Government & Politics

Iowa reaps a windfall from caucuses, but it’s not measured in dollars

Sen. Bernie Sanders of Vermont, a Democratic candidate for president, spoke to a packed house last week at the Santa Maria Winery in Carroll, Iowa. Economist Dave Swenson of Iowa State University found that a half-year of campaigning adds about $11 million to Iowa’s gross domestic product, and it vanishes in three of the four years of a presidential election cycle. But Iowans say the benefits that the quadrennial first-in-the-nation caucuses bring to the state are more intangible.
Sen. Bernie Sanders of Vermont, a Democratic candidate for president, spoke to a packed house last week at the Santa Maria Winery in Carroll, Iowa. Economist Dave Swenson of Iowa State University found that a half-year of campaigning adds about $11 million to Iowa’s gross domestic product, and it vanishes in three of the four years of a presidential election cycle. But Iowans say the benefits that the quadrennial first-in-the-nation caucuses bring to the state are more intangible. Carroll Daily Times Herald

Say again. You’re political tourists?

That’s right, said Leonard Williams, a political science professor at Manchester University in Indiana. He and 11 visiting students recently dominated a conference room where the public was invited to meet former U.S. Sen. Rick Santorum, who is way back in the pack of Republican presidential contenders.

“Political tourism” indeed is one byproduct of Iowa’s first-in-the-nation presidential caucuses, or so says the state travel office. But nobody has a strong handle on the economic impact of college kids earning a few credits zig-zagging the countryside to witness stumping up close.

For all the media hype these caucuses command, experts say the financial benefits to Iowa are tough to track. The word “windfall” is bandied about. Yet the term doesn’t apply very well to what the caucus economy puts into the pockets of average Iowans, an amount that some contend is a pittance.

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The industry’s real windfalls are intangible, caucus fans say.

For example, they ask: Should Iowans ever lose the privilege of first dibs at picking a president, what would distinguish them from, say, Idahoans?

“I’ve seen Iowa described as a Disneyland for political junkies,” said Williams, whose students paid $1,800 each to spend a cold week attending events leading to the Feb. 1 caucuses. “By the time we are finished, we will have traveled to Des Moines, Urbandale, Johnston, Dubuque, Perry, Le Mars, Cedar Falls and Fort Dodge.

“Those of us in Indiana rarely have the opportunity to get close and ask questions of presidential candidates.”

That’s no small thing for the Hawkeye State to tout. Perhaps the caucuses’ biggest payoff is “all about the state’s image,” said economist Dave Swenson at Iowa State University in Ames.

But as for cashing in, Iowa as a whole reaps more rewards from a one-day jump in corn prices, he said.

Swenson said that beyond the January crush for hotel rooms and restaurant tables in Des Moines, “the idea of some massive economic impact is just bogus.”

How could that be when we know that presidential campaigns spend tens of millions of dollars?

The candidates’ financial filings reveal that little of the money goes to Iowa companies. East Coast consultants score big. And mostly far-flung broadcasting conglomerates enjoy profits from ad buys.

Swenson tried putting numbers to a sector of the caucus economy by analyzing overall campaign spending in the final half of 2007, as both political parties revved up for the January 2008 contests.

He concluded that a half-year of campaigning added about $11 million to Iowa’s gross domestic product. That’s less than 1/100th  of 1 percent of the state’s gross domestic product, and it vanishes in three of the four years of a presidential election cycle.

“There is no meaningful economic afterglow” once the caucuses conclude, Swenson said. The revenue stream “goes dormant like a cicada.”

Jobs? Swenson calculated 229 full-time equivalents, not counting unknown numbers of campaign workers who temporarily settle in Iowa.

He acknowledged these estimates were based on campaign spending reports, not on the hard-to-gauge activities of more than 2,500 media representatives who cram into Iowa as the caucuses near.

The capital of Des Moines and its suburbs relish those visitors, who will pay $400 or more nightly for lodging. Some downtown hotels reportedly charge $900 for a stay, though rooms are readily available 30 miles outside the city.

“This time of year, hotel occupancy here historically is about 60 percent” of 11,000 rooms, said Greg Edwards, the president and chief executive of the Greater Des Moines Convention and Visitors Bureau. “During the caucuses, we’ll hit 88 to 90 percent occupancy.”

Business tends to be as usual, however, in the hotels in Iowa City, 120 miles east.

“In places like Iowa City, it’s a little tricky figuring out when media are visiting and what they’re spending,” said Laurie Haman of the Iowa City/Coralville Area Convention & Visitors Bureau.

Savvy establishments do their best to reel in roaming reporters.

CNN has featured Iowa City’s Hamburg Inn and its Coffee Bean Caucus, in which beans represent customers’ votes for candidates.

“You can’t put a dollar amount on media attention,” Haman said.

Call center

Between Iowa City and Des Moines, off Interstate 80, is Brooklyn, population 1,500.

It’s home to a call center that polls Americans on issues that are important to political conservatives. The company, Campaign HQ, last year received more than $1 million to conduct polling for the presidential bid of Sen. Ted Cruz, a Texas Republican.

You might think a monetary infusion equal to about $700 per Brooklynite would be noticeable around town. “I’m afraid not,” said Louise Van Ersvelde, the executive director of the Brooklyn Economic Development Group.

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Louise Van Ersvelde said the local eateries seem no busier serving Campaign HQ staffers. The company has been around several years but added callers in 2015, with wages starting at $9.50 an hour.

“Maybe they don’t have long enough breaks” to lunch outside the office, Van Ersvelde said.

Except for the people who poll for a living, “most Iowans don’t make money off opinion research,” said Steve Grubbs, a former Iowa GOP chairman who is a campaign strategist for Republican presidential candidate Rand Paul, a senator from Kentucky.

“Iowans understand that the state gets some collaborative economic benefit … but a lot of this campaign money goes to out-of-state firms,” Grubbs said. “Nobody really cares about that.”

What Iowans do care about is hogging that national spotlight every fourth winter, for reasons more intangible than economic. They take pride in being deliberate and discerning about sizing up the political field, and few question Iowans’ insistence that they wait until the final days to arrive at their picks.

“For us, it’s not about economic impact,” said Joseph Jones of the Greater Des Moines Partnership, an economic development group. “We know we’re not the first to caucus because we’re special. We’re special because we’re the first.

“We take that responsibility very seriously.”

Most times. This week, a Des Moines comedy troupe begins an 11-day staging of “Caucus! The Musical.” Tickets start at $30.

Ho-hum cold cuts

The products that move the most through this caucus economy are nowhere near as showy as “Caucus! The Musical.”

They are the ho-hum vegetable trays and cold cuts ordered from caterers. They are the rented cars and the fuel that runs them.

At Casey’s General Stores throughout Iowa, presidential campaigns dropped a combined $37,600 last summer — mostly on gasoline to keep staffers traveling, the Des Moines Register reported.

Casey’s doesn’t profit much off fuel, said Brian Johnson, the vice president of finance for the Ankeny, Iowa-based chain.


But the windfall is huge if hungry and thirsty campaign workers also are buying treats that they don’t bother to write off, as Johnson suspects.

“These guys are driving around and grabbing their dinner on the run,” Johnson said. “They’re getting doughnuts, fountain soda and coffee. … That’s really important for us.”

Despite the wet towel some economists throw on the caucus business, “there’s no doubt it’s a boon for the whole state,” Johnson said.

The Pizza Ranch concurs.

Seventy-seven locations of the chain, headquartered in Orange City, dot the state. Each is designed with a community room that is free to be used for local meetings.

Sprinkle in the company’s vision statement — “To glorify God by positively impacting the world” — and many candidates can’t resist staging rallies at a Pizza Ranch, especially if they are courting evangelical voters.

“We don’t do anything to solicit or attract candidates. They come to us,” Republican and Democrat, said Cody Pierce, a company vice president. The caucuses are “certainly a brand-builder,” he said.

But a gold mine? The chain rang up all of $831 in combined candidate spending through the third quarter of 2015, the Register reported.

Except for what the campaigns pour into media ads — a total of $9.4 million just in the final month — around Iowa the candidates and their aides are known more for being stingy with money, not extravagant.

Three Drake University students chose the Des Moines school partly because of the appeal of the Iowa caucuses and their access to presidential candidates.

Choosing Iowa

Drake University students who comprise the Des Moines school’s “Iowa Caucus Project” see some big benefits to the state that economists may overlook when debating the caucuses’ importance.

“It’s a big part of the reason I chose Drake,” said Haley Barbour, a junior from the Kansas City area who is majoring in politics and international relations.

Fellow students Skylar Borchardt from Minnesota and Zachary Blevins from Illinois say the same: If you want to build a career in politics, an Iowa education not only keeps you occupied, but it may also give you a leg up in your job search.

Many of Blevins’ friends who share his love for politics chose the Washington, D.C., area to attend college. “There, they might see one presidential candidate in person, if any,” said Blevins. “Here, we can see one every day.”

Being part of the Iowa Caucus Project allows the three students and nearly a dozen others at Drake to check out rallies, explore policy positions and post their own blogs.

But more importantly for the state, Barbour, Borchardt and Blevins are now Iowans paying sales taxes, spending on housing and food and clothes. Tuition and fees, before financial aid, for the average Drake student total $43,292 per year.

Economist Swenson cited other potential caucus-related windfalls. For example, he says Iowa’s mammoth ethanol industry may have dried up without presidential aspirants making promises every four years to maintain federal subsidies for the fuel.

So let Iowans and their guests toast at Des Moines’ Court Avenue Restaurant and Brewery, where they cast lots for the candidates using wooden poker chips. (At last check, Hillary Clinton led the Democrats; Sen. Marco Rubio of Florida had pulled ahead of Republicans.)

Bartender? Another round of the Caucus Ale, please.

Rick Montgomery: 816-234-4410, @rmontgomery_r