National Park Service ends comment period on road through the Great Smokies

Asheville – A cash settlement of $52 million paid by the federal government to settle its 63-year-old debt to Swain County, North Carolina, would yield far greater long-term economic benefits for the county than would building a $604 million road through the Great Smoky Mountains National Park, according to a new report released today by the Southern Environmental Law Center.

The report finds that the settlement would give the county much greater options to diversify its economy, now based primarily on low-paying, seasonal tourism jobs, secure the county’s financial well-being for the long term, and bring immediate benefits to county residents. On the other hand, according to the park service’s Draft Environmental Impact Statement (DEIS) released in January, the economic benefits of the proposed North Shore Road are largely tourism-related and won’t be realized for at least 15 years.

The Southern Environmental Law Center submitted the economic analysis as part of its official comments to the National Park Service on the proposed road on behalf of the National Parks and Conservation Association, the NC and TN chapters of Sierra Club, the Appalachian Trail Conservancy, the NC Council of Trout Unlimited, Western North Carolina Alliance, and the NC Wildlife Federation. The groups are part of a broader coalition of dozens of organizations opposing construction of a road through the wildest, most rugged and remote part of the Great Smoky Mountains National Park. Others supporting a financial settlement include Senators Bill Frist and Lamar Alexander of Tennessee, who sent letters to the Secretary of Interior in February, the Swain County Commission, and North Carolina Governor Mike Easley, who re-stated his years-long support for a settlement in a letter to the Secretary Thursday (April 6). The public comment period ends today.

“On the economics, the National Park Service clearly weighted its study in favor of building the road,” says SELC Staff Attorney DJ Gerken. “The National Park Service failed to fully and fairly analyze the impacts of a cash settlement on the economic future of Swain County. This report fills that void. We expect the agency to take a serious look at it and factor it into their final decision.”

Susan B. Kask, Ph.D., chair of the Warren Wilson College Department of Business and Economics, was the lead author on the report in collaboration with the school’s Environmental Leadership Center. The report finds that Swain County struggles more with underemployment than unemployment. In 2005, 35% of the private sector labor force worked in tourism-related jobs, with wages averaging just $16,000 annually. Further, much of the county lies in federal or Cherokee Nation ownership, leaving only 14% of the land base for taxation. With limited tax revenue, the county struggles to provide necessary infrastructure and services to its citizens; it is ranked as one of the poorest counties in the state.

The North Shore Road issue dates back to 1943, when the federal government agreed to build a new road for Swain County to replace one that was flooded when Fontana Lake was created by the Tennessee Valley Authority. Since the 1960s, however, the county has strongly preferred a cash settlement over a road, and currently is seeking a settlement in the amount of $52 million, which is roughly the cost of the flooded road, adjusted for inflation.

The report analyzes the economic impact on Swain County of a settlement based on the premise that the money would be invested, with part of the interest reinvested and part of it spent to address economic needs as determined by the county. Over time, the interest from $52 million could grow to an average of $3.5 million per year. Dr. Kask’s analysis projected that the settlement could result in 78 permanent jobs in Swain County in range of employment sectors. That’s compared to 110 permanent jobs* from the $604 million North Shore Road as projected by the DEIS, primarily the types of seasonal, low-paying tourism jobs now prevalent in the county. Dr. Kask also analyzed impacts of a $93 million settlement – which is derived from an alternative valuation of the original road and its benefits – and projected at least 123 permanent jobs.

The report notes that a primary benefit of a settlement would be the flexibility it would provide Swain County to address a variety of needs. Further, county residents would begin to see benefits almost immediately from a cash settlement in the form of increased salaries for teachers, police and emergency service personnel, and numerous projects including connecting to high-speed Internet, building a new justice center, making improvements to the schools, medical facilities, and water and sewer systems - all of which would help attract new business and expand existing ones and have been identified by the county as priorities. The money could also be used to reduce property tax rates.

“The settlement would give Swain County the flexibility to address a variety of short-term needs, while providing financial security for the future. It sets them up for life,” Dr. Kask says. “Building the road, on the other hand, would limit the county’s options, putting even more of their economic eggs into the tourism-industry basket. The first rule of economic development is diversify, diversify, diversify.”

The DEIS job numbers for building the North Shore Road include higher-paying construction jobs, which would likely be taken by workers from outside Swain County, says Gerken. Further, the DEIS anticipates the permanent, tourism jobs would not materialize until the road is finished, which the National Park Service says is at least 15 years out under the optimal circumstances.

While the agency acknowledges in the DEIS that a cash settlement would provide the county more flexibility, it makes the assumption that the county would quickly spend much of the money on small capital projects. The resulting number of permanent jobs is extremely low, compared to the inflated number of jobs associated with building the road, Gerken says.

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* The DEIS sites 224 permanent jobs from the full-build option; however, that number is based on a 2-county study area of Swain and Graham counties, and the potential traffic coming from both counties. For purposes of this comparison, SELC halved that number to keep the focus on Swain County.