In the meantime, the devastation is extensive: the damage in Mississippi alone has been estimated at between $30 and $50 billion. Two months after the storm, much of the coast remains buried trader a mountain of rubble. A profound lack of housing persists and schools are meeting in tents. Mississippi Power estimates that nearly 20,000 of their customers are still unable to take power because the building is gone or so severely damaged that restoring power would be dangerous.
Economic recovery spurred by rebuilding efforts
Looking at the longer-term economic effects of the storm, the outlook becomes much more promising. The billions of dollars required to rebuild the area will generate significant economic activity and may well set the stage for a complete revitalization of the Mississippi Gulf Coast. This is the hope of Governor Haley Barbour and the newly formed "Commission on Recovery, Rebuilding and Renewal" charged with the task of bringing a renaissance to the coast. If this plan is successful, Hurricane Katrina may act as a catalyst for an economic boom on the coast and in the state as a whole.
Despite the economic downturn immediately following the storm, it is becoming increasingly clear that the decline is likely to be small relative to the growth sparked by rebuilding. Though the latest employment figures show a five percent decline in the total number of people employed in the state, tax collections exceeded the pre-Katrina estimate during the two months following the hurricane.
Strong tax collections are a result of the refugees from New Orleans and the coast dispersed throughout the state who are spending money for rooms, food, clothes and other items--money they would not spend if Katrina had not occurred. Additionally, many people have already begun to rebuild and that activity is also generating increased sales tax. As the rebuilding progresses, the state can expect to see a robust rebound of economic activity.
Coastal economy key to state's recovery
Central to the economic rebound will be the revitalization of the Coast, which suffered the worst storm damage. The three coastal counties make up roughly 14 percent of the state's economy. They rely heavily on tourism, with 20 percent of the workforce directly or indirectly involved in the industry.
Since the mid-1990s, gaming has been the centerpiece for coastal tourism. Before Katrina 12 casinos operated on the coast and another was scheduled to open soon. All 13 suffered significant damage. Obviously, the closing of the coastal tourism industry results in a loss to the state's coffers. Though the state is losing sales tax from the tourism dollars, losses from gaming taxes and fees are even greater.
Before Katrina the coastal casinos were generating roughly $8 million per month for the state through gaming fees and taxes alone. Closure of the coastal casinos will cost the state most but not all of this revenue. Some gambling activity will move to the 17 casinos in River …