Delaware’s inland bays contribute to state’s economy

REHOBOTH BEACH, Del. – The fiery reflection of a sunset over the bay. The misty sea breeze rushing by while boating through the bay. A heron’s royal flight over the green swamp.

For many, experiencing the bays of inland Delaware can be priceless.

But that doesn’t mean these natural wonders don’t have real economic value either. From tourism-based industries like recreation and lodging to construction and real estate businesses, the bays contribute billions of dollars to the state — and that’s no exaggeration.

According to a recent report by the Delaware Center for the Inland Bays and Delaware Sea Grant College Program, the inland bays — which include Indian River, Rehoboth and Little Assawoman Bays — contribute more than $4.5 billion to Delaware’s economy.

It’s one of the statistics that the report’s co-author, Chris Bason of the Center for the Inland Bays, said helps her steadfast argument: Delaware’s Inland Bays are worth the financial investment.

“It just proves that protecting and restoring the water quality of inland bays is a really good investment, and what we need to do the most now, which is related to this report, is protect open spaces,” Bason said. “We must protect forests and wetlands before they are developed.”

That’s because forests and wetlands are key to filtering out the pollution that has been threatening the bays for years, he explained. While Sussex County and the state have made significant strides in preserving the land, Bason said there is still much work ahead — particularly work that needs the support of state and local policymakers.

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Using analysis from Key-Log Economics, Hauser and Bason argue that the bays not only contribute significantly to the local economy, but would make Delaware even more money if the state committed to policies that reduce nitrogen and phosphorus pollution in the bays to reduce.

Bason said he hopes this latest report will help tell that story and inspire further action.

This report also contains many more discoveries about the inland bays that might surprise even some of Delaware’s biggest anglers or nature lovers. Delaware Online/The News Journal summarized some of these highlights.

1. Inland Bays support $4.5 million and 35,000 jobs

The report found that more than $4.5 billion and 35,000 jobs can be traced to Delaware’s inland bays.

When calculating the economic activity related to the inland bays, the researchers focused on relevant industries, including water-related businesses such as shell fisheries or boat dealers; tourism and recreation, such as hotels and motels or sporting goods stores; and infrastructure and services ranging from grocery stores to real estate and healthcare.

Most of the contributions came from this latter category, meaning all that was needed to support the people who lived near the inland bays.

The study also looked at direct, indirect and induced contributions. To explain this, the authors used the example of a charter boat company.

The company’s direct contributions would include hiring staff to operate and operate the chartered fishing trips. If other companies provide them with oil and fuel or bait and tackle, that’s an indirect contribution. The induced contribution comes into play when charter boat employees use their earnings to purchase and maintain houses, purchase private vehicles, or buy groceries and clothing.

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These calculations do not even include tax revenue, including personal income, property and property transfer taxes levied on corporations. This revenue for federal, state and local governments has been estimated at $458 million.

2. Almost all of these activities take place in Sussex County

According to the report, 89% of the billions of dollars that the inland bays bring to the state remain in Sussex County.

An even larger proportion – 94% – of the jobs attributed to the inland bays are located in the county.

Perhaps not entirely shocking given the growing tourism industry in southern Delaware. The study cites research showing that Sussex County received 7.5 million visitors in 2019 and that tourism has become the state’s fourth largest employer.

A 2019 survey by the Delaware Department of Natural Resources and Environmental Control also found that 66% of households in East Sussex County are involved in fishing, 49% in canoeing or kayaking, 41% in motorboating, and 43% in bird or birdwatching take part in animal observation.

3. Better water quality can increase real estate value

The report makes it clear that the inland bays can support booming industries like construction while suffering the consequences of the same rapid development.

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Despite this complicated relationship, the study suggests that water quality can have direct benefits for real estate and property values.

For years, studies have indicated that waterfront properties increase in value as water quality improves. But a more recent study looking at the Chesapeake Bay Estuary showed that real estate values ​​rose when the water was clearer — based on how deep one can see into the water.

While Bason said the goal isn’t to increase the value of waterfront homes, this is another article that may help illustrate the core issue: Clearer water is not only better aesthetically for residents, it also helps bringing more sunlight and nutrients into these habitats and improving their overall health.

4. The industry that benefits most from the bays is…

Based on this report’s calculations, residential and non-residential construction topped the charts in terms of the Bays’ economic contributions.

This industry accounted for $674.5 million and nearly 4,200 jobs in 2020.

While the report’s authors expected high levels of economic activity around tourism-related businesses like boat trips or lodging — and the bays’ marina and boating economy still contributed $76 million — Bason said he was surprised by the rising contributions from construction .

The report also highlights how smaller but growing industries, like local oyster farming, would benefit greatly from clearer, healthier waters.

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