Delaware’s inland bays contribute to state’s economy


REHOBOTH BEACH, DEL. — The proud reflection of a sunset on the bay. The misty sea breeze that rushes past while boating through the inlet. The regal flight of a heron across the verdant marsh.

For many, experiencing Delaware’s inland bays can be priceless.

But that doesn’t mean these natural wonders are without real economic value either. From tourism-based industries like recreation and accommodations to construction and real estate, the bays contribute billions of dollars to the state − and that is not an exaggeration.

According to a recent report from the Delaware Center for the Inland Bays and Delaware Sea Grant College Program, the inland bays – which include the 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 their steadfast argument: Delaware’s inland bays are worth the financial investment.

“It just proves that it is a really good investment to protect and restore the water quality of the inland bays, and what we need to be doing most right now, which ties in with this report, is protecting open space,” Bason said. “We need to be protecting forests and wetlands before they are developed.”

That’s because forests and wetlands are key in filtering out pollution that has been threatening the bays for years, he explained. While Sussex County and the state have made significant strides in preserving land, Bason said there is a lot of work ahead – specifically, work that needs buy-in from state and local policymakers.

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

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

Within this report, too, are many more discoveries about the inland bays that may surprise even some of Delaware’s biggest anglers or nature-lovers. Delaware Online/The News Journal rounded up a few of those highlights.

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

The report determined that more than $4.5 billion and 35,000 jobs can be traced back 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 like shellfish fishing or boat dealers; tourism and recreation, like hotels and motels or sporting goods stores; and infrastructure and services ranging from grocery stores to real estate and health care.

Most of the contributions came from this latter category, which meant anything 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 business.

The business’ direct contributions would include hiring staff to operate and run the chartered fishing trips. When other businesses supply them with oil and fuel or bait and tackle, that’s an indirect contribution. The induced contribution comes into play when the charter boat employees use their earnings to buy and maintain houses, purchase personal vehicles or food and clothing.

These calculations don’t even include tax revenue, including those levied on businesses, personal income, property and real estate transfer taxes. This revenue to federal, state and county governments was estimated at $458 million.

2. Almost all of this activity is happening in Sussex County

Of the billions of dollars that the inland bays contribute to the state, 89% of that stays within Sussex County, according to the report.

An even greater portion − 94% − of the jobs attributed to the inland bays are within the county.

This may not be entirely shocking considering the growing tourism industry in southern Delaware. The study cites research that 7.5 million visitors came to Sussex County in 2019, and tourism has become the fourth largest employer in the state.

A 2019 Delaware Department of Natural Resources and Environmental Control survey further found that 66% of eastern Sussex County households participate in fishing, 49% canoe or kayak, 41% powerboat, and 43% participate in bird watching or wildlife viewing.

3. Better water quality can increase property values

The report clearly outlines that the inland bays can support booming industries like construction while also suffering the consequences of that same rapid development.

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

For years, studies have pointed out that waterfront properties increase in value when the water quality is improved. But a more recent study looking at the Chesapeake Bay estuary showed that when the water was clearer – based on how deep someone can look into the water – the property value increased.

While Bason said the goal is not to increase the values ​​of waterfront homes, this is another piece that can help visualize the core issue: Clearer water is not just aesthetically better for residents, it helps bring in more sunlight and nutrients to these habitats, 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 led the charts in terms of economic contributions from the bays.

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

While the report’s authors expected to see high economic activity around tourism-related businesses like boating or accommodations – and the bays’ marina and boating economy still contributed $76 million – Bason said he was surprised by the soaring contributions from construction.

The report also highlights how smaller but growing industries, such as local oyster production, would greatly benefit from clearer and healthier waters.

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