Dr. Tom Smith
Publisher’s Note: We commissioned Dr. Tom Smith, an economist and professor in the Practice of Finance at the Emory University Goizueta Business School, to explain why Georgia should host an early 2024 presidential primary. He holds a PhD in economics from the University of Illinois at Chicago and is a specialist in the areas of labor economics, pricing, film finance, sports economics and finance, as well as the economics of the entertainment and health care industries. Smith is one of Goizueta Business School’s most sought-after experts.
INSIDERADVANTAGE: In what form does the economic benefit of an earlier presidential primary come? Does it impact working Georgians and small businesses, or just big corporations and the media?
SMITH: If Georgia becomes an early presidential state, precedent shows candidates will ramp up their campaigning here, in turn spending money on rents, transportation, food, supplies, rallies, and wages. These candidates will spend money in small communities and likely will buy goods and services from small and large companies alike. Candidates will make appearances in small towns and neighborhoods – cooking BBQ and holding rallies. Particularly, if the Republican presidential primary is held earlier in the calendar, Georgians across the state will see a significant increase in economic activity. All that makes a big impact across the board.
INSIDERADVANTAGE: Talk a little bit more about the tax revenue. How did you calculate that? Is it enough to actually impact a local budget?
SMITH: The tax revenue is based on local spending and the tax rates associated with the state and counties around the state. I used data from https://www.fec.gov/ to find historical spending by candidates in the first primary states, then extrapolated likely spending by candidate on various goods, such as rent, transportation, supplies, etc. I used those historic spending patterns and the likely location of this spending and then applied tax rates.
INSIDERADVANTAGE: You mention briefly at the end of your report that this economic impact will be spread out across major metros areas throughout the state. What do exurban counties or smaller rural counties stand to gain if anything at all?
SMITH: Unlike the Super Bowl or even Dragon-Con (where spending will be concentrated in Fulton County, and other Atlanta-specific areas), spending by candidates campaigning in communities across the entire state is going to be spread out over Georgia. Smaller counties have an opportunity to gain. Much of the public conversation surrounding the potential move to an early date has centered around the Democratic primary, but I think that misses the totality of the potential economic benefit to the entire state, because we’re talking about both parties moving their primaries.
This truly becomes an economic difference maker for the entire state due to where Republican candidates are most likely to spend resources. Republican voters don’t just live in the metro Atlanta region so Republican campaigns are going to spend time and money to reach voters where they are.
INSIDERADVANTAGE: You mention businesses that will receive direct spending from early primary campaigning, like hotels and restaurants. Is there any upside for the many Georgia industries that wouldn’t see any direct spending?
SMITH: An increase in economic activity is likely to impact all types of sectors across the state. Remember, from an economic perspective, a rising tide lifts all ships. Even if an industry isn’t the recipient of direct dollars, there will be more economic activity across the state, which will likely have positive impacts on industry at-large across the state.
INSIDERADVANTAGE: Is the economic impact of an early primary sustainable? Would it just amount to a short boom or is there potential for longer-term benefit?
SMITH: I wouldn’t categorize it as a boom. There will be more spending during the entire primary season every four years, which is likely to increase the state’s prominence as a destination for presidential candidates on a regular basis. Remember, we have presidential candidates right now holding rallies and events in New Hampshire and Iowa. These early primary states provide opportunities for the candidates to meet important voters and hear about the economic issues
that are most important to the state. These candidates will start spending time and money in these early states many months ahead of the primary. We will see what kind of a long-run benefit this will provide. I am confident that this will create more total economic activity.
