RELIABLE DATA LACKING TO ASSESS VALUE OF COASTAL ECONOMIES

Published March 5, 2000

The coastal economy is vital to the national interest, an engine driving the greatest expansion in U.S. history, accounting for upward of one-third of the gross domestic product.

For years, lobbyists, developers and resort officials have made such claims to buttress their case for billions in federal and state subsidies.

One problem: Even those who make them acknowledge that such assertions are imprecise at best and probably misleading.

"We simply don't have any hard data on the coastal economy," said Charles A. Bookman, a government consultant who helped gather some of the numbers. "Anyone with half a brain can say the coast is a big generator, but what we lack is any kind of analysis. "

Most of these claims are based on a sweeping government definition of the coastal economy that stretches from the ocean all the way inland to some of the nation's largest cities.

Under the definition, Philadelphia is a beach town. So, too, the nation's capital. Throw in Wall Street. The Sears Tower. Fanueil Hall in Boston. All part of the coastal economic engine. Or so the government would have you believe.

The definition dates to 1972, when Congress passed new coastal legislation. The law failed to include precise coastal boundaries. That was left to regulators, and they chose a broad definition based on environmental concerns, not economic reasoning.

"We had to make something up," said a Commerce Department official who was involved in the process. "Calling Philadelphia a coastal community may stretch it a bit. "

There is, in fact, a coastal economy. It is largely a real estate and tourism market, with most of the high-wage jobs centered in construction and finance. But the majority of the jobs are in the low-wage service sector, Census and IRS data show.

Resort officials contend that tourism dollars are a valuable source of revenue for state and federal coffers. But to date, no one has weighed those gains against the generous tax breaks and other subsidies that have encouraged and sustained coastal building.

Development policies are being made in a factual vacuum, acknowledges Howard Marlowe, the nation's premier lobbyist for beach resorts. "We've got lots of anecdotal information, but there's not enough of a national picture. "

One who has tried is James R. Houston of the U.S. Army Corps of Engineers, which is in the business of building back storm-damaged beaches.

Houston wrote a widely quoted paper for the engineering magazine Shore and Beach in 1995. It has since become a coastal manifesto.

"Few in America realize that beaches are a key driver of America's economy," Houston wrote. He added that beach tourism contributed $170 billion annually to the economy.

Houston is a physicist by training and one of the nation's leading coastal engineers. But by his own admission he is no John Maynard Keynes.

"Everything I have is circumstantial," he said. Economic analysis, he added, is something he pursues "on nights and weekends. But I think the case is pretty strong. "

Among Houston's sources: the World Almanac, USA Today, National Geographic, the Wall Street Journal.

"Some of Jim's stuff is not reliable," Marlowe said.

Nevertheless, Houston's numbers continue to be widely circulated, even by Congress members and regulators.

The year-round populations of many beach towns are declining, not growing, signaling the towns' seasonal nature. Communities such as Stone Harbor and Beach Haven are gaining buildings, not people. Census data show that nearly two of every three shore towns in New Jersey lost population in the last two decades, even though the coastal counties in which they are located were among the fastest-growing areas in the state.

Still, shore officials say tourism is a vital source of jobs. That may be true, but most of the jobs appear to be low-paying - retail clerks, waiters, housekeepers, bartenders.

In 1998, Laurence M. Downes, chairman of the Jersey Shore Partnership, a lobbying group, said tourism accounted for 623,000 jobs statewide with a $13 billion payroll. That works out to an average annual salary of $21,000 - well below the statewide average of $37,500 - and many of the jobs are seasonal.

Nationally, coastal tourism jobs pay a fraction of what other workers earn, an analysis of IRS salary data for 1997 shows. That year, tourism salaries in 16 coastal states ranged from $12,052 in Alabama to $21,874 in New York. The average U.S. salary for all jobs was $30,336.

On his Web site, Marlowe regularly advertises for economic studies to buttress the case for shore-protection money.

"We're operating on faith," he said, "and we're using the numbers we have to bolster the faith that we have."