The economic benefits resulting from SCF Arizona include the direct activity created by the insurance carrier itself, as well as the impacts created by local supplier purchases, claims payments and employee spending. Economic impacts measure the effects of economic stimuli, or expenditures, in the local economy. All industries have some kind of economic impact in the rest of the economy. Industries like SCF Arizona that pay higher wages and have strong supplier relationships with other local industries have higher local economic impacts than firms that do not possess these characteristics. These impacts include direct and indirect jobs, personal income, and economic activity, or output, that is generated by SCF Arizona. Indirect impacts are the result of the multiplier effect and capture supported supplier and consumer businesses and their employees throughout Arizona that benefit from this locally-based company.
The operations of SCF Arizona detailed in this analysis provide substantial economic benefits to the state. These positive impacts include the following:
All total, SCF Arizona created an annual impact of $528.3 million on the Arizona economy in 2009. The operations of SCF Arizona directly and indirectly support an estimated 3,600 jobs and $204.5 million in personal income in Arizona.
The facility directly employs about 555 people with a combined payroll of $32.8 million annually and additional bonuses and incentive pay of $3.6 million in 2009. Through the multiplier effect, an additional 3,000 jobs and $167.9 million in annual payroll are supported annually at other businesses throughout the state. These additional jobs and payroll stem from direct and indirect impacts of supplier demand created by SCF Arizona and consumer demand created by its employees.
SCF Arizona made an estimated $38.5 million in local purchases for various services and supplies in 2009, representing 82 percent of total vendor purchases in that year. Based on the share of vendor purchases that are made locally, the annual economic impact of vendor purchases on the state is estimated at $68.2 million in 2009. This impact is included in the overall operations impact above.
SCF Arizona also made local equipment purchases of $770,000 and construction expenditures of $2.9 million for tenant improvements in 2009 that contribute to the company’s overall impacts. The $3.7 million in capital equipment and construction created an economic impact of $6.3 million in Arizona along with 43 jobs and $2.3 million in personal income.
Another component of the overall operations impact comes from employee spending. The 555 current employees working at SCF Arizona also 3 make a significant amount of local purchases. The effect of employee purchases generated a total economic impact of $43.5 million on the state in 2009.
In addition to other local spending, SCF Arizona paid out $150.1 million in claims to medical providers in the state. These payments created an annual economic impact of $265.8 million in 2009.
SCF Arizona generates a significant amount of direct tax revenues to state and local governments in Arizona, in addition to the economic impacts described above. Annual property tax revenues paid by the company are estimated at $1.4 million per year. In addition, the company generates a significant amount of state, county and city sales taxes that are not captured here. Finally, SCF Arizona is subject to insurance premium taxes in Arizona that are estimated at $10.5 million per year.
In addition to direct revenues, SCF Arizona generates substantial indirect property, sales and personal income tax revenues in Arizona through employee spending and property ownership. Indirect revenues are estimated at an average of $23.7 million per year to state and local governments.
SCF Arizona also plays an important role as a corporate citizen in Arizona. In 2009, despite the downturn in the economy, SCF Arizona made $570,000 in corporate contributions to non-profit entities with 61% going to business related events, as well as $239,700 in employee matching contributions and United Way contributions. In addition, SCF employees volunteered more than 5,800 hours in their local communities.
|2009 SCF Arizona Profile|
|Annual Earned Premiums||$275.00|
|Dividend Payments to Policyholders||$11.20|
|Local Claims Payments||$255.55|
|Charitable Contributions (100% in AZ)||$0.81|
|Employee Volunteer Hours||5,807|
|Local Vendor Spending||$38.46|
|Percent of Total Expenditures in Arizona||82%|
|Claims Payments to Local Medical Providers||$150.10|
|Annual Economic Impacts|
|Total Personal Income||$204.48|
|Annual State and Local Revenue Impacts|
|Source: Applied Economics, 2010.|
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