ML20031A994
| ML20031A994 | |
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| Site: | Crane, 05000471  |
| Issue date: | 12/14/1979 |
| From: | PENNSYLVANIA, COMMONWEALTH OF |
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THREE MILE ISLAND SOCIO-ECONOMIC IMPACT STUDY e
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THREE MILE ISLAND SOCIO-ECONOMIC IMPACT STUDY COMMONWEALTH OF PENNSYLVANIA Prepared By:
Governor's Office of Policy and Planning 504 Finance Building Harrisburg, Pennsylvania 17120 Walter H.
Plosila, Director in cooperation with:
The Department of Agriculture The Department of Community Affairs The Department of Commerce The Department of Insurance
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The Department of Labor & Industry The Department of Revenue December 14, 1979 l
l The preparation of this report is being financed through a jointly funded grant from the federal government.
Federal agencies contributing to this project include, the Economic Development Administration in the Department of Commerce, j
the Department of Housing and Urban Development, the Com-munity Services Administration, and the Department of Energy.
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CONTENTS Page I.
Summary.
1 II.
Background.
7 III.
Immediate and Short Term Impacts.
11 Account of the Accident 12 Manufactaring.
13 Nonmanufacturing.
28 Tourism.
53 Housing and Property Values.
60 Construction.
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Agriculture.
73 State and Local Government 83 IV.
Long Range Impacts.
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SUMMARY
The nuclear power plant accident at Three Mile Island in the early spring of 1979 had an immeciate and significant economic impact on the seven county area surrounding the plant site.
While the economy of the region returned to near normal levels shortly after the crisis period anded, the potential for continued econcmic costs remains.
The Three Mile Island accident was an unprecedented occurrence and clearly the worst operating incident in the more than 20 year history of non-military nuclear power use.
It dire:tly affected the lives of almost 150,000 people who felt compelled to evacuate their homes, fleeing from a potential threat which was invisible, odorless and soundless.
Southcentral Pennsylvania was the focus of worldwide attention !ct days as the routine business of life was interrupted.
While the accident began in the early morning hours of Wednesday, March 28, public perception and reaction remained relatively low until two days later - March 30, when radiation releases from the plant heightened public awareness of the situation. Just past noon on Friday, March 30, the Governor of Pennsylvania, Dick Thornburgh, issued an advisory recom-mendation for pregnant women and pre-school children living within a five mile radius of the plant sice to evacuate for reasons of their personal health and safety.
The Governor's a6viscry triggered a gradual exodus. A study conducted by the Nuclear Regulatory Commission found that an estimated 144,000 persons evacuated from a 15 mile radius, rapresenting 39% of the total population. In the S-10 mile radius, 44 percents and in the 10-15 mile radius, 32 percent.
The estimated cost of the evacuation has been
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placed at $9.8 nd111on, but does not include lost income or wages for the evacuating population.
The economic impacts of the Three Mile Island fall into two distinct categories the i'med2 ete and short term impacts which are precipitated for the most part by the evacuation and which abated in the weeks and months following the end of the crisis period, and the continued potential for longer term economic costs to the public and the region which is 1
served by TMI operating utilities. Each are discussed in summary form below.
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J For both the manufacturing and nonmanufacturing firms, it is still unclear how much of the losses experienced were absolute, as opposed to how muc-were recaptured by increased production, greater sales, overtime, etc., in the weeks and months following the crisis period. It is apparent that some, but certainly not all of these losses were natigated in this nenner.
By late May,1979, there were several indications that the manufacturing sector had recovered from the immediate e!!eces of the accident. By then, no plant had any employees out of work due to THI, there was little oz no :rduction in average weekly working hours and only about 10 p~rcent of the establishments reported factory orders were below normal or felt there was so w type of " image effect" in their p.roduct.
While there may have been some small lingering e!!ects of TMZ (i.e., " product image" may have caused some factory crders tc be below normal) it.s more than likely that other economic factors were creating sluggish economic conditions impeding a return to normal business levels in the TMI area.
Similarly, the nonmanufacturing sector bad mostly recovered from the immediate effects of TMI by the end of May.
While data indicates that about one in four of the ncomnufacturing entities had business levels below normal during September, this probably reflects a slowly decaying economic condition over the summer months resulting from worsening national economic conditions. If the manufacturing study had bean carried out in September, a similar condition in that sector would have probably been indicated.
The lack of significant growth in manufacturinZ caployment in the TKI area since June would tend to support this conclusion.
Agriculture - Farming is a major influence and contributor to the economic well-being of the seven county region which surrounds the TMI plant si te.
At the time of the accident, there was widespread public concern over the safety of agricultural products produced in the area. Extensive testing !qr radiation levels revealed only minute' and short lived levels of radiation present which were well below allowable state and federal etaniards. Since the accident, no adverse radiation effects cn foodstu!!s, livestock or plant health have been discovered.
The farm community suffered financial losses which have been estimated, by the Pennsylvenia Department of Agriculture, to range from S250,000 to
$500,000.
Overall, the impact was not pervasive as over 96 percent of farmers contacted in a 25 mile radius of the plant said they suffered no losses at all.
government - Government agencies at bcth the state and local levels were pressed to cope with the demands created by the THI accidsat.
For the most part, these demands were manifested in increased personnel costs and additional expenses necassary to meet the special requirements during the crisis period.
3.
LONG RAN1E IMPACTS A primary long range impact of the TMZ accident is the potential for continued higher electricity costs for Pennsylvania ratepayers served by Metropolitan Edison and its corporate sister, Pennsylvania Electric.
With both TMI nuc* ear units in an outage status, Metropolitan Edison power generating capacity has been reduced by 38 percent, and Penn-sylvenia Electric's by 13 percent.
To compensate for this dc!icit, the two utilities have been purchasing power from other interconnected gen =rators at an estimated cost of $22 nillion per month, Or S264 adllion per year.
The Federal Department of Energy has estimated that the average..monuhly cost for a residential customer has increased at least $7:50 due tc this situation. The increased electricity prices can also have a sign: cacant impact on commerce and industry. Approximately, cae-third of all uanufacturing dnd nonmanufacturing firms Contacted said th0ir expansion or new investment plans could be a!!ected by a ten percent increase in electricity costs.
An increase of 25 percent or greater according to these firms could care dramat-cally alter expansion / investment plans.
Twice as many nonmanu-~
facturing firms as manufacturing firms indicated that their expansion plans would be affected by a 25% or greater rate increase.
Continued increased electricity rates could also place the ifetropolitan l
Edison-Pennsylvania Electric service areas, which encompasses a wide geographic portion of Pennsylvania at a competitive disadvantage fcr location of new firms.
On a general level without considering electricity prices, an estimated two-thirds of all manufacturing and over three-quarters of all nonmanu-
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facturing firms would make new investments regardless of their experiences with the THI accident.
This villingness to expand and make new invest-ments in southcentral Pennsylvania, (assuming no major increases in electricity prices) is a strong indicator of optinisism and confidence in the region.
As a result cf the TMI accident, a number of insurance claims and legal actions have been generated.
To date, only relocation and wage loss claims amounting to 1.3 nillion for those persons falling within the criteria of the Governor's advisory have been settled. A number of claims and law suits, including class actions have been filed ?y govern-ment agencies and business concerns which su!!ered losses during the crisis period. Given the status of federal court dockets, the unique nature of the accident and the substantial and unprecedented amount of financial damage alleged, it is anticipated that it will take yeaTs to ultimately resolve these claims.
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b THREE MILE ISLAND SOCIO-ECONOMIC I}iPACT STUDY e
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l BACKGROUND P
Study Dasign An unprecedented occurrence, the worst operating accident in the history of non-military nuclear power, developed at the Three Mile Island (TMI) nuclear plant on March 28, 1979.
The resulting crisit was a focus of world wide attention for days.
The accident directly affected the lives af almost 250,000 persons who temporarily evacuated the araa sur-rounding TMI, and for some resulted in altered lifestyles and perceptions.
Real and imagined threats to public health and safety, created by the accident, impacted social and economic systems in southcentral Pennsylvania.
The purpose of this study is to:
(1) provide a record I
through research and cataloging of this unique incident's social and economic impact on southcentral Pennsylvania and (2) develop from the record a strategy for mitigation of confirmed adverse findings.
A consortium of Commonwecith agencies, and the special Pennsylvania Commission to Study and Evaluate tr Conse-quences of TMI, appointed by Governor Dick Thornburgh, and chaired by Lieutenant Governor, William W. Scranton, III, have joined together in conducting the study.
Coordination of the study is being managed by the Governor's Office of Policy and Planning.
Other consortium agencies include:
the Department of Agriculture, the Department of Commerce, the Department of Community Affairs, the Department of Insurance, the Department of Labor and Industry, and the Department of Revenue.
A final consolidated report will be published in June of 1980.
The undertaking of this study is just one component of the Comnionwealth's overall response to the Three Mile Island incident.
Separate and extensive projects to study health, mental health, emergency preparedness and environ-mental questions raised in the wake of TMI are being addressed by other state agencies.
Nature of the Impact Area - The Three Mile Island nuclear power plant sits in the middle of the Susquehanna River about ten miles mouth of Harrisburg, the State capitol.
The surrounding countryside contains the Commonwealth's mest productive farmland, several small and medium sized cities, a prosperous industrial structure, a strong governmental presence (emanating from Harrisburg, the State capitol and U.S.
Department of Defense facilities nearby) and a relatively
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well diversified economic base.
Agribusiness, benefiting from the area's excellent soils, is a major contributor to the area's economic well-being.
Other assets include excel-lent transportation facilities, as evidenced in the location of many warehousing and transpcrt-dependent enterprises and a proud historic past which precedes the American Revolution.
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I Table 1 Population Estimates for the TMI Impact Area Estimated Population 0-5 Mile Radius 37,842"/
5-10 Mile Radius 127,272b/
10-15 Mile Radius 204,375b/
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15-20 Mile Radius 312,911 0-20 Mile Radius 682,400 i
"! ased on Pennsylvania Health Department Census.
B b/ stimated from the U.S.
Nuclear Regulatory Commission E
Teicphone Survey.
c/ cr;ved from the U.S. Bureau of the Ce:psus unpublis.'.ed D
data for minor civil divisions in Pennsylvania.
Data for 1976 indicates that all of the seven impacted counties had unemployment rates bclow'the state average of 7.9 percent, with Lancaster County exhibiting the lowest unemployment rate of 5.1 percent.
Except for the Harrisburg Standard Metropolitan Statistical Area (SMSA), total un-employment rates in general were higher among females, nonwhite, black and minority groups.
Even among these, the rates were below the state average, except for Adams County.
(See table 2).
In reviewing occupation employment patterns, Harrisburg with its state government employment, has a higher white collar employment rate than the State average.
Blue collar rates in Lebanon, Lancaster, and York Counties, by comparison, exceed the Pennsylvania rate.
The figures for Lancaster County reflect the significance of the agricultural sector of the economy; service employment in Lebanon County is above the State average and well above the remaining counties in the TMI impact area.
(See table 2 ).
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IMMEDIATE AND SHORT TERM IMPACTS 9
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ACCOUNT OF THE ACCIDENT In the early morning hours of Wednocday, March 28, 1979, Three Mile Island's numbar two nuclear reactor cuffcrsd th2 failure of several water pumps.
This seemingly minor event triggered the subsequent accident which " escalated into the worst crisis experienced by the nation's nuclear power industry".1/ yetIn the days that followed the situation was compounded by" equipment failures, inappropriate pro-cedures and human errors and ignorance" (ibid) and culminated l
just past noon on March 30, 1979, when the Governor of Pennsylvania issued an advisory for pregnant women and pre-school children living within a five mile radius of the i
plant to evacuete.
1 Evacuation - Preliminary results of a public opinion survey of 1,500 households found that the Governor's advisory resulted in the evacuation of an estimated 144,000 perpons from a 15 mile radius of the Three Mile Island Plant.2 This accounts for about 39 percent of the total estimated population living within a 15 mile radius of the plant.
It is also estimated that 60 percent of the population within a 5 mile radius of the plant evacuated.
In a 5-10 mile radius, 56,000 persons or 44 percent evacuated.
In a 10-15 mile radius which contains most of the greater Harrisburg area, 67,000 persons or 32 percent evacuated.
The majority of those who evacuated did so on March 30, the day of the Covernor's advisory.
The NRC study found, cur-prisingly, that a significant portion of the evacuating population left prior to March 30:
17 percent in the 5-10 mile ring and 14 percent in the 10-15 mile ring.
The medium date the evccuees returned was, April 4, 1979, indicating an average evacuation period of five days.
While the great majority of those evacuated remained in Pennsylvania (72 percent) 21 states in all received evacuees, including those as far away as Florida, California and Oklahoma.
The total estimated economic cost of the evacuation has been placed at $9.8 million.
This cost 6oes 'not include lost income for those who evacuated or for those who remained but were unable to work for one reason or another.
The average evacuation expense was $68 per person.
Of this totsi, by mid November 1979, almost $1.3 million had been paid to r
3,158 claimants who fell within the criteria of the Governor's advisory, by the operating utility's insurance company.
This amounts to an average of $384 per person indicating that these evacuees stayed away for a longer period than other segments of the evacuating population.
1/ Report of the President's Commission on the Accident at Three Mile Island, October 1979, Washington, DC.
2/Three Mile Island Telephone Survey, Freliminary Report on Procedures and Findings, Nuclear Regulatory Commission, October, 197f.
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Table 4 Manufacturing Employment in the 20 Mile TMI Area 1/, '
Industry Respondents Universe All Manufacturing Industries 71,269 101,749
. Durable Goods 42,502 58,377 Lumber & wood products 628 1,528 Furniture & fixtures
-1,727 2,4]4 Stone, clay, glass & concrete prod.
2,697 4,013 Primary metals 6,095 7,536 Fabricated metals 6,245 10,007 Machinery, except electrical 12,277 14,750 Electrical & electronic products 4,753 8,372 Transportation equipment 6,144 7,415 Instruments & related products 1,256 1,329 Misc. manufacturing industries 680 1,013 Nondurable Goods 28,767 43,372 Food & kindred products 6,823 12,467 Tobacco manufacturers 334 497 Textile mill products 5,940 6,360 Apparel & related products 3,686 6,967 Paper & allied products 3,085 4,046 Printing, publishing & allied indus.
3,910 5,797 Chemicals & allied products 574 795 Petroleum refining & related indus.
249 301 Rubber & misc. plastics products 1,700 2,218 Leather & leather products 2,466 3,924 The area includes all of Dauphin, Cumberland, and York Counties and those parts of Adams, Lancaster, Lebanon and Perry Counties within a 20 mile radius.
Source:
Pennsylvania Department of Commerce, Bureau of Statistics, Research and Planning: 1977 Census of Manq-facturing.'
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normal production by April 4, 3979, and the remaining firms returned to normal production soon thereafter.
Therefore, the immediate effects on employment, wages, and production were short lived and were mostly concentrated during the first week.
However, other impacts may have longer term aspects, these are discussed in this section '2nder the heading "short term impacts" and in subsequent sections dealing with long range impacts.
TMI related losses to manufacturing establishments during the first week are presented in Table 6.
It ic interesting that the greatest percentage of losses took place in large establishments - those employing 100 or more workers,even though they represent only 18 percent of the total number of establishments. They also account for 79 percent of the total employment.
Table 6 Losses in First Week by Number of Establishments by Size Average per Under Over Total 1/
employee 2/
100 Employees 100 Employees _
Man Hours Lost 187,973 1.8 46,951 141,022 Wages Lost S1,515,509
$14.89 S506,702 51,008,807 Value of Pro-duction Lost S*,672,820 S75.41
$845,915 56,827,005 Number of Establishnen ts 1,141 935 206 1/ Includes totals for all manufacturing establishments including food and kindred products (SIC 20).
2/ Total days lost, wages or value of production in universe divided by total 1977 employment.
Source: Pennsylvania Department of Commerce, Bureau of Statistics, Research and Planning.
l Losses in man hours, wages, and value of production which j '
occurred during the first week following TMI in the food l
and kindred product establishments are shown in Table 7.
On an average per employee basis, these establishments lost l
less than the average experienced for all other manufacturing groups.
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Losses in Value of Production - The overall average loss in value of production for all manufacturing establishments was S75 per employee.
But those large non-food firms (500 to 999 employees) mentioned previously, which experienced the greatest average time and wages lost per employee also had the greatest loss in value of production - an average of almost $350 per employee.
The average loss in value of production for all establishments having more than 100 employees was SS5 per employee.
Contrasting 1y, all of the food and kindred products establishments sustained an aver-age value of lost production of only $12 per employee.
However, small food manufacturing establishments in the employee range of 20 to 94 did 'ose an average of $43 per employee.
Supply and Marketing Disruptions - During the time period immediately following the TM1 incident, there was some dis-ruption in supply of raw materials and other products nee-essary to carry out the manufacturing process.
Disruptions in the marketing of finished eroducts or coods to consumers or 3
users also occurred.
However, tnese disrdptions were not a widespread or a pervading problem.
The Department of Commerce's study found that almost seven percent of the total manufacturing firms experienced dis-ruptions in supply of products purchased and almost 12 per-cent experienced disruptions in marketing of products sold.
(see Table 8)
These disruptions mainly affected small 3
establishments probably because they tend to both obtain materials and market their products locally.
Of the firms affected by disruptions in supply of materials, 88 percent had less than 100 employees.
These sma.11er firms probably would feel the inconvenience of supply disruptions more than the larger firms since they are less able to maintain a large inventory of needed materials.
Within this size group of less than 100 employees, nearly one-half of those operated by the self employed experienced disruptions in their supplies of products purchased.
Eighty-nine percent of the firms experiencing disruptions in marketing also had less than 100 employees.
Such firms probably were affected by having capital tied up in un-delivered products.
Disruptions in marketing were felt more by food and kindred product establishments than the average for all the other SIC categories.
(See table 8)
Food and kindred product establishments experienced twice as many marketing dis-ruptions as they did disruptions in obtaining supplies.
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There were several reasons for these marketing and supply disruptions.
Because of the voluntary evacuation there was i
less capability of providing timely delivery of materials for processing or the shipping of finished products.
In addition there would have been a reduced market for manu-factured products since some outlets closed temporarily (e.g.
stores and restaurants).
People in the area became more selective in their purchases; this selectivity particularly affected the food processing establishments.
Disruption in supply and marketing during the first week was more of a problem for the food establishments than it was for the average of all the non-food processing categories.
The disruption in marketing of food products was experienced by twice as many establishments as those experiencing disruption in obtaining supplies of products.
It is likely that the marketing problem resulted from immediate consumer resistance at the time of the accident to locally produced agricultural products and to temporary losses of sales because of a decreased demand resulting from people having evacuated the area.
Several dairies in the Harrisburg area reported a short lived decrease in sales.
The fact that numerous restaurants and schools in the area were c1cced for several days would also account for some decrease in consumer demand.
Aside from consumer resistance to food products, the supply of certain raw materiais sensitive to potential radiation could also have been subject to resistance by manufacturers.
The Teamsters strike which began during the immediate period following the TMI incident, also impacted a few manu-facturing firms.
The degree to which the study's findings are influenced by the strike cannot be determined.
In summary, supply and marketing dislocation effects on industry at the time of the TMI incident were minimal, affecting about 10 percent of the manufacturing establishments.
Some firms experienced dislocations in supply and delivery at the time of the event due to evacuation of the area and some consumer resistance over safety concerns.
Because of TMI's special potential for causing adverse effects on the food processing industry, the Commerce Department study also assessed the impacts on ten la"~~
food processors located just outside the 20 mile rt as mentioned ear 3ier.
During the height of the incl ue.
these firms had no problems relating to man hours lost or value of production lost.
Eat there was some consumer resistance experienced by a few of the dairies resulting from consumer concern over the safety of milk obtained from the TMI area.
In some cases, the milk from within the 20 mile radius was kept separate so that customers could buy milk from outside the area if they so chose.
In other cases, local milk was processed into cheese or dried milk.
- Overall, however, the study found that, as of the end of May, no serious problems were being experienced.
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Most of.the claim activity shown in Table 9 occurrsd in the month of April, 1979, with the exception of the con-struction industry:
About 75% of the initial claims (about 540) were made in the first week, and the bulk of these were partial claims which represent only a few lost days of work.
Since only 482 of the initial claims were in the manufacturing sector, and since the total 1977 manufacturing employment in an approximate 20 mile radius (Table 4) is about 100,000 employees, the share of manufacturing employees filing initial claims is well below one percent of the total manufacturing employment.
The construction claims as noted earlier do not encompass the general construction field such as home building, but rather reflect claimants engaged at TMI in specialized maintenance.
Table 9 n
Unemployment Claims Related to THI,-
as of October 13, 1979 Industry Initial Continued Apparel 13 13 Printing & Publishing 4
4 Fabricated Metals 1
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Machinery (except electrical) 1 1
i Transportation Equipment 27 27 Misc. Manufacturing 436 411 e-Total Manufacturing 482 457 Agriculture Services 2
7 Construction 152 942 Transportation &-Public Utilities 3
10 Services 82 73 Total Nonmanufacturing.
239 1,032 TOTAL 721 1,489 Source:
Department of Labor and Industry, Office,of Employment Security.
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TABLE 10 TOTAL EMPLOYMENT County
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"# ~^ 9 Mar-Sept March May June July August Sept.
Change Change Change Change Change Dauphin 105,800 106,900
+1,100 107,700
+1,900 110,500
+4,700 109,300
+3,500 107,800
+2,000 Perry 15,900 16,000
+
100 16,100
+
200 16,600
+
700 16,400
+
500 16,200
+
300 Cumberland 81,400 82,200
+
800 82,800
+1,400 85,000
+3,600 84,100
+2,700 82,900
+1.500 Lebanon 46,200 46,700
+
500 47,300
+1,100 48,200
+2,000 47,200
+1,000 46,600 4
400 Lancaster 165,300 167,100
+1,800 168,300
+3,000 170,900
+5,600 169,600
+4,300 167,400
+2,100
+
York 131,100 131,900
+
800 132,200
+1,100 133,800
+2,700 132,800
+1,700 133,100 42,000 Adams 28,500 28,700
+
200 28,700
+
200 29,100
+
600 28,900
+
400 28,900
+
400 TOTAL 574,200 579,500
+5,300 583.100
+7,900 594,100
+19,900 588,300 l+14,100 582,900
+8,700 TOTAL UNEMPLOYMENT Mar-May Mar-Jun
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"" ^^ 9 County March May June July August Sept.
Mar-Sept Change Change Change Change Change Dauphin 6,600 4,600
-2,000 6,200
-400 5,200
-1,400 6,000
-600 6,100
-500 Perry 1,100 700 400 1,100 0.
900 200 1,000
-100 1,000
-100 Cumberland 4,400 2,800 4 1,600 4,600
+200 3,500 900 4,300
-300 3,700
-700 Lebanon 2,600 2,000 600
- 3,000
+400 3,500
+
900 3,000
+400 3,000
+400 Lancaster 8,600 6,400
-2,200 8,900
+300 7,200
-1,400 8,300
-300 8,400
-200 York 6,700 5,500
-1,200 7,300 4600 7,600
+
900 6,800
+100 6,400
-300 Adcms 2,200 1,500 700 2,400
+200 2,500
+
300 2,000
-200 1,600
-600 TOTAL 32,200 23,500
-8,700 33,500
+1,300 30,400
-1,800 31,200
-1,000 30,200
-2,000 TOTAL RATE OF UNEMPLOYMENT
}" Change
"'~""Y Mar-Jun
"#I~^"9 Mar-Sept County March May June July August Sept.
Change Change Change Change Dauphin 5.9 4.2
-1.7 5.5
-0.4 4.5
-1.4 5.2
-0.7 5.4
-0.5 Perry 6.5 4.4
-2.1 6.6
+0.1 5.0
-1.5 5.8
-0.7 5.7
-0.8 i
Cumberland 5.1 3.3
-1.8 5.3
+0.2 4.0
-1.1 4.6
-0.5 4.3
-0.8 l
Lebanon 5.4 4.1
-1.3 5.9
+0.5 6.7
+1.3 6.0
+0.6 6.,0
+0.6 l
Lancaster 4.9 3.7
-1.2 5.0
+0.1 4.1
-0.8 4.6
-0.3 4.8
-0.1 l
York 4.9 4.0
-0.9 5.2
+0.3 5.4
+0.5 4.9
. 0 4.6
-0.3 Adams 7.1 4.9
-2.2 7.8
+0.7 7.8
+0.7 6.4
-0.7 5.4
-1.7
- Preliminary w
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4 NONMANUFACTURING Summary of Findings Immediate TMI Impacts - First Week Following Accident Man Hours lost were estimated to be just over one million representing an average loss of 4.0 hours0 days <br />0 hours <br />0 weeks <br />0 months <br /> per employee.
- Service, retail trade, and construction sectors experienced tne greatest losses, and among these more average per employee losses were reported by smaller employers (less than 20 employees) than by larger ones.
Lost Wages are estimated at $5.5 million, an average of S21 per employee.
Smaller firms sustained the greatest average loss, S33 per employee; smaller employers in most sectors averaged more wages lost per employee than larger businesses.
Of the larger employers, (20 employees and up) only those in the construction industry lost more wages per employee than their smaller counterparts.
Employees out of work or absent from work either by their own choice or because their place of empicyment was clsoed, totaled approximately 42,700 or 16 percent of the total number of employees in the six county area surroudning TMI.
Smaller employers (less than 20 employees) indicated an average 25% out of work / absent compared to a 12% average for larger employers.
Services, transportation and utilities, construction, and retail trade reported a greater percentage out of work / absent than other sectors.
Supply and marketing disruptions were experienced by only a small portion of the businesser.
Five percent of the busi-nesses reported supply disruptions and 12 percent marketing disruptions.
The larger businesses had the greatest share of both supply and marketing disruptions.
Retail trade, wholesale trade, and the service sectors accounted for 92%
of those reporting supply dislocations and fer over 98% of those in product marketing.
Value of business or sales losses in the sir, county area around TMI were estimated to be just over $74 million.
This represents an average loss per establishment of around S3,700.
Without exception, the greatest losses were experienced by the larger firms, while the total losses and losses per employee were greatest for the smaller firms.
Over 85 percent
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of the lost business occurred in the retail trade, wholesale trade and the finance, insurance and real estate sectors.
Overall conclusion - In the immediate period, smaller firms generally experienced a greater loss of man hours, wages, and employees out of work than did larger firms.
The greatest losses in all categories were reported by the retail trade and service businesses.
Larger employers in most sectors had supply and marketing disruptions than smaller employers.
Larger firms also lost the greatest total value of business.
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i NONMANUFACTURING Study Design A study of TMI impacts on the nonmanufacturing sector was undertaken in September, 1979, by Pen.7tylvania Department of Commerce's Bureau of Statistics, Research and Plannicg.
Data concerning the impacts of the TMI incident was obtaincd for firms within a six county area surrounding the TMI plant - these counties include Dauphin, Cumberland, Lancaster, Lebanon, Perry and York.
The reason for the use of the six county area was the need to utilize information provided-by the Office of Employment Security, in the Pennsylvania Capartment of Labor and Industry.
This data did not permit tne locating of individual establishments at the municipality level as could be done it. the manufacturing sector.
It should also be pointed out that the two studies'were con-ducted four months apart.
As a result, the information
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about the impacts may be influenced in some cases by economic factors other than TMI which have emerged during the summer months.
The universe of entities and employment in the six county area in December, 1978 was 20,197 entities employing 267,032 persons.
An entity is the total county business operations 7
1 of a company operating in a ecunty regardless of the number of establishments.
The 267,032 universe of employment represents the employment in all establishments in all of I
the 20,197 entities.
In addition, the entities and employ-
{
ment were disaggregated into eight two-digit nonmanufacturing sectors based upon the Standard Industrial Classification Code.
Table 11 identifies the eight nonmanufacturing sectors and shows how the entities are distributed among four employment size groups.
The most significant fact is that 87.5 percent of the entities are smal', 17,663 out of 20,197 entities employ less than 20 workers. The only exception is the mining sector which has a greater percentage of entities employing over 20 workers.
In assigning entities into nonmanufacturing sectors, each was identified according to the major activity which it performs.
The universe does not include firms representing self-employed individuals.
Furthermore, the 314 entities included under the agriculture sector represent only large farms (ie., those employing 10 or more workers in a 20-week period or paying in cash at least $20,000 to employees in any one quarter) as well as those engaged in' forestry, fishing, or agricultural services.
28.
The small firms 0-19 (nearly 88 percent of the total) employ only 29 percent of the total workers.
See Table 12.
An examination of the distribution of the entities and their associated employment among the eight nonmanufacturing sectors reveals that services and retail trade account for 63 per-cent of all firms and 61.8 percent of the totd1 employment in nonmanufacturing.
Services is the leading secter in the number el firms, while retail trade leads in the size of
- ~
employment.
The Department of Commerce's study of TMI impacts on nonmanu-facturing included contacting a total of 377 entities (employing 82,019 workers) out of the total universe.
The Department contacted 100 percent of the entities employing 250 or more workers, 25 percent of those in the 100-249 employee range, 10 percent of those employing 20-99, and one percent of those with 0-19 employees.
The 577 entities contacted represent about three percent of the universe of entities and approximately 31 percent of the employment universe (see Table 13).
The Department received data on the impacts of TMI on business operations from 401 firms.
This represents a very good response (about 70 per-cent) and, accounts for two percent cf all' entities in the universe.
And the employment associated with the responses was nearly 50,000 employces - about 19 percent of the employ-ment in the universe.
When comparing the manufacturing and nonmanufacturing data collection efforts, there were roughly the same number of responses - 363 responding establishments in the case of the manufacturing sector and 401 entities in nonmanufacturing.
l This relative uniformity of responses was obtained, even though the percentage of the universe represented by the responses was much smaller in the case of nonmanufacturing (two percent of the entities) as compared with manufacturing (32 percent of the establishments).
For employment, the nonmanufacturing responses represented about 19 percent of the total possible employment of the universe, and in manu-facturing the responses represented 70 percent of the possille universe etcployment..
t '
l 30.
m
Tcb12 13 Nonmenufacturing Study TMI Impact Area Entities Employment I af
.1 verse
% of Universe Size Group Universe Contactt caucacted Responses Responding 0-19 17,663 181 1.0 123 0.7 20-99 2,140 218 10.2 160 7.5 100-249 291 75 25.8 34 18.6 250 +
103 103 100.0 6JL 62.1 TOTAL 20,197 577 2.9 401 2.0 Employment 0-19 78,657 736 0.9 609 0.8 20-99 83,882 8,430 10.1 6,189 7.4 100-249 42,907 11,267 26.3 7,758 18.1 250 +
61.586 61.586 100.0 35,406 57.5 TOTAL 267,032 82,019 30.7 4'9,962 18.7 Source: Pennsylvania Department of Commerce, Bureau of Statistics, Research and Pla:,ning.
4 1
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32.
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- =
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In order to present the estimated economic impact data for all s
nonmanufacturing entities and all employm:nt-in tha six county area, the Department inflated the data obtained from the responses.
This extrapolation was done for each of the four employment size groups within each of the sectors and by each of eight nonmanufacturing sectors.
In this way, a total sectorial response and a total for each employment size group for all settors could be obtained.
Generally, the extrapolation of the respondent's data to the nonmanufacturing universe was o?.tained by using either 1) the ratio of total universe employment in each cize group and sector to the employment in the corresponding ;espondent size group and sector or 2) the ratio for the number of entities in the same way.
Appendix A which identifies the two-digit breakdown of the component segnents of the sectors according to the Standard Industrial Classification is included at the end of this section.
Immediate Impacts The period for'which immediate impacts of TM1 were sought by the Department of Commerce was the period extending from March 30 through April 6, 1979.
This includes the time during which the-Governor-issued his advisories with respect to voluntary evacuation and other matters related to the f
incident, such as.the closing of schools within the five mile radius.
It extends almost to the time when the advisories were lifted on April 9, 1979.
The bumediate impacts are i
therefore generally synonyaous with the height of the accident during the first week.
Employment Effects - The immediate impacts of the TMI incident can be seen,by examining the estimated amount of man hours lost by the various eight sectors in nonmanufacturing and associated wage losses.
Man hours lost during the March 30 to April 6, 1979 period are shown in Table 15 on the following page.
There were a total of 1,064,841 estimated man hours lost by all nonmanufacturing entitier; this represents an average loss of 4.0 hours0 days <br />0 hours <br />0 weeks <br />0 months <br /> per employee.
However, there was a distinct difference in the amount of losses depending upon the size of the entity - for example, small entities with less than 20 employees lost an average of 6.6 hours6.944444e-5 days <br />0.00167 hours <br />9.920635e-6 weeks <br />2.283e-6 months <br /> per employee while entities employing more than 20 persons lost an average of only 2.9 man hours.
It appears that the small firms bore the greater share of the man hour losses, with some sectors feeling more pronounced losses per employee than the small firm average, such as transportation and public utilities,.and services.
This tendency toward small firms having the larger man hour losses could be linked to the occurrence of decisions to let persons off work being made by local management, while the larger firms decisions may have had to be made at more distant locatic: 2 34.
l
(
D 4
Tcble 16 Wages Los; First Week By Entities By Entities Average with less Average with more Average per than 20 per than 20 per Sector Total Employee / Employees Employee / Employees Employee /
1 1
1 Agriculture, etc.
9,644 3.3 3,761 3.3 5,883 3.3 Mining 0
0 0
0 0
0 Construction 1,031,581 43.3 525,393 45.4 506,188 41.4 Trans. 6 gyblic 661,827 24.7 347,425 103.0 314,402 13.4 Utilities /
Wholesale Irade 232,630 9.1 95,795 12.3 136,835 7.8 Retail Trade 1,943,310 21.2 702,302 26.5 1,241,308 19.C Finance, etc.
243,811 11.3 117,090 24.7 126,721-7.5 Services 1,351,525 18.5 762,216 32.6 589.309 11.8 TOTAL
$5,474,528 20.5 2,553,982 32.9 2,920,346 15.5 1/Total wages lost in universe divided by December 1978 employment.
'/ oes not include data for Metropolitan Edison which is a unique D
case.
Source: Pennsylvania Department of Commerce, Bureau of Statistics, Research and Planning.
Work Lost - Another way of examing the imme<*iate employment effects of the incident is to look at the tata concerning the number of employees out of work at some tirae during the March 30 to April 6, 1979 (first week) period.
Table 17 which follows shows that the overall nonmanufacturing sector experienced an estimated 42,700 persons out of work due to TMI during l
l the first week.
This represented 16 percent of the total l
number of employees in the six county area.
The data indicates that smaller entities had one-quarter of their employees out l
for at least some period of time.
It is striking that over 90 percent of all the employees in the transportation and public utilities sector were out of work in the smaller firms having less than 20 employees.
l l
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36.
l
Supply and Marketing Disruptions - During tha TMI incidsnt, there was some cisruption of noEmanufactucing entities' supply and marketing channels for prcducts purchased or products sold.
The Department of Commerce's study of the impacts of TMI found that, at the ti.me of the accident, five percent of the nonmanufacturing entities had disruptions in supply of products purchased and about 12 percent had disruptions in channels for products sold.
This is remarkably close to the disruption patterns experi-enced in the manufacturing sector.
In both manufacturing and nonmanufacturing only a relatively small share of the total establishments / entities were disrupted, and the dis-ruption in marketing was the more pronounced.
In fact, the share of the establishments experiencing marketing dis-ruptions was nearly identical in both cases.
Table 18 displays the distribution of dislocations mmong the smaller and larger firms according to the eight nonmanu-facturing sectors.
It is significant that contrary to the situation which occurred in manufacturing, it was the larger nonmanufacturing entities which experienced the greatest share of the disruptions, both in supply and in marketing.
~
Because of the dominance of smaller firms in nonmanufacturing, it is net surprising that most of the actual number of disruptions occurred among these firms.
However, when the entities are classified as either smaller or larger,-then it can be seen that the share of the entities disrupted is r
greater among larger firms.
The basic causes for disruption at the time of the accident for nonmanufacturing were probably the same as those causing disruption in manufacturing - ie., during the crisis period thousands of persons evacuated the area, some retail. stores (including food outlets) and service establishments closed
'or a period of time.
Simultaneously, a Teamsters strike occurred.
For instance, the data collected by Commerce in May, 1979 concerning TMI impacts on 16 selected warehousing and distributi on firms (part of the transportation and public utilities sector) revea3ed that about one-third of the establishments experienced some form of disraption l
attributable to TMI in either supply or delivery of pro-l ducts - and, for some of these firms, the truckers strike l
was even more disruptive than TMI.
t l
Retail trade, wholesale trade, and services entities account for 92 percent of those experiencing dislocations in supply and over 98 percent of the marketing distributions.
This indicates that the disruptions are linked to the decline in l
the number of consumers (resulting from the voluntary evacuation l
or consumer resistance among those who remained) as well as transportation interruptions in the flow of commodities purchased or sold, or-services rendered.
l l
38.
l l
l
-v-
Value of Business Lost - The estimatsd total value of busi-ness or sales losses during the immediate period of the TMI incident was just over S74 million for the entire nonmanu-facturing activity in the six county area.
The average loss per entity was $3,673.
(This average value represents the losses sustained in each sector where there were reported losses by size group of entities.)
The value of business lost during the first week is shown in Table 19 which follows on the next page.
Overall, the largest business losses were experienced by the retail trade, wholesale trade, and the finance, insurance and real estate sectors.
Over 85 percent of the lost business-occurred in these three sectors, and retail trade alone accounted for 53 percent of the total loss.
Average loss per entity was highest for finance, insurance, and real estate, followed (in order) by wholesale trade and retail trade.
The largest losses were found in entities having more than 20 employees (i.e.,
the larger firms).
This should not be surprising, since the larger firms do the greatest volume of business, even though they comprise the minority of the number of total firms.
The average value of lost business in the larger firns was nine times that of the smaller firms, while total employment in these firms was only 2.4 times that of the smaller ones.
Wholesale and retail trade had remarkably similar losses per entity regardless of size of firm, even though the total losses in wholesale trade were one-third that of retail trade Short Term Inpacts The Pennsylvanis Commerce Department's nonmanufacturing l
study also evaluated the TMI impacts after the first week crisis period ended.
The Department of Commerce found that of the 401 entities heard from, 199 (nearly 50 percent) expressed the opinion that their business had been interrupted due to TMI and that their business activity was not at normal levels du*ing the time of the crisis.
And, by April 9, 1979 - when the Governor's advisories were rescinded - 86 entities (about 43 percent) were still not back to normal 1 :siness activity.
By contrast, l
the manufacturing study showed that most manufacturing plants had returned to normal production by April 4tn, and the remaining soon thereafter.
By the end of April, however, the majority of nonmanufacturing firms had returned to normal business levels and by the end of May, only 19 out of the 199 which had indicated interruptions had not returned to normal business activity.
6 l
40.
1
It in difficult to isolate TMI impacto from all othar economic factors which mey hcVe bean ths ccuca of this finding.
Maybe there were some problems still associated with TMI, but there were many other cogent-factors also at work.
April began a quarter of general decline and a sluggish economy.
In such a cli. ate, both nonmanuf acturing and manufacturing _ activities can be expected to experience problems.
Business Levels - The data gathering effort conducted by the Commerce Department in September, 1979, concerning the nonmanufacturing firms did not produce data documenting man hours lost, wages lost, or value of business lost due to TMI for the time beyond the immediate impact period of the incident.
Rather, it showed that such dollar losses "since then" were either none or were not known.
At the time of the September study, nearly 23 percent (4,560) of the total entities in the universe had business levels below normal, while 72 percent considered their business levels to be normal.
Of the total entities which believed that their business levels were below normal, more than one half (52 percent) were in the retail trade sector and about 28 percent were engaged in providing services.
So a total of 80 percent of the entities having business below normal by September were in these two sectors.
See Table 20.
Viewed from the aspect of the incividual sectors, however, over 38 percent of all antities in the retail trade secuor felt their business :n >e below norma.1 and an estimated 26 percent of the wholesale trade entitles and nearly 24 percent of the transportation and public utilities entities believed their business was below normal levels.
t Table 20 f
Nonmanufacturing Sectors with Below Normal Business l
September, 1979 Number of
% of all Sector Entities Entities Agriculture, etc.
0 0
Mining 0
0 Construction 58 1.8 Transportation & Public Utilities 199 23.8 Wholesale Trade 421 26.2 Retail Trade 2,367 3c.4 Finance, etc.
240 16.0 Services 1,275 19.4 TOTAL 4,560 22.6 Source:
Pennsylvania Department of Commerce, Bureau of Statistics, Research and Planning 42.
l l
When comparing the opinions concerning tha savarity of th2
" image problem" between manufacturing end nonmanufacturing firms, there would appear to be a lessening of concern about image occurring in the basiness community over time.
For example, in May, 1979, tae manufacturing firms analyzed by 4
the Commerce Department indicated that only about 10 percent of the total (112 out of 1,141 firms)
>elieved that their product had an " image problem" due to the accident.
While it is recognized that manufacturing is different from non-manufacturing, nevertheless business leadership attitudes concerning the incident would probably be similar.
- Thus, since less tnan five pm,rcent of the nonmanufacturing fires reported image problems in September, this probably reflects an improvement ov2r uhe perceived condition in May.
Employment Changes - An examination of comparative employ-ment trends from the time of the accident through September was undertaken to determine TMI's significance.
This study compares employment trends in the Harrisburg, York, Lancaster and Lebanon labor market areas (a seven county area rurrounding the plant) by six sectors of nonmanufacturing (including government) in order to determine whether the trends in 1979 were similar to those in 1978.
The purpose was to weigh the 1979 trends against the sectorial changes as they occurred in 1978, and to relate the results of the Department of Commerce's study showing the aforementioned short term f
effects to employment trends which have occurred since March.
Table 21 shows employment changes by nonmanufacturing sector for the period March through September for both 1979 and 1978.
It should be noted that the March 1979 total nonmanu-facturing employment was 369,000, roughly 14,000 jobs higher than the previous March of 1978.
Between March and September, 1979, nonmanufacturing employment grew by about 4,000 jobs (or just about one percent) compared to a growth of 20,000 jobs (roughly six percent) in 1978 over the same period.
What this shows is that the nonmanufacturing economy from March through September in 1979, has not had as significant growth as in 1978.
More importantly, the wholesale and retail trade sectors, which felt much of the brunt of TMI in the immediate period of the accident, have shown no overall growth in employment.
Table 21 reveals that between March and June of 1979, total nonmanufacturing' employment
{
grew by 8,000 jobs, with wholesale and retail trade accounting for almost 2,000 of these jcbs.
What happened then is that from June onward, a gradual decline in nonmanufacturing employment-set in cancelling out over one-half of the employ-ment gained.
Wholesale and retail trade lost all of the employment increases which were gained between March and 4
June.
So irrespective of TMI, there were employment gains in all sectors of nonmanufacturing except government in the three months immediately following the accident.
44.
1
,-,. - - - -,. -- -.,--,-.. - -. -.. - ~ -. _.
Table 22 shows percent changes in employment in nonmanu-facturing month by month since March for 1979 and 1978.
It shows that during April, (first month after the accident) employment was nearly one percent higher than that in March - and wholesale and retail trade were doing even better ( a gain of 1.5 parcend.
These ghins in nonmanu-facturing employment during tne month of April and throu' out the period up through June would indicate tnat TMI had no significant adverse affects on nonmanufacturing employment.
The above statement recognizes that 1979 was not as good a year as 1978, but this is probably not a result of TMI, but rather due to adverse economic factors at work throughout
~
the nation and the State.
These include inflation, rising l
l interest rates, the dampening effects of OPEC price increases and the lessening of available capital for investment.
1978 was a relative " banner year" when compared to 1979, at least in total employment gains.
After June, the cumulative effects of the slowly worsening economy began to " settle in" so that there have been few nonmanufacturing sectors gaining any significant employment.
Except for construction and other nonmanufacturing (which includes services), all other sectors exnibited stagnation or losses.
Even though total nonmanufacturing employment levels were substantially higher in March of this year when compared with March of last year, by June and September total employment had fallen below the totals for the same months of 1978.
l Finally, when comparing the seven county TMI area with the Commonwealth and the nation, (see Table 23), it becomes evident that Pennsylvania and the TMI aren have not been doing as well as the nation as a whole.
The March to June period in 1978 showed Pennsylvania and the TMI regior. to be ahead of the nation, but during the period June to September 1976, the State and the region began to fall behind the growth in nonmanufacturing experienced in the nation as a l
whole.
For the same six-month period in 1979, the State and the TMI region have remained below the national nonmanufacturing rate of employment growth gains.
However, it is very important to note that the seven county TMI area has been doing better than the State as a whole since June (i.e.,
its declines have not been as great).
46.
Table 23 l'onmanufceturing Employmint Trand Comparitona U.S., Pa. and Seven County TMI Area March-June 1: arch-June June-Sept.
June-Sept.
% change
% change
% change
% change Area 1978 1979 1978 1979 U.S.
3.8 2.9
+0.5
+0 7 Pa.
4.6 2.3
-1.3
-1.6 7 county TMI area 6.9 2.2
-1.2
-1.1 Source: Pennsylvania Department of Labor and Industry, Office of Employment Security.
This story of declining employment trends in nonmanufact-uring in all likelihood explains why some nonmanufacturing entities were finding themselves "below normal since TMI" (23 percent of the entitier), or felt they were experiencing
" image problems" (five percent of the entities), or had "below average weexly working hours" (nine percent of the entities) by September, 1979 - six months after the TMI accident.
It should be pointed out that most nonmanufacturing firms were at " normal levels" by September.
Given the state of the national economy, it is a credit to the stability of the region's economy, that the TMI region is doing as well as it is.
Some firms in September were even at "above normal" business levels (six percent of the entities), and some were having above normal weekly working hours (3 percent of the entities).
Small Business Effects On April 18, 1979, Governor Dick Thornburgh requested the small Business Administration to declare an economic disaster area in southcentral pennsylvania counties affected by the Three Mile Island incident.
His request was made in order to entitle area merchants, farmers and businessmen sbo sustained economic losses as a result of the incident to receive SBA loans at significantly reduced rates, as well as certain forms of economic and technical assistance.
Governor Thornburgh noted that economic hardships had been brought about by the incident and the precautionary measures it necessitated - including the limited evacuation of preg-nant women and young children and the placen.ent of Civil Defense forces on alert status.
As a result, he recognized that normal business activity had been disrupted and firms had experienced millions of dollars in losses.
He believed that these businesses qualified for the economic injury assistance which SBA can provide.
48.
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-m_m_
_m____
a
- Nonmanufacturing Unemplovment Compensation Claims - The
~
description of the unemployment claims filed as a result of TMI has been well covered in the section on manufacturing.
The information indicated that 239 of the total initial claima (one-third of the total) occurred in nonmanufacturing
' sectors.
Of the continued claims - 1,032 or almost 70 percent of the total also are in nonmanufacturing.
The majority of the nonmanufacturing claims are in the con-struction sector.
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Division G.
Retail Trade 52 Building Material 3, Hardware, Garden Supply, and Mobile Home Dealers 53 General Merchandise Stores 54 Food Stores 55 Automotive Dealers and Gasoline Service Stations 56 Apparel and Accessory Stores 57 Furniture, Home Furnishings, and Equipment Stores 58 Eating and Drinking Places 59 Miscellaneous Retail Disivior H.
Financc, Insurance, and Real Estate 60 Banking 61 Credit Agencies Other Than Banks 62 Security and Commodity Brokers, Dealers, Exchanges and Servicer 63 Insurance 64 Insurance Aaents, Brokers, and Service 65 Real Estate 66 Combinations of Real Estate, Insurance, Loans, Law Offices 67 Holding and Other Investment Offices Division I.
Services 70 Hotels, Rooming Houses, Camps, and Other Lodging Places 72 Personal Services 73 Business Services 75 Automotive Repair, Services, and Garages 76 Miscellaneous Repair Services 78 Motion Pictures 79 Amusement and Recreation Services, Except Motion Pictures 80 Health Services 81 Legal Services 82 Educational Services j
83 Social Services 84 Maseums, Art Galleries, Botanical and Zoological Gardens 85 Membership Organizations 88 Private Households 89 Miscellaneous Services s
Source:
Standard Industrial Classification Manual, Executive Office of the President, Office of Management and Budget, Statistical Ptlicy Division, 1972 52.
Overall, motel / hotel occuprney rates dipped drcstically be-cause a number of conferences and conventions scheduled for the month of April were cancelled.
While hotel / motel reservations suffered because of the decline in convention and conference business, there were some lodging accommo-dations which profited, with April business being above normal.
They were those which hosted the hundreds of
~
reporters, engineers, medical personnel and others who were responding to the accident.
Based upon the S2.0 million in lost sales revenues experienced by the ten major lodging and convention sites, the Depart-ment extrapolated the data to reflect the estimated sales los'ses in the six county area around TMI.
The estimated immediate short term loss is on the order of S5 million.
This calculation utilized an average sales loss of $762 associated with each employee in the sample and the 1976 employment in all 244 lodging and convention establishments in the six county area (6,240) around TMI.
The estimated S5 million in immediate short term losses does not represent the 'otal which was sustained by the tourism community.
The figure would certainly be higher if additional establishments such as independent restaurants, service stations, and entertainment sites were to be considered.
Nor does it include wage losses of employees in the tourism.
industry -- some tourist businesses made cutbacks in employ-ment in order to offset their losses of income.
Short-Term Impacts In early November, the Department of Commerce conducted a follow-up survey of the same areas.
Results from the second survey indicate continued losses, with most businesses attributing the decline to spring and summer gasoline shortages.
Harrisburg experienced the greatest loss.
Bus tour bookings for 1980 were ahead of last year in the Lancaster area, but were below normal in Harrisburg.
TMI was not considered a significant factor for declining business in Gettysburg.
Lancaster - Lancaster area business losses attributed to TMI lasted approximately three to four weeks.
As the tourist season progressed, other factors including a small outbreak of polio among the Amish and the gasoline crunch contributed to the decline.
Area businesses ranked TMI third among the three factors considered responsible for the decrease.
At the time of the survey, however, bus tour bookings for 1980 were well ahead of last year.
54.
/
Those questioned were household heads who intended to travel by car or bus during the succeeding six months, and who would bring along one or more pre-teen children on the trip.
The study found that 9F percent of all the respondents were aware of the TMI incident, therefore, their decision to travel to Pennsylvania could have been heavily influen,ced by the TMI event.
Impacts on Travel Plans - The study found that two percent of all households queried would avoid traveling to Pennsyl-vania by car or bus because of concerns relating to TMI, nuclear power, nuclear plants, radiation, and fallout.
The seven selected traval destinations are listed below, along with the percentage of households which indicated they would avoid these areas.
Gettysburg Less than 3%
Harrisburg 6%
Hershey 1%
Lancaster/ Dutch Country 1%
Poconos Less than 14 Philadelphia Less than 1%
Pittsburgh Less than 1%
It is obvious that Harrisburg and its association with nearby TMI was the only selected area where a notable share of the respondents did not want to visit.
But of equal interest is the fact that only approximately one percent of the family travelers would avoid the other six selected areas -- hence the share which would have avoided these destinations was less than the share which indicated they would avoid traveling to the state as a whole.
Because of the national news coverage, the TMI incident re-ceived, it is remarkable that such a small percentage of the family travelers' plans were found to be negatively affected.
Nevertheless, during the summer the experience of the tourist industry led it to believe that TMI did have a continuing impact on tourism, even though it is felt that other factors have played a more dominant role in creating the general tourism malaise.
For example, findings in mid-August indicate that tourism in Lancaster County was off 50 percent l
this year accident.1joff$150million), partly because of the nuclear 1/ estimony of James R.
Bartlett, Executive Director of T
l the Pennsylvania Dutch Visitors Bureau, before the House Select Committee Investigating Three Mile Island, August 22, 1979.
56.
Table 24 Visitor Center Activities Cumberland and York Centers Rest of State Number of Visitors Number of Visitors Numbers of Visitors Number of Visitors 1978 - 1979 1979 - 1980 1978 - 1979 1979 - 1980 Year Month Season Season Change Season Season Change-I 1978 April 8,689 8,175
- 5.9 26,496 24,804
- 6.4 May 8,897 6,783
-23.8 32,157 25,872
-19.5 June 11,301 7,611
-32.7 46,937 34,193
-27.2 miy 15,750 9,171
-41.8 68,103 40,113
-41.1 August 15,065 11,060
-26.6 63,157 48,542
-23.1 September 8,597 7,518
-12.5 42,421 33,453
-21.1 1
October 9,046 36,411 November 6,029 22,873 December 4,0L9 16,543
~
1979 January 2,856 1.1,095 February 3,201
- 1,684 March 6,827 19,155 1
tit 4
NONMANUFACTURING IMPACTS ON HOUSING AND PROPERTY VALUES Findings The Three Mile Island accident had a noticeable effect on the real estate market within a five mile radius surrounding the plant in the months immediately following the accident.
This effect diminishes with distance from the plant site, and the latest available data indicates that the impact may be dissipating.
According to a study done of the Pennsylvania Department of Community Affairs, the major impacts of TMI are a decreased i
number of homes sold, and a longer selling period for homes on the market within the Sive mile radius.
Data for these two factors, when compared to data for the corresponding months in 1978, reveals substantial differences.
These impacts may be short term, since housing market data for the third quarter of 1979, appears to be more encouraging.
An added indicator of the impact of TMI is that the effect statistically diminishes outside of the 5 mile radius.
Although hour
.g sale price seems somewhat depressed, this does not in itself comprise as substantial an impact as the number of houses sold and days on the market.
Here again, the five mile radius exhibits the deepest deflation, yet appears to recover in August.
Realtors noted a few incidences of loss of sales due to TMI, but no panic selling.
Property values were also influenced by other extenuating circumstances such as the relatively harsh winter-spring of 1978-79 and the uncertainty of mortgage funds.
It is impossible to i
precisely identify where one impact ends and another begins in analyzing a universe as variable as the real estate market.
The DCA analysis was done on the basis of 5 mile concentric circles from the TMI plant site.
By comparison, a second study done by the Pennsylvania Department of Revenue on an aggregated county by county basis, found no definitive effect of the TMI accident or property values.
This analysis is explained in greater detail in the Impacts on Government chapter.
, ~
Within the new construction mar.st, TMI and other constraints i
such as unavailable, or expensive mortgage money and high interest rates have had a depressing effect. Again, the l
greatest drop occurs in the 5 mile radius, decaying over distance from TMI, and recovering substantially by August.
j Builder expectations also reflects a residential buildi:.g i
downturn focusing on the 0-5 mile ring, because of TMI.
This may be a speculative appraisal, however.
Construction employment was lower in Harrisburg compared to other areas, but many extraneous variables make a direct corre'.ation with TMI difficult.
60.
1
a Tabic 25 Residen.tial Sales by Month Mt,Y JUNE JUI.Y 1978 1979 Change 1978 1979 Chan~e 1978 1979 Change 0-5 l'dle Radius f Sales 42 28
-33 63 41
- 35 49 12 - 75 Average value 32,599 34,154 4.8 35,526 34,694 - 2.3 ~ 34,532 35,587 3.1 5-10 Mile Radius f Sales 123
, 136 10.5 185 161 - 13 141 SS - 39 Average V:1ue 37,927 44,640 17.7 44,938 47,433 5.4 42,291 46,935 11.1 10-15 Mile Radius
- Snics 558 512
-S.2 679 614
-9.5 709 540 -23.8 Averenc V. lee 36,571 40,139 9.8 35,343 41,828 18.3 39,396 40,099 1.8 15-20 Mile Ra.d_i_us f Sale.<
249 210
-15.7 276 230
-16.7 235 ISS
-21.3 Avera,,e Vn3ne 34,450 44,857 30.2 36,482 41,328 13.3 34,957 40,645 16.3 Sourec: Sectc Tax Equalization Board; Assessor's Office, i
b +
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Pennsylvania houses is not as high as the base figure in 1978.
It was $42,227 or approximately $10,000 less.
For the quarter prior to the TMI accident, the increase of 1979 price over the 1978 price was only 0.8 percent.
For the quarter subsequent to the TMI accident, the increase was 9.7 percent.
The increase climbed to 12 percent in the third quarter of 1979.
Therefore, though not performing at the level of the regional norm, both the STEB data and the Central Penn Multi-List data show increases in housing value from the previous year, 1978, for the total area.
The 5 mile radius, though, shows ar actual drop da housing value in the June STEB data as can be seen in Table 25. The number of transactions in the 5 mile radius is relatively small, and a few low value transactions could have depressed the average value.
How.ver, the sluggish increases and some decrease are significant.
A guarded interpretation (due to tne small number of cases) is that the average value of residential real estate transactions in the 5 mile radius is less than might be expected subsequent to the TMI accident.
This conclusion is reinforced by the fact that the housing valu(s from 1978 to 1979 are less depressed with distance from TMI.
In the third quarter of 1979, the increase over one year previous within the 5 mile radius was 19 percent, indicative of a possible upturn.
Figuring 30-60 days between a sales contract and closing, the TMI related effects are calculated to occur beginning in May, and carry through thereafter.
As related above, there does appear to be negative effect in the 0-5 mile radius.
Values appear to be slightly depressed in the 5-10 mile radius and 10-15 mile radius in that June and July values
~
are less than 16 percent in Ring 2 and the July value is only 1.8 percent in Ring 3.
Ring 4 showed healthy increases of 13.3 percent and 16.3 percent in June and July.
Real Estate Buyer Resistance - Following residential home values change, a second indicator of real estate buyer resistance in the TMI. area is the number of days settled properties were on the market.
With regard to days on the market for the total area, the average number of days on the market in the quarter following the accident was 82.7 and for the quarter one year previo a the value was 81.6 (see previous summary table).
There is no significant difference.
The second quarter of 1979 shos.s a marked decrease in days on the market over the quarter previous.
The third quarter is likewise lower than the second.
There would appear to be no resistance to buying as indicated by this statistic when
~
considering the total area (20 mile radius from TMI).
62.
For the 5 mile radius arca, thure is on apprecicble dif-ference in days en the market in the second quarter of 1979 as compared to the same quarter of 1978.
Submitting the data to a "t"
test, the difference is significant at the.10 level of significance.
Thus, the data indicate some pos-sibility of buyer resistance in the 5 mile radius area but the evidence is not overwhelming.
Time on the market decreased in the third quarter which suggests than any effect was short-lived.
The Real Estate Industry Perspective - The realtor perception of residential sales is another indicator of buyer reaction.
In July, the Department of Community Affairs queried 15 real estate agencies practicing in the area immediate to the plant (5 mile radius) about their experiences concerning the effects of the incident on the real estate market.
Of particular interest was information on sales resistance, the occurrences of buyers backing out of contracts made prior to TMI, and any changes in the value of properties since the incident.
The results of the study are shown on Table 28.
Table 28 Realtor Study Responses Potential Impacts Yes No Resisthnce to Sales 4
11 e
duyers Backing out of Contracts 3
12 Lower Property Values 1
14 Source:
Pennsylvania Department of Community Affairs As pertaining to sales resistance, only four realtorn felt that there was some resistance as measured by their volume of business.
Even for these, business had returned to normal by the month of May.
Two reported that there was slight resistance within sight of the cooling towers.
Buyers from out-of-town were more likely to be cautious about buying in the immediate area.
In general, by the time of the study, real estate market activity seemed tc be normal for that time of year.
Any sluggishness of the market was attributed more to high interest rates and tightness of mortgage money than to the TMI incident.
64.
NOMMANUFACTURING IMPACTS ON CONSTRUC'? ION INDUSTRY Constru-tion Employment To analyze the effects of the TMI nuclear accident on the construction industry, data on contract construction employ-ment were obtained from the Bureau of Employment Security of the Department of Labor and Industry.
These data were analyzed by staff of the Department of Community Affairs.
Data were obtained by month for 1978 and 1979 for the Harrisburg Labor Market Area (LMA) and those market areas of York, Lancaster and Lebanon.
In total these areas constitute the seven county area of:
Dauphin, Cumberland, PerrJ, York, Adams, Lebanon and Lancaster counties.
Data were also obtained for comparison purposes from the A.lentown-Bethlehem-Easton (ABE) area, an area outsidE the Three Mile Island area, and for che entire state of Pennsylvania.
Table 29 shows percentage change by month in 1979 over employment in the same month one year previous.
The Harrisburg LMA shows declines in employment for all of 1979, compared with 1978, and these declines are most marked beginning i.' April, the start of the spring construction season.
During this time, construction employment increased in actual numbers month by month, but the levels were not nearly what they had been one year prcvious.
The state as a whole began showing Jeclines also in April 1979, indicating something of a depression in the industry.
The total seven county area also showed declines beginning in April, 1979.
However, the declines in the Harrisburg LMA were most sig-nificant probably due to the end of Harristown construction described in more detail below.
The Allentown-Bethlehem-l Easton area also registered declines.
Noting the data for j
the state and ABE, not all of the decline in Harrisburg can l
be attributed to purely local reasons.
It is quite likely that construction employment in Harris-burg was higher than usual in 1978 because of the Harristown project.
That project was essentially completed by 1979.
l The.e was a significant increase in employment by May 1978 l
over March of that year - an increase of 2400 workers or l
about 50 percent.
Beginning from a slightly smaller base in l
March 1979 (200 fewer), there was a more modest increase by May of 300 or 10.6 percent.
For the state in the same period, the increase was 17.7 percent.
For the period March-August 1979, Harrisburg increased by 14.7 percent and the state increased by 23.3 percent.
Applying the state rate of increase to the Harrisburg area, the expected employment would be 9,248.
The actual value in August for Harrisburg was 8,600.
A difference of 648 might be attributed l
l 66.
l
Table 29 Contract Construction Employment: 1979 (Data in thousands)
JAN FEB MAR APR MAY JUNE JULY AUG Harrisburg SMSA 7.7 7.0 7.5 7.8 8.3 8.1 8.5 8.6 Lancaster SMSA 7.8 7.3 7.8 8.1 8.3 8.7 8.8 8.6 York SMSA 6.5 5.7 6.2 6.3 6.7 7.0 7.2 7.0 Lebanon Labor Market Area 1.2 1.2 1.4 1.4 1.4 1.5 1.5 1.5 Seven County Area 23.2 21.2 22.9 23.6 24.7 25.3 26.0 25.3 Allentown Bethlehem Easton SMSA 7.9 7.2 7.8 8.1 8.6 8.8 8.8 8.9 Pennsylvania 166.1 150.7 166.7 185.2 196.3 198.5 205.7 205.5 Percent Change in Contract Construction Er.gloyment From 1978 to 1979 Harrisburg SMSA
-4.9
-6.7
-2.6
-15.2
-17.8
-20.6
-18.3
-21.0 Seven County Area
+5.0
+1.9
+5.5
- 3.3
- 5.4
- 7.3
- 7.5
-12.2 Allentown Bethlehem Ea ton
-6.0
-8.9
-4.9
-11.0
- 6.5
-11.1
-13.7
-14.4 Pennsylvania
+4.2
-0.3
+4.1
- 2.6
- 1.3
- 6.3
- 6.1
- 6.9 Source: Bureau of Employment Security of the Department of Labor and Industry.
O 68.
in the 5 mile ring.
Thus, about 17 percent of the builders perceived an impact on construction activity from TMI within the 5 mile radius.
Approximately, 33 percent of the builders either gave economic reasons for not building within the 20 mile radius of TMI, inclusive of the 5 male ring, or while they would build, did not feel business wcaald be good.
These economic reasons center around unavailable or too expensive construction or mortgage money.
These findings suggest that even though the condition of the economy might depress building activity in the Three Mile Island area, the potential for a reduction in new construction investment due to TMI is present.
(See Table 31).
Table 31 Builder Expec'tations Accident Economic and No Related Economic Accident Reasons Reasons Reasons Reasons Combined Will not build in 20 mi. radius 4
4 Will not build in 0-10 ring but will bt.ild in 10-20 ring 3
2 Will not build in 0-5 ring but will build in 5-20 mile ring 4
2 2
Will build in 5 mile ring, but felt busi-niss mig;ht not be good 1
2 2
TOTAL
- 11 3
10 2
Source: Pennsylvania Department of Community Affairs
- Four builders will build within the 5 rile radius and see no problems.
4 70.
The level of iodine radiation is measured {g)picoeuries per liter.
A picocuric is one-trillionth (10-of a curie or a rem.
Pennsylvania's health standard for milk allows 1,000 picocaries per liter; the federal Food and Drug Administration's allowable level is 12,000 picoeuries per liter.
At such levels, regulatory actions would be needed to protect the public health and safety.
Such actions were not necessary due to the TMI accident.
Between Mar:h 29 and April 21, 1979, the Pennsylvania Depart-ment of Agriculture took 200 milk samples, all of which were tested for the presence of Iodine-131.
The highest reading found in any of these samples was 29 picoeuries per liter.
Continued testing of milk since May 4, 1979, has shown less than 10 picoeuries per liter for all sampling through vember 23, 1979.
This level is below the minimum detectable with the equipment being used.
Table 32 summarizes the results of the milk sampling through November 23, 1979.
While no significant radiation contamination has been discovered, sampling continues since radiation levels are normally disclosed in milk before it can be detected in other food-stuffs.
During the first three weeks in April, over 30 different food items were sampled within a 30 mile radius of TMI.
This sampling also included river water, well water and tap water.
No additional testing of these specific food items took place after April 24, 1979, since prior results did not merit further testing.
However, on June 6',
samples of fresh lettuce, radishes, rhubarb, spring onions and fresh straw-l berries grown within a seven mile radius of TMI were also tested and were found to be free of radioactive content.
No further monitoring of foodstuffs other than milk is planned.
Livestock Analysis for Radiation - A number of animal health i
studies have also been undertaken by the Department of Agri-l culture.
Data collected in May, 1979, from 100 livestock owners within a five mile radJus of the crippled nuclear i
plant studied the TMI effects cc a total of 8,200 dairy cows and heifers and 1,818 beef catt]i.
Of those surveyed, 95 percent reported no unusual hers health problems.
The remainder reported herd health problems that were classified as routine.
The Department feels that such problems would normally be expected to occur at the five percent rate in any other area of the Commonwealth.
72.
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Several owners of livestock residing within a few miles of TMI felt that their animal health problems resulted from the TMI incident.
In each case, the Department performed extensive sampling of the livestock feedstuffs for radio-activity, performed autopsies on dead animals when possible, and carried out other diagnostic tests for various diseases.
To date, none of these herd health problems have been found to be related to the incident.
Indeed, the Agriculture Department has extensively studied several animal and poultry health problems in the Three Mile Area.
All problams have been definitely diagnosed to be due to factors unrelated to the accident.
These investigations, also, will continue.
The Department has also investigated numerous inquiries con-cerning plant health and insect problems and their possible relationship to TMI.
To date, none has been established.
The Dapartment of Agriculture attributes the relatively cool summer and its accompanying high humidity and frequent showers to the higher incidence of plant diseases reported.
Consumer Resistance - There was a widespread public concern immediately following the incident about the safety of milk and fresh vegetables sold in the area.
For example, within the 20 mile radius, two of the nation's largest firms producing candy products stopped buying local milk during the month of April.
Such consumer and buyer resistance appeared immediately after the accident and was relatively short-lived.
During the first days of the accident, many food retailers in the TMI area felt it necessary to inform the public that their milk for sale came from farms in places outside of the TMI vicinity.
Outside of Pennsylvania, there were instances where retailers advertised that their milk did not come from this State.
Moreover, there was some resistance by out-of-state dairy plants to accept locally produced milk, and there were cases where they cancelled orders for Pennsylvania milk.
Milk dealers near TMI experienced declines in sales to varying degrees.
One large dairy serving the Harrisburg area found that sales dropped 18 percent during the first week following the incident and this was followed by a subsequent 15 percent decline during the second week.
The dairy felt it necessary to advertise in the local newspapers that they did not utilize nilk received from farmr within a l
10 mile radius of TMI and, in fact, had disposed of milk from within that radius.
Dairies in the York, Lebanon and Lancaster areas also experienced declines in sales but to a lesser degree and for a shorter period of time.
The loss in sales of milk and other farm products just after the TMI incident was not solely due to a consumer fear over its consumption or use.
It must be remembered that an m
74.
Table 33 FARMER RESPONDENTS - TMI IMPACT STUDY Within 11-25 10 Miles Miles
, Total Universe of Estimated # of Farms /
700 4,300 5,000 1
Estimated Land Acreage /
95,000 555,000 650,000 1
Number of Farmers Responding Dairy 7
110 117 Livestock & Poultry 14 105 119 Fruit & Vegetables 7
39 46 Grain Only 5
17 22 TOTAL 33 271 304 Sample Size (%)
4.7 6.3 6.0 Respondent's Land Acreage 8,319 52,367 60,686 Percent of Land Acreage Covered by Sample 8.8 9.4 9.3
! stimates based upon the 1978 Crop and Livestock Summary E
t and the 1974 U.S. Agricultural Census.
A proportionate
~
share of the county's totals equal to an approximate per-l centage of land area within the given radius from Three l
Mile Island was utilized to arrive at the estimates.
l Source:
Pennsylvania Department of Agriculture e
P e
i 76.
l Milk Juggers and Fresh Produce Farmers In reviewing the results on the study of TMI's impacts on farmers within a twenty five (25) radius of TMI, described above, it became apparent that farmers selling commodities directly to cont amers may have been more susceptible to fin-ancial loss af ter the unmediate accident period than those selling to a processor or food handler. Subsequently, the Department of Agriculture initiated another study in late October collecting data from over 100 farmers within 25 miles of the TMI plant who sell agricultural products directly to the public.
These farmers,who comprise a small segment of the total farm community, include milk juggers (who process and sell milk on their farm) and those farmers who raise fruit, vegetables and other produce and sell at roadside stands and/or at farmers markets.
The purpose was to measure any economic change as compared to previous years and determine contributory factors.
By mid-November, 1979, a total of 32 responses had been received and analyzed.
While the results of this effort are not yet complete, 44 percent who reported to date show an increase in sales (14), 40 percent a decrease in sales (13),
and 16 percent no difference from prior years (5).
The majority of those reporting a decrease in sales reported it to be between 11-25% in cash receipts.
The majority of those reporting an increase in sales reported an increase of between 6-10% in cash receipts.
~
Of the 13 who reported a decrease in Lsles this year as compared with prior years, only five attributed the decrease fully or partly to the Three Mile Island incident.
(These five comprise 16 percent of the 32 total responses).
The total who reported either a decrease in sales (13) or a lack of increase in sales (i.e., the five with no difference) is 18.
Taking into consideration the five who reported TMI as fully or partly responsible for decreases in sales, the relative ranking of all reported reasons for either a decrease or lack of increase among tne 18 respondents are:
the high cost and unavailability of gasoline (46%), TMI (19%), a drop in tourism (19%) and poor quality of fresh produce (16%).
'~ Milk Juggers - Of the 11 milk juggers reporting, five saw a decrease in sales this year.
Four attributed the decrease f
to the Three Mile Island incident; these juggers are located within a fifteen mile radius from Three Mile Island and their total losses amounted to about $60,000.
They reported their greatest economic loss occurred during the first four to five weeks following the Three Mile Island incident, and their sales are still lingering behind last years sales by approximately 10 percent.
One farmer located fifteen miles from Three Mile Island felt that his sales 78.
Three Mile Island incident would be between $250,000 and
$500,000.
The above estimate does not include the increased cost of electric power to farmers in the area as a result of the shutdown of Unit II, and future decisions in allowing Unit I to be put back into operation.
This increase in cost may in the long run be a greater economic loss to the farmer than the initial losses occurring from the Three Mile Island 4
scare in March and April of this year.
e 9
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Overtime Pay Costs From March 30, 1979 through October, 1979, TMI related over-time pay for state employees totaled $124,910.*
Agencies incurring the largest overtime costs were the Pennsylvania Emergency Management Agency, Department of Environmental Resources, the State Police, the Justice Department, end the Governor's Office.
Overtime work which was necessary to meet the special re-quirements of the accident alac includes compensatory time.
State personnel regulations applied to TMI related overtime.
State employees covered by union representation are eligible for either overtime pay or compensatory time, depending upon a mutual agreement with their superiors.
In either case, time and a half is granted with holidays exacting a premium.
Supervisory employees are not normally granted overtime pay, but are eligible for compensatory time equal to the exact number of overtime hours worked.
Additional Expenses Additional non-personnel expenses totaling $314,124 were incurred by many state agencies between March 30, 1979, and the end of October, 1979, as a result of the accident.
The Departments of Health and Environmental Resources, the Emergency Management Agency and the Public Utility Commission incurred the majority of these additional expenses.
In-cluded in these expenditures were Health Department contracts for population radiation dose assessments, TMI health related economic cost studies, Environmental Resource Department sampling and monitoring equipment, an Emergency Management Agency booklet about nuclear radiation for public distribution and Public Utility Commission legal expenses.
Overtime costs of $2,078 were incurred by the Pennsylvania Turnpike Commission which operates solely on tolls, not taxes, and therefore this figure is not included as a state expense.
1 i -.
S I
82.
Personal Income The Department of Revenue receives personal income tax pay-ments fran three sources at varying times throughout the year.
The major portion of the PIT receipts is derived from the employers' withho] ding nystem and is remitted (like the sales tax) on three different schedules; semi-monthly, monthly and quarterly depending on the number of employees.
The dis-tribution of filers in che personal ir.come tax system, like that for the sales tax system, is unstable through time because of on-going efforts to correttly categorize tax-payers.
This renders historic comparisons and allocations of the receipts to the proper earnings period impossible.
Furthermore, the personal income tax employer's withholding reports, like those in the sales tax system are not location specific since receipts are recorded according to the address of the firm's headquarters.
The remaining sources of personal income tax receipts are the individual remittances of estimated liability and final lia-bility.
Clearly, final liability payments (due April 15th of the following year) which are based on 365 days of income are too general for use in assessing the possible effects of a tour day abberation.
The estimated payments are made quarterly by those individuals who expect '.o owe the Common-wealth more than $200 at the close of the year and by definition are not wholly accurate records of income.
The 1979 income tax data for these two categories of taxpayers will not be available until April, 1980, but it will be impossible, even then, to separate the effects of inflation, unemployment and TMI on these receipts.
Sales and Use Tax l
For a variety of reasons, the sales and use tax data is in-adequate for the type of analysis required here.
1.
Motor Vehicle Sales Tax collections are included 4
in these figures.
This is a problem because the behavior of the Motor cahicle Sales Tax series is significantly different than that of other sales tax categories and its relative proportion of total collections is variable.
Thus, aggregate sales tax comparisons from year-to-year are un-l acceptable.
2.
Remittance of dales tax by vendors occurs in a three-tiered fashion.
Vendor's are required to file on a semi-monthly, monthly or quarterly basis depending on the size of their remittance.
Many l
84.
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1
The results of these analyses are presented in Table 34 and 34-A which compare the predicted and actual growth rates for total realty transfer tax receipts and average receipts per transaction, respectively.
On average, there exists a two-month lag between the date a property is offered for sale and the date the realty transfer is recorded so only the June actual and forecasted growth rates reflect economic activity occurring after the Three Mile Island incident.
However, the January through May comparisons are important as controls on the interpretation of the June results.
Table 34 indicates that forecasted growth was uniformly positive for each county in June but actual growth was uniformally negative for each county in that month.
Analyzed independently, this would suggest that the incident at Three Mile Island had a significant negative impact on the area's real esta*.e market.
However, in the April and May comparisons which reflect actual and predicted sales occurring before the Three Mile Island incident, the forecasts again generally had the opposite signs of the actual growth statistitics which suggests factors other than the nuclear accident were affecting the real estate market throughout this three-month period.
Analysis of the results presented in Table 34-A in conjunction with those presented in Table 34 offers some limited insights into the dynamics of the area's real estate market shortly after the incident.
Most importantly, no general trend in the average tax per sale (and therefore in the average sale price, in constant dollars) can be detected.
However, in June in every county total tax receipts declined more than the average tax per transaction and, in at leact one case (Lancaster County), average tax per transaction rose while total tax receipts fell.
This suggests that the decline in total receipts is attributable to reduced sales volume rather than reduced property values.
In fact, it must be true that average sales price, measured in constant dollars were not declining or falling shortly after the incident but must actually have been rising.
Since the incident apparently had no negative impact on pro-perty values, no case can be made for compensating those who owned property in the area at the time of the incident.
In fact, it appears that the only dislocation to the real estate market occurring during this period was an increase in the average time required to consummate a property transfer.
However, even this phenonenon cannot be attributed solely to the Three Mile incident.
Analysis of Tables 34 and 34-A suggests that total receipts (i.e.,
sales volume was declining or equivalently, the sales period was lenthening) at least two months before the accident occurred.
- In both cases, the data was correcte.d for icflation by dividing each monthly observation by the Pennsylvania housing price index.
86.
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TABLE 34 Forecast and Actual Crowth Rates for 1979 Total Real Estate Transfer Tax Receipts Forecast Growth Rate (%)
Actual Growth Rate (%)
Month Dauphin Cumberland Lancaster Lebanon Perry York Dauphin Cumberland Lancaster Lebano, Perry York Jrnuary
.22 1.47
.21
.43
.36
.42
.38
-9.78 1.05
.70 1.03 1.65 February
.10
.31
.49
.1_
.64
.04
-2.8
.58
.70
.35 2.19 1.03 I
Harch
.15
.55
.45
.30
.13
.14
-1.42
-3.04
.58 3.69 4.30
.77 April
.03
.13
.05
.17
.55
.15 1.21
.26
.58
.62
.89
.98 May
.34
.21
.39
.07
.87
.41
-2.13
-1.86 1.89
.61
-4.02
.62 i
June
.71
.21
.50
.37
.78
.54
-3.55
-2.84
-1.52
-2.09
-7.49
-2.39 00 00
Impacts on Local Government The TMI incident resulted in many commur.ities sustaining expenditures above and beyond their normal budgets allocated for the provision of governmental services during the crisis period.
For communities generally in close proximity to the TMI plant, substantial expenditures were necessary.
The TMI event caused many local governments to respond to the voluntary evacuation of some of their residents and incur various emergency expenses.
Manj communities found it e
necessary to provide additional police protection to protect the property of those who left their homes unattended. For others, there were problems related to the evacuation of the elderly and the infirm.
Local governments also made plans for the movement of institutionalized persons and school children in the event that an evacuation of their community became necessary.
Some of the increased costs resulted from governmental employees working long overtime hours in order to be ready to participa.c in evacuation.
The Department of Community Affairs in its inventory of local governments (data assembled from responses from 68 governmental units up to mid-August) has examined the magnitude of the accident /related ent'.s these bodies incurred.
Three counties and 34 local communities reported that they had expenditures - reported dallars were S113,000.
The range of these costs was quite large -- from a low figure of $16 to a high figure of almost $23,000.
Five of these local communities reported that they had costs, but they were " minimal".
l The 29 local governments which reported expenditures indicated that they expended $71,311 as a result of TMI; this averages S2,459 per gove.rnment.
In addition, the three counties which reported additional TMI related costs (Cumberland, Dauphin and York) spent S41,848 -- an average of $13,949 for each county.
l' A portion of the funds expended by local governments may be recovered via outstanding insurance claims payable by Metro-politan Edison or its insurance carriers.
To date, 27 local municipalities and government related agencies have filed claims for a minimum of S70,151.
As of December 10, 1979, Metropolitan Edison has made repayment to three municipalities for S10,417.
These actions are discussed in more detail in the section on long range problems.
90.
Preliminar; information indicates little to no community programs effect on local townships in the i'MI area.
In Swatara, Lower Swatara, and Londonderry Townships, the new 1980 budgets de not reflect expensus or losses attributable to TMI.
(Harristurg Evening News, 11/15/79).
Further budget revelations frcm Cumberland County, diture deficits.
Middletown, and Middle Paxton Township exhibit no TMI expen (harrisburg Evening News, 12/4/79).
Community Development Of par,icular interest with regard to Incal government is
~
the impact which TMI may have had on community development.
This encompasses those impacts which may be affecting com-munity program and service expectations, such as those pro-vided through community development block grants.
To ascertain this information, the problems which TMI caused local govern-ments need to be understood as well as their relevance to community development programs.
The Department of Community Affairs initiated efforts to gather information in June, 1979 to determine proclems which the 120 local governments and the counties lying partly or totally within the 20 mile radius encountered as a direct result of the incident.
Sixty-eight units of government had provided responses by mid-August.
Information was sought concerning six community development related areas - community development goals and priorities, commercial revitalization, municipal services, experience in the municipal bond market, anticipated future costs or reductions in revenues, and the need for federal or state grants to overcome TMI-related problems.
The results indicate that the problems did not seem to involve many communities.
Fifteen local communities indicated that they experienced or could perhaps expect to encounter one or more of the six problem areas.
Three county responses also indicated probems.
Except for two cases, each of the problem areas seem to affect only a few communities.
Future revenue losses or future costs were anticipated or considered a possibility by six of the communities and one county; five communities felt there was some i.tpact on planning activities, with emphasis on the need for upgrading emergency preparedness and evacuation plans.
In addition, one county indicated that emergency preparedness has taken on a higher priority.
In the area of problems related to commercial revitalization and experiences on the bond market, it appears that, at the time of data collection, it was too early to tell if such problems would be encountered.
However, one county reported that since TMI, its bond rating has been downgraded from AAA to AA, which may have had as its contributing cause changes in tax base and budgetary outlook.
92.
F Table 35 Technical Assistance Requested 4
Communications Systems 8
Revenue Sharing 17 Economic Development 5
Community Development 4
Intergovernmental Cooperation 4
Code Enforcement 4
Capital Programming 3
Budgeting 2
Accounting 2
Public Works Management 1
Source:
Department of Community Affairs be S
m O
94.
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LONG RANGE IMPACTS l
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l 95.
LONG RANGE IMPACTS The accident at TMI Unit #2 coupled with the continued outage status of TMI Unit #1 (which was down at the time of the accident for routine refueling but has not been re-activated pending resolution of safety questions) carries significant long. term economic impacts for Pennsylvania ratepayers served by Metropolitan Edison'and its corporate sister, Pennsylvania Electric.
Together the tuo utilities serve a wide geographic area of the Commonwealth stretching from Easton on the Delaware River to Erie in the north-western corner of the State.
They serve almost 850,000 customers encompassing a total population of over 2.3 million people.
The generating capacity of the two Three Mile Island nuclear reactors is more than 1600 megawatts - 880 megawatts from j
Ur.it #2 alone.
Together this supplies 38 percent of all l
Metropolitan Edison's generated power and 13 percent of Pennsylvania Electric's.
In order to make up the deficit caused by the shutdown, the two utilities have been purchasing power from other utilities.
Costs have been estimated at S22 million per month or S264 million per year.
If TMI Unit
- 1 goes back on line, the montaly cost is estimated to decline to approximately $10 million per month.
The nonoperating status of both TMI units, portends a signi-ficant, adverse long term economic dislocation for residential, commercial and industrial users.
A federal Department of Energy study has estimated that the monthly cost for the average residential customer of Metropolitan Edison has risen S7.50 due to the accident.
Intensive energy using i
industries in the area served by Metropolitan Edison and i
Pennsylvania Electric have also expressed caution about expansion and new investment plans pending the outcome of cecisions on both units.
l The outlook for the two TMI nuclear generators is strikingly different.
TMI Un..c #2, which was damaged in the accident, cannot be brought back onto line until January, 1983 at the absolute earliest.
Costs for rehabilitation range from S300 to $500 million and the operating utility is evaluating the possibility of converting TMI to a coal fire plant or completely replacing it either on the island or an entirely new site.
Costs for these options range from an estimated S468 million to S1,176 million.
TMI Unit #1 is in a unique situation prompted by the events which happened to its twin.
Although it has been refueled and can begin functioniaq, the Nuclear Regulatory Commission has witheld permission for restart pending resolution of safety questions.
It is presently unclear when these issues will be decided.
In addition., the Pennsylvania Public Utility Commission has issued a draw clause on Unit #1 which could serve to remove the fixed costs for this unit from Metropolitan Edison's rate base.
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Such an action would have a very serious financial impact on the viability of the operating utility.
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For example, about 25 percent of the firms in the employ-ment size glaup 1-99 expressed an unwillingness to expand.
Nevertheless, while the smaller firms indicated a greater frequency of concern than the larger firms, there were expressions of reservation on the part of some larger firms as well, with the exception of the large food processors.
The food processing industry would appear to have less reservations concerning expansion - almost 75 percent would consider expanding after the TMI experience.
This reflects the manpower and geographic locational advantages which Central Pennsylvania affords the food industry.
Industry's expansion plans may also be affected 'oy what happens over the longer term.
The degree to which Central Pennsylvania's " image" is restored as a safe place to live and work will play a major role in each individual firm's decision whether to expand or not.
For those already located in the area, no problems in recruiting personnel to relocate in the greater TMI area have been reported.
Additionally, there is a concern about increased e,lectricity rates that may result from TMI.
The future expansion activities of establishments presently in the TMI area and the degree to which these firms over-come the adversities created by TMI will serve as an economic indicator to other firms outside the area.
Many of these may be considering a location here for their business activity or expansion.
In summary, confidence as expressed in carrying out expansion by the existing business community will serve to engender inte.2st and confidence on the part of others outside of the TMI area.
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manufacturing sector (where nearly 33 percent of the estab-lishments were estimated to have a similar unwillingness to expand cr remain in the area with that size of electricity cost increase).
It is alarming that nearly 50 percent of the retail trade entities would be unwilling to expand in the light of only a 10 percent increase.
The mining sector would also be similarly sensitive to such an increase.
(Of course, there are a great many more retail than mining establishments, so the effect on the area's growth would be auch more devasta-ting, since over 3,000 retail establishments could be involved).
If the costs were to increase by 25 percent, there occurs a marked difference concerning the willingnass to expand or l
remain in the area between manufacturing and nonmanufact-i uring.
The Commerce Department's study found that elec-tricity cost increases of this magnitude would result in two-thirds of the nonmanufacturing entities being unwilling to expand or remain in the area.
An identical 25 percent increase would affect the plans of about 39 percent of the manufacturing establishnents.
In other words, a 25 percent increase would affect the plans of one out of every three manufacturing establishments and two out of every three nonmanufacturing entities (including four out of every five of those in the retail trade sector).
Beyond a 25 percent increase, the impacts would be devas-t tating.
Over three-fourths of all nonmanufacturing entities would be affected with the exception of the finance, insur-ance and real estate sectors.
Table 36 on the next page summarizes the study's findings concerning effects of electricity cost increases on the expansion plans of both manufacturing and nonmanufacturing.
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560,000,000 of the $560,000,000 Price-Andercon liability limit, their capacity has risen steadily to today's
$160,000,000.
The second layer is provided by assessing each nuclear reactor in the United States up to $5,000,000.
With 6E reactors this would provide S340,000,000.
The third and final layer of $80,000,000 is.vailable through the Federal Government.
As the pools capacity increases, the Federal Government's layer is similarly diminished.
The Nuclear Regulatory Commission establishes the financial requirements for each nuclear site.
TMI is required to provide a
s S140,000,000 of financial responsibility limits, the maximum then available from the pools.
In addition, the Nuclear Insurers provide property damage insurance for the site itselt.
TMI has $300,000,000 coverage for repairing the damaged reactor and other property at the island.
Individual property owners near nuclear power plants cannot purchase insurance against a nuclear accident on their own.
The reasons for this exclusion ~are:
the catastrophic potential of a nuclear power plant failure is virtually unlimited; the cost to insure individual property owners most susceptible to a nuclear accident is considered to be astronomical; and, most importantly, the Price-Anderson Act requires nuclear power plar.t owners to maintain liability insurance against radioactive contamination, negating the need to insure innocent third parties from damages sustained in the event of a nuclear accident.
Pending Claims Only the relocation and wage loss claims which were discussed earlier, have been settled to date by the nuclear insurers.
These claims represent simple and straightforward damages easily decidable as a result of the Governor's advisory of March 30, 1979, that pregnant women and families with pre-school age children evacuate from within the five mile radius of TMI.
The remainder of the lawsuits discussed below represent unique and difficult legal questions which will be addressed in a courtroom setting.
Therefore, no conclusions or analysis beyond the most cursory level can be formulated regarding these claims.
Given the status of federal court dockets, the substantial, unprecedented nature and amount of damage levels alleged, it is expected that it will take years to ultimately resolve these claims.
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Twenty other municipalities and counties within a ten mile radius of the plant have also filed claims which are being processed by Met Ed.
Volunteer fire companies will also be offered restitution.
Middletown Borough also received $7,500 from the Nuclear Regu?atory Commission and S1,362 from the Pennsylvania Health Department for the use of municipal facilities during and after the cris's period.
Business interruption claims have been filed by 115 concerns for damages of at least S1,700,000.
One firm alone, a major foodstuffs processor, has an alleged income loss of nearly
$867,000.
Many of the claims filed to date are for un-specified damages.
Eighteen individual and one class action lawsuit against the General Public Utilities Corporation, Metropolitan Edison, and its equipment suppliers, have been filed in the U.S.
District Court for the Middle District of Pennsylvania which sits in Harrisburg.
The class action suit is a consolidated class action consisting of 73 named plaintiffs and seeks damages to $560 million - the Price-Anderson Act limitation.
In addition to seeking damages, all parties included in this action ask for abatement of a nuisance (the Three Mile Island plant) creation of a trust tu guarantee payments of future medical services and "such other relief as is just and proper."
The 16 individual suits generally seek damages,'where specified, in excess of $10,000 in compensatory, and in excess of S10,000 for punitive damages.
I For all suits a twenty year statute of limitations rule j
applies under Nuclear Regulatory Commission rules, t
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