Allan Jenkins, Ph.D., Associate Professor of Economics, University of Nebraska - Kearney, Kearney, Nebraska 68847, (308) 865-8461.

The springtime staging of sandhill cranes along the Middle Platte River has drawn increasing national and international attention since the 1970s. Awareness of the unique environmental qualities of the region arose as a consequence of the debate generated by the proposed construction of the Midstate Irrigation Project. While this water diversion proposal was ultimately defeated in 1975, it brought national attention to the cranes and focused attention on the diminishing stretches of the river available to all migratory birds in the central flyway.

The unique qualities of the Middle Platte have attracted both public and private habitat efforts. The Nebraska Game and Parks Commission, Nebraska Public Power District, Central Nebraska Public Power and Irrigation District, and the Central Platte Natural Resource District have funded scientific studies and engaged in habitat improvement efforts. The National Audubon Society established the Lillian Annette Rowe Wildlife Sanctuary southwest of Grand Island in 1973. This was the first direct action taken by a private group to protect critical habitat in the Central Platte Valley. In the mid 1970s, the National Wildlife Federation and State of Nebraska filed suit to stop the Missouri Basin Power Project and the construction of Grayrocks Dam on the Laramie River. Both parties were concerned about the impact on downstream wildlife habitat, water supply and irrigation. The Platte River Whooping Crane Habitat Maintenance Trust was created as part of the court approved settlement in 1978. The Crane Trust has purchased more than 8,000 acres of land with the proceeds from the settlement.

No one knows exactly how many people come to the Middle Platte to observe the crane migration, or how much they spend. Because crane watching is dispersed over a multi-county area, estimating the number of participants is difficult. Outdoor recreation is certainly an important component of the Nebraska economy. A 1987 survey on outdoor recreation in Nebraska found that approximately $1 billion was spent statewide on outdoor recreation, with approximately $200 million spent on activities relating to wildlife observation. Tourism is currently Nebraska's third leading earner of revenue from outside the state, after agriculture and manufacturing. Travel and tourism expenditures in Nebraska totaled over $2 billion in 1995. This includes spending by nonresidents as well as by residents on trips to places 100 miles or more from home. The Nebraska Department of Economic Development estimates that 36,000 jobs in the state are dependent upon travel and tourism.

Most crane watching activity is concentrated in the Kearney - Grand Island area. This is largely due to the lodging accommodations available, the number of cranes in this immediate area, and the availability of crane viewing blinds and public access areas. Fort Kearney State Historical Park provides a popular crane watching location. In 1994, 9,654 people visited the park during the crane-watching season. Visitors came from forty different states and seven foreign countries. In 1995 the number of visitors dropped to 8,291, probably because of an unusually cold, wet spring. With the exception of the down year in 1995, Fort Kearney has witnessed a 20 percent yearly increase in crane watchers during the past decade.

Requests to Visitor Bureaus in the area have increased substantially. For example, the requests to the Grand Island - Hall County Convention and Visitors Bureau doubled from 1986 to 1987 on information regarding cranes and doubled again the following year. The annual "Wings Over the Platte" conference is an important tourism event in Grand Island. The director of the Kearney Visitors Bureau has estimated that crane watching activities and the River Conference fills 2,000 to 2,500 rooms over the entire migration period. Kearney's annual Crane Watch celebration begins with events in mid- February and runs through mid-April. The Audubon Society's Spring River Conference is also held in Kearney in the 3rd week of March to coincide with the peak of crane viewing activity. Many of the conference participants visit the Rowe Sanctuary. In 1990, 850 crane watchers used the Rowe Sanctuary blinds. This number has grown steadily, with 1,007 visitors in 1992, 1,211 in 1993, and 1,902 in 1994.

While the actual number of crane watchers visiting the Middle Platte is not known, local business interests intuitively feel that this number has increased since the late 1980s. One indicator of the number of visitors to the area is the amount spent on lodging. In Nebraska, communities have the option of enacting a lodging tax. By examining the pattern of lodging tax receipts, one can determine seasonal and yearly patterns and trends. By comparing lodging tax receipts in various counties, one can isolate the effect of a local amenity. For example, most crane watching is localized in the Big Bend Region of the Platte. Buffalo and Hall counties have most of the lodging facilities close to the prime observation areas. While a small number of cranes arrive as early as February, the majority of cranes, and crane watchers, arrive in the area in March. By comparing the lodging tax receipts from these two counties with other counties outside the crane watching region, it is possible to determine whether or not there is a statistically significant tourism effect for March.

NEBRASKA COUNTY LODGING TAX

The Nebraska Visitors Development Act, enacted in 1980, imposed a one percent State lodging tax on all hotels, motels, campgrounds, and bed & breakfast establishments. This revenue is used to fund the marketing and promotion programs of the Nebraska Travel and Tourism Division of the Department of Economic Development. The Act also granted authority to each county to collect a lodging tax at all commercial lodging facilities. By 1995, 45 counties had adopted a local lodging tax. This is politically popular tax because most of the revenue collected comes from visitors, not from residents of the county.

A county which decides to participate in the Lodging Tax Program has little flexibility, except in the actual choice of the tax rate. To participate, the county board must pass a formal resolution in favor of the tax, then submit a copy of this resolution to the Nebraska Department of Revenue. The county may choose to assess a tax rate of 0.5 percent, 1.0 percent, 1.5 percent, or 2.0 percent. (Douglas County was granted the authority to assess a tax rate of 4.0 percent.) Not surprisingly, 41 of the 45 counties with a lodging tax have adopted the 2 percent option. All tax collections are sent to the Department of Revenue, which retains the State lodging tax, takes 3 percent of the county tax to cover administrative costs, then returns 97 percent of the county tax back to the county of origin.

The returned revenue from the tax does not go into the county general fund, it goes into a County Visitors Promotion Fund, where it must be used for tourism marketing and promotion. The funds cannot be used for the actual construction of tourist attractions. (Douglas County was granted the authority to use one half of its receipts for a County Visitors Improvement Fund, which makes grants to expand and improve the facilities at public or non-profit attractions.) A five-person Visitors Committee in each county determines how to use the funds. Acceptable expenditures include the cost of printing informational brochures, erecting signs, advertising in mass media, and other marketing activities. Funds can cover salary and expenses for employees engaged in marketing.

LODGING TAX & SEASONAL VISITATION PATTERNS

There are significant incentives for lodging establishment operators to send tax collections to the Department of Revenue in a timely fashion. They receive collection fees if they send the tax receipts to the Department of Revenue within 25 days of the calendar month in which the lodging tax was collected. Therefore, lodging tax collections correspond closely with the time each visitor was in the area. The Department of Revenue is able to identify the month in which the tax was originally paid by a customer. From the time the customer first pays the tax until the county actually receives the corresponding funds from the Department of Revenue typically includes a one to two month lag.

Most Nebraska counties, particularly those along Interstate 80, have a strong seasonal pattern in lodging activity. Much of the local tourist traffic is merely pass-through traffic on the way to other destinations. Thus, winter months produce little tax revenue, revenues increase during the spring, reach a peak in July and August, then decline in the fall. The following graph illustrates this seasonal pattern using tax receipts from four counties located along Interstate 80. Because the tax is assessed as a percentage of room cost, and because room rates vary according to quality, location, and time of year, it is impossible to determine the exact number of rooms generating a specific tax amount. However, as illustrated by Figure 1, the general seasonal pattern is evident across a variety of counties. It is reasonable to assume that seasonal room rates are changing in a generally similar pattern throughout the region.

CRANE WATCHERS & LOCAL ECONOMIC ACTIVITY

While the total number of crane watchers is of interest, not all visitors have the same local economic impact. A family from Lincoln which fills the gas tank before leaving home on Saturday morning, packs a picnic lunch to eat at Ft. Kearney State Recreation Area, and drives back home Saturday night has little local economic impact. On the other hand, the family that spends Friday and Saturday night in a local motel, eats three or four meals at local restaurants, and shops at local retailers for additional supplies may inject several hundred dollars into the local economy.

Of course, the local economic impact does not end with the initial round of purchases. All Chambers of Commerce recognize the importance of the "multiplier effect" as the initial spending creates induced and secondary spending. Actually determining the magnitude of the local multiplier effect is difficult because it varies from industry to industry. For example, spending ten dollars on gasoline has a very small multiplier effect because most of the money immediately leaves the local system to import additional gasoline. Buying a dinner featuring locally-grown beef would have a large multiplier effect. A rough estimate of the overall effect from tourism expenditures gives a multiplier of two.

LODGING TAX EVIDENCE

Because the lodging tax is collected by the Department of Revenue in a reliable and consistent manner, changes in the pattern of visitors to various Nebraska counties can be tracked. Since most crane watching activity occurs in the Big Bend region of the Platte River during the month of March, Hall and Buffalo counties will receive most of the overnight crane tourists. To determine whether there is an identifiable tourism effect in March, a regression model is used to compare the pattern of lodging tax in Hall and Buffalo counties with two other counties. Dawson and Lincoln counties, located just west of Buffalo County, were selected for this comparison because they capture the normal Interstate 80 traffic flow just outside the crane viewing region, thus providing an appropriate benchmark. The following graph (Figure 2) illustrates the monthly lodging tax pattern for these two pairs of counties from 1987 through 1995.

As is obvious from the graph (Figure 3), there is generally more lodging activity in Buffalo and Hall counties than in Dawson and Lincoln counties. Visually, one notices the strong seasonable pattern discussed earlier. A visual examination also reveals a March upturn in Buffalo and Hall counties that is not present in Dawson and Lincoln counties. By examining the graph of an individual year, this March upturn is very apparent.

Using multiple regression, patterns from the two pairs of counties are compared. Regression analysis indicates that there is a strong statistical correlation between the two data sets. The specific regression results are presented in Table 1.

These results also indicate a statistically significant March tourism impact at the 95 percent confidence level. Using a March "dummy" slope to isolate the critical month, the results show that regression line passing through the March data has a different intercept than the overall regression and a different slope. (99 percent confidence level)

While there clearly is a statistically significant deviation from the general lodging pattern in March, can this impact be reasonably attributed to crane watching activity? In Hall and Buffalo counties, the only major non-crane related event during this period is Thoroughbred Horse Racing at Fonner Park in Grand Island. The racing season runs from March 1 through May 15. Thus, if horse racing visitors were determining the lodging tax pattern, there would not be a substantial decrease in April. Additional support comes from an examination of the pattern of attendance at state parks and recreation areas. For example, Fort Kearney State Park, one of the most popular crane watching sites, receives approximately 60 percent of its visitors during the summer months. Sherman County Lake, located just north of Buffalo County, receives more than 80 percent of its visitors in the summer. Lake McConaughy receives 75 percent of its visitors during the summer. The pattern of park attendance, like that of lodging tax, differs in the crane-viewing area.

Information provided by the lodging tax is consistent with the local view that crane watching activity has substantially increased within the last decade.

Return to 1997 Platte River Basin Ecosystem Symposium

Last updated by Darren A. Jack on 4/28/97