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Dek Terrell, PhD | Executive Director, Economics and Policy Research Group
Executive Summary
Operations Impacts
> If chosen for the Offshore Patrol Cutter Program, Bollinger estimates that over
1,800 employees will be employed on the project by 2026.
> The project will create 2,776 jobs on average in the State of Louisiana. Total
new Louisiana new earnings of over $2.3 billion and $7.3 billion of new output
are anticipated over the ten years of construction..
> The project is estimated to generate over $113 million in Louisiana state tax
revenues by 2031.
> The region consisting of Terrebonne, St. Mary, Lafourche, St. Charles, St.
Tammany, Orleans, and Jefferson Parishes should expect significant economic
growth with 2,597 jobs on average created, total new earnings of $2.2 billion
and output of $6.9 billion over the 10 years of the project.
> Terrebonne Parish will receive major economic benefits from the project with
an average of 1,836 jobs created. The results imply $1.6 billion of new earnings
and $5.2 billion of new output can be expected in the Parish during the ten-
year time horizon.
The Economic Impact of the Bollinger Shipyards’ Offshore Patrol Cutter Construction 1
Introduction
This report summarizes estimates on the economic impact of Bollinger Shipyards, L.L.C being chosen to
build up to 11 ships for the U.S. Coast Guard Heritage Class Offshore Patrol Cutter (OPC) Program. The
report examines the economic impact on the State of Louisiana, a seven parish region of interest and
Terrebonne Parish which contains as the primary construction facility.
Bollinger Shipyards was founded by Donald Bollinger in 1946 as a small machine shop on the banks of
Bayou Lafourche. Today, Bollinger is the largest privately-owned shipyard in the United States. In the late
1970’s, Donald Bollinger Jr. struck a deal with the U.S. government to build three tugboats for the Panama
Canal Co. This deal began a long partnership between Bollinger and the U.S. government that continues
to this day. Since then, Bollinger Shipyards has become one of the most respected government and
military shipbuilders and has constructed 172 vessels for the U.S. Coast Guard and Navy.
Methodology
Like a rock dropped into a pond, an injection of new dollars into an economy ripples throughout that
economy. Spending by the firm and its employees directly creates new sales in the community. Area
businesses that benefit from those expenditures in turn hire additional workers. Spending by those
businesses and their employees then creates another round of sales for other businesses, and the
process continues. Economic impact analysis provides us with the tools to quantify the full impact of
these ripple effects within an economy using jobs, earnings, and value added multipliers.
Wassily Leontief was awarded the 1973 Nobel Prize in Economics “… for the development of the input
output method and for its application to important economic problems.”1 Not surprisingly, input-output
models have advanced considerably over the five decades since Leontief’s award. However, the same
fundamental principles apply. The methodology relies on the assumption of linear relationships (and
technology) to capture commodity flows from producers to intermediate and final consumers.
1
Miller, Ronald E. and Peter D. Blair (2009), Input-Output Analysis, New York: Cambridge University Press.
2 The Economic Impact of the Bollinger Shipyards’ Offshore Patrol Cutter Construction
The model is attractive because it allows economists to quantify the spillovers from additional activity
in one sector. For instance, an expansion in one industry leads to greater income for workers and other
industries. These groups in turn spend more in the economy, creating another round of activity. Input-
Output analysis provides a method of quantifying the sum total of these ripples through the economy.
Miller and Blair (2009) provide a full overview of input-output analysis. This study uses Implan software
(2017) for computations.2 The economic impact analysis measures four areas of impact: jobs, earnings,
and output, and taxes. These impacts comprise three components:
Direct: Amount of employment or value of labor income, etc. that is produced directly by the project.
Indirect: Inter-industry impacts of such as buying equipment and supplies from other businesses in
the region.
Induced: Impacts of household spending by employees of Bollinger and new employees of firms
benefitting from secondary expenditures.
Figure 1: Projected Bollinger Employment for Coast Guard Cutter Construction by Year
2,000
1,800
1,600
1,400
1,200
1,000
800
600
400
200
IMPLAN Group, LLC, IMPLAN System (data and software), 16740 Birkdale Commons Parkway, Suite 206, Huntersville, NC 28078 www.IMPLAN.com.
2
The Economic Impact of the Bollinger Shipyards’ Offshore Patrol Cutter Construction 3
Results
In this section the total economic impact, including the direct, indirect, and induced impact, is presented
at three different levels: the impact on the State of Louisiana; a regional impact, which includes the seven
parishes of Terrebonne, Lafourche, St. Mary, St. Charles, St. Tammany, Jefferson, and Orleans; and the
impact on Terrebonne Parish. In each case, we will provide the estimated impact on employment, output,
earnings and tax revenues over the life of the project.
4 The Economic Impact of the Bollinger Shipyards’ Offshore Patrol Cutter Construction
Impact of Offshore Patrol Cutter Construction on the
State of Louisiana
Given the size of the project which is expected to last ten years and employ over 1,800 workers at the
peak, it comes as no surprise that the project will have a large impact on the Louisiana economy. Table 1
contains the estimated total impact, direct and indirect impacts on the State of Louisiana annually, as well
as the total impact over the life of the project. The pattern of economic impact follows the construction
pattern depicted in Figure 1. Activities rise over time until 2027 when Louisiana can expect 4,867 jobs
directly or indirectly supported by this Bollinger Shipyards project. This translates into over $400 million
of new Louisiana earnings in both 2027 and 2028. Output impact peaks in 2028 with almost $1.3 billion
of new output attributable in that year alone.
Over the life of the project, Louisiana can expect $7.3 billion in new output ($6.0 billion in current dollars)
and $2.3 billion in new earnings. The average number of new Louisiana jobs created exceeds 2,700 per
year over the life of the project. The final row translates totals into 2021 dollars or the present value of
new output and earnings.
The next phase of the analysis consists of estimating the impact of the project on Louisiana state tax
revenue. Table 2 illustrates the expected amount of State tax generated from the project that Louisiana
The Economic Impact of the Bollinger Shipyards’ Offshore Patrol Cutter Construction 5
will collect each year until 2031. During the project’s initial year, 2022, the State of Louisiana is estimated
to collect over $930,000 in tax receipts. The amount of Louisiana State tax generated by this project
should exceed $19.8 million in 2027 and 2028 at the peak. Following the peak year 2028, state tax
receipts begin to decline as construction slowly winds down until 2031. If Bollinger Shipyards is chosen
for the Offshore Patrol Cutter program, the project is estimated to result in over $113 million in total new
Louisiana state tax revenues.
Year Dollars
2022 $932,408
2023 $1,685,230
2024 $5,855,065
2025 $13,422,171
2026 $19,011,139
2027 $19,815,478
2028 $19,881,343
2029 $18,152,053
2030 $11,124,417
2031 $3,773,295
Total $113,652,599
6 The Economic Impact of the Bollinger Shipyards’ Offshore Patrol Cutter Construction
Impact of Offshore Patrol Cutter Construction on
Terrebonne, Lafourche, St. Mary, St. Charles, St. Tammany,
Jefferson, and Orleans Parishes
Table 3 contains the estimated number of jobs, earnings, and output generated in a key region of interest
during the Offshore Patrol Cutters project. The parishes that make up the region are Terrebonne, St.
Mary, Lafourche, St. Charles, St. Tammany, Orleans, and Jefferson. Table 3 follows the same trends as
Table 1 with the total job creation peaking in 2027. Earnings and output in current dollars peak in 2028 as
inflation offsets modest job reduction from 2027 in that year. If Bollinger is chosen for the Offshore Patrol
Cutter program, the region can expect significant economic growth with an estimated 2,597 new jobs
supported on average generating total new earnings of $2.2 billion over the life of the project for the
region. The region could expect $6.9 billion of new output over the life of the project.
Table 4 uses these measures of anticipated new economic activity from the OPC program to estimate
the amount of sales tax the region might expect from a Bollinger OPC construction project. The pattern
of sales tax collections follows that of the project in Figure 1 and impacts in Table 3. Overall, the region
can expect to earn over $38.8 million in new sales tax collections over the full ten-year time horizon as a
result of a Bollinger OPC program.
The Economic Impact of the Bollinger Shipyards’ Offshore Patrol Cutter Construction 7
Table 4: Estimated New Regional Sales Tax Collections Attributable to the Bollinger OPC Project
2022 $320,287
2023 $577,551
2024 $1,996,505
2025 $4,579,190
2026 $6,490,497
2027 $6,768,710
2028 $6,791,390
2029 $6,201,983
2030 $3,805,275
2031 $1,293,659
Total $38,825,048
8 The Economic Impact of the Bollinger Shipyards’ Offshore Patrol Cutter Construction
Impact of Offshore Patrol Cutter Construction on
Terrebonne Parish
Table 5 estimates the number of jobs, earnings, and output generated in Terrebonne Parish if Bollinger is
chosen for the Offshore Patrol Cutter Program. This includes both direct employment hired by Bollinger
and the indirect and induced impact of the project. As mentioned in Figure 1, much of 2022-2023
will be spent on design and materials before ramping up in 2024. In 2024, the project is estimated to
create 1,068 direct and indirect jobs with total earnings of $82 million and output over $251 million in
that year. The economic impact continues to increase after 2024 and peaks in 2027 with an estimated
3,211 total jobs created with earnings of $273.7 and output of $919.0. These numbers stay consistent for
2028 before the project begins to slowly wind down in 2029. From 2029-2031, the number of total jobs
supported declines from 2,772 to 513 and total output created declines from $848.8 million to $196.9
million. If Bollinger is chosen for the Offshore Patrol Cutter Program, Terrebonne Parish will experience
large economic benefits due to the magnitude of the project. It is estimated that an average of 1,836 jobs
will be created with earnings totaling over $1.5 billion and output totaling over $5.2 billion during the ten-
year time horizon.
Table 6 reports the estimated sales tax revenue generated in Terrebonne parish over the ten-year time
horizon. As the number of employees rise, the amount of sales tax generated increases with the amount
peaking in 2028 for Terrebonne Parish. From 2026 through 2029, the amount of sales tax revenue for
Terrebonne Parish exceeds $2.5 million each year. These numbers rapidly decline in 2030 and 2031
The Economic Impact of the Bollinger Shipyards’ Offshore Patrol Cutter Construction 9
as the project nears its end. If Bollinger Shipyards is chosen for the Offshore Patrol Cutter program, it
is estimated that Terrebonne parish will earn over $16.1 million in sales tax revenue, which represents
almost half of the total 2019 sales tax collections in Terrebonne Parish.
Table 6: Estimated New Terrebonne Parish Sales Tax Collections Attributable to the Bollinger OPC Project
2022 $136,556
2023 $245,431
2024 $840,837
2025 $1,916,069
2026 $2,702,336
2027 $2,807,827
2028 $2,816,785
2029 $2,568,371
2030 $1,562,635
2031 $522,820
Total $16,119,667
10 The Economic Impact of the Bollinger Shipyards’ Offshore Patrol Cutter Construction
Conclusion
This report examines the potential impact of Bollinger Shipyards winning a major Coast Guard contract
to construct Offshore Patrol Cutters in Terrebonne Parish. Results predicts a major economic impact on
Terrebonne Parish, the surrounding region and the State of Louisiana. The impact on Louisiana peaks
in 2027 with 4,867 total new Louisiana jobs created. The results predict $2.3 billion of new Louisiana
earnings and $7.3 billion of new Louisiana output over the life of the project and $113.7 million of new
Louisiana taxes.
In terms of employment, earnings and output, a large portion of the benefits accrue to the seven parish
region of interest, $6.9 billion of new output will accrue to the region. Terrebonne Parish can expect $5.2
billion of new output if Bollinger Shipyards is chosen for the Offshore Patrol Cutter project.
The Economic Impact of the Bollinger Shipyards’ Offshore Patrol Cutter Construction 11
References
IMPLAN Group, LLC, IMPLAN System (data and software), 16740 Birkdale Commons Parkway, Suite 206,
Huntersville, NC 28078 www.IMPLAN.com.
Miller, Ronald E. and Peter D. Blair (2009), Input-Output Analysis, New York: Cambridge University Press.
12 The Economic Impact of the Bollinger Shipyards’ Offshore Patrol Cutter Construction