THE PUBLIC MIND: THE YES GROUP RESPONDS

To the Editor:

We would like to thank Dr. Steven N. Trautwein for questions and comments about the economics of the riverboat made in his letter to the Southeast Missourian on Wednesday. We would like to provide the following response to those questions and comments as they point to extremely important issues.

Dr. Trautwein posed the following question: "Where will the money spent on gambling at the Cape Girardeau riverfront come from?" He then suggested his own answer to that question, that the money would come from a variety of alternate purchases. He concludes that, "Every dollar spent on gambling is one less dollar available for these and other uses." The economic reality, however, is just the opposite. In other words, "Every dollar spent on gambling is one more dollar available for wages and benefits ($22 million annually) paid to people employed on the riverboat and related development. These dollars, in the form of income for people within our community, will then, in turn, be used to purchase the items listed by Dr. Trautwein: "savings accounts...children's clothing...life insurance premiums...groceries...IRA's...medicine...cultural offerings...health insurance policies...Red Cross donations...car payments...children's books..."

Employment is the key to the ability to purchase all of these items. Without jobs people are unable to make purchases such as these. But, the economic impact of these purchases does not stop there. Once the individual has used the income derived from employment to purchase these items, these dollars then become income to the business or individual with whom they are spent, such as the lending institution handling the savings account...the children's clothing store...the life insurance agent...the grocer...the Red Cross...the auto dealer...and the book store. This cycle repeats itself within a local economy several times, thus providing an economic effect referred to as "the multiplier". The multiplier is the number of times a dollar "turns over", that is, the number of times the dollar is spent in the area.

Using the conservative 2.0 multiplier provided by Pauline Fox, Professor of Economics, in her Economic Impact Study, wages and benefits of $22 million alone would have an economic impact on our local economy of $44 million. If you include the other items such secondary employees, visitors' expenditures, as well as the purchase of fuel for the boat, maintenance, supplies, and taxes, the overall economic impact amounts to $148.6 million annually.

The majority of the money spent on the boat will come from tourist or visitors from out of town. This is obvious in the other riverboat towns like Metropolis, Illinois. The millions of dollars in gaming revenue generated there didn't come from a town with a population of only 7,200 people. They came from Nashville, Memphis, St. Louis, and other cities throughout the country. Likewise, the 23 new businesses opened in Metropolis since March have opened there as a direct or indirect result of the riverboat development. With increased employment and tourist revenue an otherwise ailing Southern Illinois economy is prospering.

The $148.6 million annual economic impact would give a much needed boost to our ailing local economy. The recession, flood, higher taxes and the like have taken heavy tole on individuals and businesses throughout the area. Business closings among employers like Exchange Bank, Central Hardware and the like, compound the problems of uncertainty about higher taxes and increased costs for health care insurance.

Cape Girardeau needs the economic stimulus that would be provided by the riverboat development. Jobs, tax revenues, investment, and tourism can give us the needed opportunity for our future.

DAVID B. KNIGHT

CHUCK MCGINTY

TOM MOGELNICKI

EVELYN BOARDMAN

KENT ZICKFIELD

The Yes Group directors

Cape Girardeau