White House releases economic impact numbers on Thomson prison

[December 18, 2009]  WASHINGTON -- This technical memo describes the likely economic impacts on the local economy of the purchase and modification of the state prison in Thomson, Ill., and its subsequent use by the Department of Defense and the Bureau of Prisons as a federal facility. This memo assumes that the Bureau of Prisons occupies 75 percent of the facility and the Department of Defense occupies the remaining 25 percent. The primary estimates are:

1. The total increase in expenditures in the area over the first four years of operation through construction, operation costs, compensation and visitors to the area is between $0.9 billion and $1.1 billion.

2. In the first year, the modification, opening and running of the facility will generate between 2,290 and 2,960 jobs in the seven-county area. Local residents will be excellent candidates for 1,240 to 1,410 of these jobs. The other jobs will be filled by people relocating to the area. In this first year, total earnings will increase by between $131 million and $185 million.

3. In the second year, the operation of the facility will generate between 2,820 and 3,520 jobs in the seven-county area. By the third year, when the Bureau of Prisons facility is fully operational, the facility will generate between 3,170 and 3,870 jobs in the seven-county area. Local residents will be excellent candidates for 1,720 to 1,920 of these ongoing jobs generated by the facility. By the third year, earnings will increase by between $233 million and $289 million, relative to current levels.

4. The ongoing increase in employment reflects jobs created by yearly capital improvements (490-560 jobs), direct hires (1,900-2,400), jobs created by visitors to the area (280), and indirect jobs due to increased spending and economic activity (510-640 jobs by the fourth year). In addition, startup costs that occur in both the first and second year as well as one-time construction costs generate a substantial number of yearlong jobs (840-910).

5. Over the first four years, the 840-910 temporary jobs and the eventual 3,180-3,880 ongoing jobs generated by the facility are expected to increase local earnings by a cumulative $793 million to $1,015 million.

6. Approximately 80 percent of all of the jobs created by the facility will be held by people residing in Illinois, while people in Iowa will fill the remaining jobs. These jobs could reduce the unemployment rate in Carroll County, Ill., where Thomson is located, by 2 to 4 percentage points.

[Text from White House Council of Economic Advisers]