Lakes Generate Important Economic Activity

Lake use pumps more than $1.8 billion into the State’s economy each year and recreational uses account for 60% of this. Local communities benefit highly, since at least 54 % of these recreation dollars are spent in towns which border the lakes people visit. Total spending for recreation and other activities amounts to $300-600 per lake acre each year. For example, on four central Maine lakes, the total local economic activity was more than $1 million and 116 jobs were supported. Lakes support over 52,000 jobs statewide.

Indirect Economic Value

As money is spent and re-spent within the economy, additional income and jobs for Maine residents are supported. For example, the $1.1 billion in direct expenditures for recreation results in an additional $629 million of economic activity due to this "multiplier effect". The total economic activity surrounding Maine lakes ($2.8 billion) leads to over $1.2 billion in annual income for Maine residents and supports over 50,000 jobs. Of these, about 8,000 (roughly equal to the State's largest private employer, Bath Iron Works) are generated as a result of money brought into the state by nonresidents.

Net Economic Value

In addition to the direct and indirect effects on Maine's economy, the total net economic value of Maine's Great Ponds is at least $6.7 billion dollars annually.

Total Net Economic Values Associated with Uses of Maine's Great Ponds (July 1996 dollars).

Eutrophication of Maine's lakes, the primary cause of diminished water clarity and the major threat to Maine's lakes, reduces the desirability of Great Ponds for all recreation activities. There are at least 189 lakes that have compromised water quality due to eutrophication. This is reflected by lower net economic values, lower use rates, and decreased direct and indirect sales. A simulation was conducted to investigate how a reduction in eutrophication would enhance net economic values and use rates, with consequent increases in expenditures and total economic impacts. The effects were computed from existing studies that have investigated the effect of lake eutrophication on net economic values.

Improvement of lakes with poor water clarity to the average summer minimum of unimpacted lakes would lead to an increase in net economic value over the current situation. The improvement in water clarity would be expected to increase recreation use rates by up to 13 percent (1.6 million user days) over the current estimate. Swimming and open-water fishing account for over 75 percent of the additional days of use. Reducing eutrophication would also increase direct expenditures by $107 million. Twenty-three percent ($24.7 million) of the increase in direct expenditures would be attributable to nonresidents (new money entering Maine's economy) of which $7 million (28 percent) are property taxes paid by nonresidents.

Perhaps more important is the reality that wholesale degradation of water quality is more likely than improvements. Because the relative effects of degrading water quality are greater than for improvement, we expect that failure to protect Maine's lakes will result in even greater losses than the figures cited above. Thus, state and community actions to protect water quality can have a significant pay off by maintaining and enhancing future tax revenues, employment and enjoyment of Maine's lakes. This is a core issue for the future of Maine's quality of life.

Appendix Information:  Supporting Tables

Direct Expenditures for Recreation Uses of Maine's Great Ponds

Direct Expenditures for Other Uses of Maine's Great Ponds