Georgia could pump millions of dollars into its economy by moving its 2024 presidential primary earlier in the year, according to new report.
The move, which is supported by national Democrats and the Biden administration, would shine the political spotlight on Georgia, prompting presidential candidates to invest more into the Peach State, according to the report by Thomas Smith, an Emory University finance professor. Smith was inspired to write the report when he realized there hadn’t been much research on the topic after speaking to a reporter from Georgia Public Broadcasting.
In February, the Democratic Party approved reordering its 2024 presidential primary, replacing Iowa with South Carolina as the first state to hold its primary followed by New Hampshire and Nevada.
In the new order, Georgia would become the fourth state to hold its primary, voting on Feb. 13, 2024. In the 2022 midterm primary election, the state voted on May 24, and the 2020 primary was delayed to June 9 that year because of COVID-19.
In 2020, by the time Georgia voted in its primary, Biden had a commanding lead in delegates, Bernie Sanders had already dropped out of the race and former President Donald Trump was essentially running unopposed in the Republican primary.
Politicians have already begun converging on Iowa, Smith told the Ledger-Enquirer, with Trump having held a rally recently and Nikki Haley likely in the process of setting up offices.
“They’re spending money,” Smith said. “They’re renting facilities. They’re holding rallies. They’re buying supplies.”
All of these factors bring additional money into the economy, he said, and creates the need to provide goods and services. Smith’s full report can be read here.
Spending across the state
The economic benefits of an earlier primary include additional dollars spent by candidates, national committees and political action committees, according to Smith’s report. This money would go toward:
Offices and associated rents
Hosting campaign events, such as rallies and parties
These organizations will not just set up 10 offices in Atlanta, Smith said, but will spread the offices out across the state in cities like Columbus, Macon, August, Athens, Savannah and others. This is because of the campaigns’ need for staging points, he said.
“They need to be able to meet people where they live,” Smith said. “Unlike the Super Bowl where you’re just going to have most of the spending concentrated in a very small area.”
In scenarios where money will be spent on hotels, food and beverage, clothing and other goods and services, that’s going to be a positive for the local economy, said Jerald Mitchell, president and CEO of the Greater Columbus Chamber of Commerce.
Smith estimates that there will be almost $48 million of direct economic impact dispersed across the state, meaning political agents will buy goods and services from regional companies.
That spending could then generate another $63 million, because those companies would then spend money with other businesses. And on and on.
“Your income becomes your spending,” Smith said. “Which becomes somebody else’s income…that’s the multiplier effect. The initial consumption turns into other people’s income, which now turns into their consumption.”
Smith’s report considered two scenarios of a potential 2024 primary. The first looked at the economic impact if there were 11 Republican candidates and one Democratic candidate, which Smith writes is the more likely scenario for the upcoming election. The second scenario he considered was the economic impact of 11 candidates for each major political party.
The report estimated that the total economic impact of direct and indirect spending from the most likely scenario would bring more than $111 million to the state.
Not taken into account in the report is the spending that would also be done by national news outlets, Smith said, which would also boost the economy.
“Those first bunch of primaries have an oversized importance,” Smith said. “If the media comes to town, and you have more people hanging out and spending money, that’s good for the economy.”
Job creation and tax revenue
While spending would account for the bulk of the economic impact of moving the primary up, Smith estimated in his report that around 2,200 jobs would also be created by the move.
The additional money in the economy creates the need to provide goods and services, he said, which drive job creation.
“These are politicians who are coming to town and spending a bunch of money, which is going to create jobs through economic activity,” he said.
On average, presidential candidates spend about $4.2 million on wages each during a primary, according to data from the Federal Election Commission. About $3.8 million goes to full-time employee wages, according to Smith’s report.
Whether the jobs created are permanent or temporary depends on the industry, Smith said. But because campaigns are long, individuals could earn a steady income.
“People are already holding rallies in Iowa for a caucus that will take place early next year,” he said. “So, they’re already engaging with the economy in Iowa 10 to 11 months out.”
Candidates will have to have offices and staff, said state Rep. Carolyn Hugley, and oftentimes it will be young people who will receive these positions.
“Young people are often the ones who are working these campaigns and manning these offices,” she said. “And it’s going to give our young people an opportunity to gain experience that they might not otherwise get in terms of running a national campaign or working with the national campaign.”
As a result of the increased spending and jobs created by the campaigns and companies providing goods and services, there will be more tax revenue, Smith said.
Around 75% of goods and services consumed by campaigns, national committees and PACs are subject to taxation at the state level, according to the report. Local tax rates will also be applied, he said, which will bring tax revenue to cities like Atlanta, Columbus, Macon, Augusta and others.
Smith’s report estimates that around $97 million in earnings from job creation will go towards the total economic impact in the most likely scenario for 2024, and almost $12 million of economic impact will come from tax revenue.
“Additional tax revenue will give us, as a state, an opportunity to invest more in our citizens,” Hugley said. “That might be more investment in our schools, it might be more investment in our higher education. All of those things will be affected because more tax dollars are going to come in.”
While Smith’s report indicates that there will be a positive impact of becoming an early state in the primaries, Mitchell warns that it is important to understand that this is only one report that should be taken in a measured way.
“There may be others that have different takes,” he said. “I think it’s our obligation to try to get all the information and understand the various points of views and what differing impacts could be.”
Ultimately, moving the primary up could give Georgians the opportunity to help set the tone for the presidential election, Hugley said. While Democrats have already approved the plan, changing the primary is also dependent on the Republican Party.
Reporting by NPR indicates Georgia Republicans have been hesitant to change the calendar, but Secretary of State Brad Raffensperger has until this fall to change the rules.
“Georgia is such a diverse state,” Hugley said. “And it will give candidates for the highest office an opportunity to learn what various communities are facing and what they’re fighting for.”