Tnl-News.com - Economic-stimulus payments spent locally multiply to benefit economy

By DENISE R. FREELAND

News Leader Staff Writer

As area residents begin to receive their federal economic-stimulus payments, Minerva Area Chamber of Commerce and Economic Development Executive Director Larry Kosiba would like to see them spend that money at local businesses, noting that the economic impact of these sales goes far beyond the initial purchase.

As explained in a paper from San Diego State University West River Agriculture Research and Extension Center, the total impact of a dollar produced or spent in a community can be measured through the use of an economic "multiplier," or a measure of how many times a dollar changes hands before leaving the community.

For example, if a resident spends $10 in a store, the storeowner may use a portion of that money to pay his rent. The landlord then spends part of his income on gasoline, and the service-station operator may use that money to meet payroll or pay utilities.

Some sources estimate the economic multiplier for an area such as Minerva, a community with a manufacturing base, to be as high as 3.2, Kosiba said.

If 25 percent of the approximately 2,000 people living in Minerva spend $600 of their economic-stimulus payments at local businesses, Kosiba said, that will create a $300,000 infusion into the local economy.

"If each dollar rolls over 3.2 times, that's about $1 million infused into the economy right here in Minerva," Kosiba said. "So, if you're looking for that new car, you need something from Kishman's grocery, Father Time's, any of the local restaurants, Kohmann's Mowers, or you're thinking of another purchase, it might be a good time to spend that money right in Minerva."

For a list of local businesses offering products and services ranging from landscaping to physical therapy, and from restaurants to auto dealerships, see www.minervachamber.com, and click on "Business Directory."