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Regional Economic Assessment & Strategy for Coal-Impacted Navajo

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Regional Economic Assessment & Strategy for Coal-Impacted Navajo Regional Economic Assessment & Strategy for Coal-Impacted Navajo and Apache Counties, Arizona June 24, 2018 Prepared for: Navajo County, Arizona Economic and Workforce Development P.O. Box 668 Holbrook, Arizona 86025-0668 Prepared by Highland Economics 2344 NE 59th Avenue Portland, Oregon www.highlandeconomics.com With funding from the U.S. Economic Development Administration’s Assistance to Coal Communities program, Arizona Public Service Electric Company, Real Arizona Development Council, and Navajo County. TABLE OF CONTENTS ES Executive Summary .................................................................................................................................. 5 ES.1 Current Economic and Demographic Conditions .............................................................................. 6 ES.2 Type and Magnitude of Coal-Related Economic Impacts ................................................................. 8 ES.3 Regional and Community Strategies for Mitigating Economic Impact ............................................. 9 ES. 3.1 Community Visioning .............................................................................................................. 10 ES. 3.2 Quality of Life .......................................................................................................................... 11 ES. 3.3 Branding and Regional Marketing ........................................................................................... 12 ES. 3.4 Business Environment ............................................................................................................. 13 ES.4 Infrastructure Investments ............................................................................................................. 14 ES.5 Other Sector Economic Diversification Opportunities .................................................................... 15 ES.6 Next Steps: Action Plan ................................................................................................................... 19 1 Introduction ................................................................................................................................ 21 1.1 Geographic Scope ....................................................................................................................... 21 1.2 Purpose and Scope ...................................................................................................................... 22 1.3 Setting the Stage: Factors Affecting Rural Economic Growth .................................................... 22 1.4 Approach, Scope, and Report Outline ........................................................................................ 23 2 Demographic and Economic Overview ....................................................................................... 25 2.1 Population ................................................................................................................................... 27 2.1.1 Age Distribution .................................................................................................................. 29 2.1.2 Educational Attainment ...................................................................................................... 30 2.1.3 Commuting Patterns ........................................................................................................... 32 2.2 Labor Force ................................................................................................................................. 33 2.2.1 Unemployment ................................................................................................................... 35 2.2.2 Underemployment .............................................................................................................. 36 2.3 Employment and Income ............................................................................................................ 38 2.3.1 Employment and Income by Source ................................................................................... 38 2.3.2 Employment and Earnings by Industry ............................................................................... 42 2.3.3 Comparative Analysis of Employment ................................................................................ 42 3 Economic Impacts of Coal Mining and Coal-Fired Power Generation ....................................... 49 3.1 Reduced Power Generation & Coal Demand in Northeast Arizona ........................................... 50 HIGHLAND ECONOMICS, LLC ii Apache and Navajo Counties Economic Assessment & Strategy 3.2 Economic Impacts of Coal Mining and Coal-Fired Power Generation in Northeastern Arizona 52 3.2.1 Direct Employment and Income Impacts in Coal and Coal-Power Generation Sectors ..... 52 3.2.2 Total Regional Employment and Income Impacts .............................................................. 53 3.3 Direct Fiscal Impacts on Local, Tribal, and State Governments .................................................. 58 3.3.1 Navajo County Fiscal Impacts ............................................................................................. 59 3.3.2 Apache County Fiscal Impacts ............................................................................................. 61 3.3.3 Tribal Fiscal Impacts ............................................................................................................ 63 4 Best Practices Case Studies ........................................................................................................ 64 4.1 Rural Queensland, Australia: Labor Attraction ........................................................................... 64 4.2 Bend, Oregon: Quality of life and Business Ecosystem............................................................... 66 4.3 Columbus Ohio: Public Private Partnerships for Economic Development ................................. 68 4.4 Ogden, Utah: Outdoor Manufacturing Industry ......................................................................... 70 4.5 Wyoming: Gun Manufacturing Industry ..................................................................................... 73 4.6 Pennsylvania Wilds: Outdoor Recreation ................................................................................... 74 4.7 Gila Bend, Arizona: Renewable Energy ....................................................................................... 76 4.8 New Mexico, Land Owner Wind Energy Associations ................................................................ 78 4.9 Upper Verde River Watershed Protection Coalition: Understanding Forest Resources ............ 79 4.10 Pacific Northwest Timber Communities: Recreation, Forest Restoration, Remote Workers .... 80 5 Strategies for Northeast Arizona ................................................................................................ 82 5.1 Shared Community Vision ........................................................................................................... 82 5.2 Quality of Life: Attracting Workers, Residents, Companies ........................................................ 84 5.2.1 New Workers ...................................................................................................................... 89 5.2.2 Former Residents ................................................................................................................ 89 5.3 Branding and Marketing ............................................................................................................. 91 5.3.1 Industries ............................................................................................................................ 91 5.3.2 Attracting Workers and Residents (Returning and Otherwise) .......................................... 92 5.4 Business Environment ................................................................................................................. 93 5.4.1 Entrepreneurial Culture and Small Business Support ......................................................... 93 5.4.2 Incubators and Shared Remote Work Spaces ..................................................................... 94 5.4.3 Broadband ........................................................................................................................... 96 5.4.4 Streamlining Resources for Businesses ............................................................................... 98 5.5 Regional Partnerships ................................................................................................................. 99 HIGHLAND ECONOMICS, LLC III Apache and Navajo Counties Economic Assessment & Strategy 5.5.1 Public Private Partnerships ............................................................................................... 100 6 Infrastructure ............................................................................................................................ 101 6.1 Infrastructure Gaps ................................................................................................................... 101 6.1.1 Broadband ......................................................................................................................... 101 6.1.2 Natural Gas........................................................................................................................ 105 6.2 Other Infrastructure .................................................................................................................
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