECT CONTRIBUTIONS TG: I STATE TAXES I I FEDERAL TAXE S I I EXCISE $ 327,947,000-1 1 EXCISE $ 207,869,000 1 i ~ 1 - - - 1 I I i 1 SALES $ 38,090,000 1 1--K'A $ 37,487,000 1 I --- 1 1 1 1 PERSONAL INCOME $ 9,479,000 1 I PERSiiNA-G IN CGME $ 36,722,000 1 I - - -- - I I 1 I CORPORATE INCOME $ 14,657,000 ~ I CORPORATE INCOME -$`- ----86,399,000 I $ 390,173,000 ~ I TOTAL $ 368,477,00-U--1 I ~ ~ I TOTAL CONTRIBUTIONS III. _ ~I STATE TOTAL r ~DTAG ~ TOTAL TOTAL DIRECT I ~I (AL L INDUSTRIES) I DIRECT - - - I INDIRECT I AND INDIRECT I --- --------------------------- ---- ------------ I NUMBER OF FTE II 6,414,200 I 27,030 I 132,200 I 159,230 I I EMPLOYEES ~I I 0.4 2.1 o(ol 2.5 -/°1 I II I I I I I PERSONAL II $-l-a4,944,957,000 I_ $ 307,040,000 $ 2,097,514,000 I$ 2,404;554.000-I I COMPENSATION II I 0.3 o/ol 2.0 0/01 2.3 ./.I SUPPORT INDUSTRIES: CONTAINERS. FILty, ADVERTISING. MEDIA AND PROMOTION THE TOTAL DIRECT CONTRIBUTION TO LOCAL TAX REVENUE IS $117,893,000. ® (.ov[.S9Etl

totalis include support industry contributions, whereas county totals do not (see Table 7). In generall, the sum of the county or congressional district tables may not equal each other or the state totals presented in Table 1 due to rounding differences., In total, the core sectors employed 22,250 FTE persons in New York ih 1979. Approximately 2 percent of these em- ployees worked in the manufacturing sector, 119 percent in intermediate distribution, and 79 percent in retaili'ng;/ vending. An add'itionaL 4',780 persons were employed in svpportt industries. The total of 2'7,030 jobs represented 0.4!percent of the aggregate employment iin New York in 1979. These 22,250 core sector employees earned $210.4 mil- lion inipersonaL compensation in 1979, representing 0.2 percent of the compensation earnediby all workers in the state. Two-thirds of this compensation was attributable to employment in the retailling/vending sector. Intermediate distribution employees received 28 percent of this amount, and 5 percent was earnediinithe manufacturing sector. Sup- port industriies~generated an additional $96.6 million in compensation. In 1979 retaiD sales,of finisheditobacco products totaled'' almost $1.9 billion in New York, or 8'.S percent of national industry retail sales. The direct contribution of the tobacco i~ndustry to local' tax revenues totaled' $117.9 million, consisting of'locali excise and salles taxes on tobacco products. The direct contribution of the tobacco industry to state tax revenues totaled'.$'390.2'million„ of which,$327.9 million, were collected as excise taxes on tobacco products, $38.1 million as sales taxes on tobacco products, $9'.5 million ass personaL income taxes ($6.5 million originating in core sec- tors and $3.0 million in support industries), and $1i4.7'million -6-

as corporate income taxes., The sum of these collections rep- resented 3.3 percent of'total state tax collectiioms,in New. York in,1979. , The direct contribut.ion to federal taxes collected from the,state totaled' $368.5 million, of whichl$207.9' million represented'exciise tax collections on tobacco products, $37.5 million FICA payments ($25.6 million attributable to core sectors and' $11.8 millionito support industries), $36.7 million personali income tax payments ($25.2 million attribut- able to core sectors and $11.6 mi11!ionito support industries), andl $'8'6.4 mi~Tlion federal corporate income taxes. Indirect employment contributions of the tobacco industry through multiplier, or ripple, effiectsito nontobacco sectors oflthe New York economy totaled 132,200 persons, who earned $2.1 billion iin compensation. The tobacco industry's total direct and indirect contributions to the state were 159y23'0~ employees and $2.4 billiion in personal compensation. -7-

SUMMARY OF NEW YORK' CO[dNTY' RESULTS Though tobacco manufacturers' activity i'n NewYork was most heavily concentrated around the metropolitan New York City area, intermediate and retailing/vending distribution weree distributed widely throughout the state. Table 2 shows the counties with the highest percentages,of totall employment in the distribution sectors. The county name is followed by its percentage of total state employment in the relevant sector. Table 2' NEW1YORK'COUNTIES W'ITH'THE LARGEST PERCENTAGES OF THEISTATE''S TOTAL EMPLOYMENT IN EACH CORE SECTOR 11979 Intermed'iate Retaili~ng/ Distribution Vending Rank County & County 8 I Queens 2'0.8' New York 112.4 2 Kings 10.2 Kings 10.7 3 Westchester 9.0 Nassau 10.4 4' Suffolk 8.4 Queens 6.9 5' Nassau 8.0 Suffolk 6.9 6I Erie 6.7' Westchester 6.5 7' New York 5.5 Bronx 567 8' Bronx 5.0 Erie 565 9 Onondaga 3.11 Monroe 3. 2 10, Monroe 1.0 Onondaga 2.5 Sub-Totall 79.7 70.7 All Others 20.3 ' 29. 3 TOTAL 100.0% , 100. 0% -8-