Overview

Kane County is located in south-central Utah, along the Utah/Arizona border. Kane County has a strong tourism and recreation industry, which continues to be a major source of revenue and employment. Kanab, the largest city in the county, is a local-hub for many of the surrounding national and state parks. The county has been experiencing a large rise in tourism as the national parks in Utah continue to grow in popularity. Kane has a large share of federally-owned land, which is an important source of revenue by way of Payments in Lieu of Taxes (PILT). Many rural counties in Utah and the West, are characterized by less diversified economies, which subjects them to greater economic swings. In order to improve the economic environment, Kane County should identify opportunities to expand economic exports and diversify the economy. A bright spot for Kane has been the low unemployment rate, which has consistently outperformed national averages over the past 10 years.

Kane County, Utah

5.1% +

4.0% - 5.0%

0.0% - 3.9%

UTAH UNEMPLOYMENT RATE BY COUNTY2016 Annual Average

Source: Bureau of Labor StatisticsNote: Not Seasonally Adjusted

RISE OF THE MIGHTY 51980 - 2016, Visitors

Source: National Park Service

Source: United States Department of the Interior

KANE COUNTY HISTORICAL PILT PAYMENTS1999 - 2016

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KANE COUNTY ESTIMATED POPULATION GROWTH2010 - 2060 Population

Population:

As of 2016, Kane County had a population of 7,334, with approximately 4,400 located in the county seat of Kanab. The county grew steadily from 1970 to 2010. Since 2010, the county’s growth has slowed substantially and only registered at 1 percent from 2010-2015. Kane County has an older population than the Utah average, with a median age of 43.6 vs. 30.1 for the state. This age gap can be seen in the county’s large share of individuals over the age of 65, at 20 percent versus 10 percent for the state, and its smaller share in the 15-17 year age group and the 18-24 year age group.

KANE COUNTY AND KANAB POPULATION GROWTH1890 - 2015 Population Growth

Source: Utah Governor’s Office of Management and BudgetNote: *estimated

Going Forward:

Kane County’s population is projected to double over the next 50 years, increasing from approximately 8,000 in 2020, to nearly 19,000 by 2060. This includes the continued growth of Kanab from 5,050 in 2020, to around 11,000 by 2060. Kanab will continue have the greatest share of Kane County’s population, at around 60 percent. As more retirees and second-home purchasers move in, the county could see a continued trend of an aging population.

KANE COUNTY AND UTAH AGE SEGMENTS2015, Percent of Population by Age

Source: US Census Bureau, American Community Survey 5-Year Estimates

Source: Kem C. Gardner Analysis of Census Data

KaneCountyHistoricalPopulation

KaneCounty StateofUtah UnitedStates1900 1,811 276,749 76,212,168 1910 1,652 373,351 92,228,496 1920 2,054 449,396 106,021,537 1930 2,235 507,847 123,202,624 1940 2,561 550,310 132,164,569 1950 2,299 688,862 151,325,798 1960 2,667 890,627 179,323,175 1970 2,421 1,059,273 203,211,926 1980 4,024 1,461,037 226,545,805 1990 5,169 1,722,850 248,709,873 2000 6,046 2,233,169 281,421,906 2010 7,125 2,763,885 308,754,538 2016 7,334 3,051,217 323,127,513

KANE COUNTY HISTORICAL POPULATION1890 - 2016 Population

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Source: US Census Bureau

KANE COUNTY TOTAL EMPLOYMENT 2001 - 2015

KANE AND UTAH INDUSTRY EMPLOYMENT GROWTH2010 - 2030 Industry Projections

Percent Growth

Source: Utah Governor’s Office of Management and Budget 2012 Baseline Projections

Source: Bureau of Labor Statistics

Source: Zions Bank Analysis of US Census Bureau, American Community Survey 5-Year Estimates

KANE COUNTY EMPLOYMENT BY INDUSTRY2015, Industry Share

Source: Zions Bank Analysis of Bureau of Labor Statistics Quarterly Wage Data* Construction Data not Available for Kane County

US, UTAH, KANE WAGES BY INDUSTRY2016, Average Private Wages

Employment:

Kane County has approximately 3,300 employees across all sectors of the economy. The county has seen a renewed growth in employ-ment since 2012 and this trend is expected to continue. Kane’s employment growth experienced greater swings in the past 15 years than either the United States or Utah, but that is not unusual for areas with smaller populations and employment bases. The major employ-ment sectors in Kane are Trade, Transportation and Utilities, with a 19 percent share of total employees; Education and Health, with an 18 percent share; and Leisure and Hospitality, with a 15 percent share. The average private wage in Kane County is $29,952, which compares to $44,252 in the state of Utah, and $54,496 in the United States.

Going Forward:

Kane County is projected to see large employment gains in the Construction sector, as well as the Education and Health sector, and the Professional and Business Services sector. Farm employment in both Utah and Kane County is expected to contract over the next few decades, as farm efficiency continues to increase.

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The Tourism Economy:

The proximity of national and state parks in and around Kane County make it a prime destination for outdoor recreation enthusiasts. The Leisure and Hospitality sector plays a predominate role supporting the tourism industry, and employs approximately 43.5 percent of the private workforce. The sector generated over $25 million in private wages, and a 35 percent share of Kane County total private wages in 2015. The sector’s taxable sales have climbed steadily since 2005 and surpassed all other industries combined starting in 2014.

KANE COUNTY PRIVATE LEISURE AND HOSPITALITY EMPLOYMENT AND TOTAL PRIVATE EMPLOYMENT2012 - 2015

Source: Bureau of Labor Statistics

Going Forward:

The growing popularity of outdoor recreation should continue to present strong opportunities for Kane County. Since the start of the Mighty 5 advertising campaign in the spring of 2013, all of the National Parks in Utah have seen double-digit growth. The total number of visitors has continued to climb, with Zion National Park seeing recreation visits growing more than 30 percent from 2015 to 2016. Utah’s National Park visitation has grown so dramatically that it surpasses the growth of the five largest national parks in the United States combined, including Great Smoky Mountain, Grand Canyon, Yosemite, Rocky Mountain and Yellowstone. This substantial rise in visitors shows no sign of slowing and should continue for the foreseeable future.

KANE COUNTY LEISURE AND HOSPITALITY WAGES2013 - 2015

Source: Bureau of Labor Statistics

KANE LEISURE AND HOSPITALITY TAXABLE SALES1998 - 2016, In Millions

43.0%43.5%43.6% 43.0%

Source: National Park Service

THE MIGHTY 5 VS THE REST2013 - 2015, Percent Change

Source: National Park Service

THE MIGHTY 5 DOUBLE-DIGIT GROWTH2015 - 2016, Visitors

Source: Utah State Tax Commission

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Payments in Lieu of Taxes (PILT)

Overview:

Payments in Lieu of Taxes (PILT) payments are a vital source of funding for many counties in Utah and the Western United States. PILT payments are necessary to help offset the lost property tax revenue from federal land ownership within a county. Local governments then use this funding to pay for important community services, such as law enforcement, fire fighting, public school construction and road building. The loss of these payments could restrict local governments’ ability to provide public services.

Going Forward:

PILT payments will continue to be an important source of funding for local governments with large shares of federally-owned land within their borders. The importance of these payments cannot be overstated and are often a main source of funding for vital public services. There have been many attempts to develop with a long-term solution to fully-fund the PILT program, but these attempts have struggled in Congress. Without mandatory full-funding from the federal government, PILT will remain a bargaining chip in the annual appropriations process and its future will remain uncertain.

PILT in Utah and Kane County:

Utah is the second largest recipient of PILT funding in the nation, after California. In fiscal year 2016, Utah received $38,362,447 in payments or 8.5 percent of all PILT payments for the United States. These payments are based on the number of acres under federal ownership, and other factors, such as population and receipt sharing programs. Within Kane County the federal government controls approximately 3 million acres of land, and the county received $1,079,562 in PILT payments for fiscal year 2016. While Kane County has the 4th highest share of federal land in Utah, it ranks 18th in terms of overall PILT payments. This is due in large part to the county’s small population.

PILT PAYMENTS BY STATEFiscal Year 2016 PILT Payments

FEDERAL LAND BY SHARE IN KANE COUNTY2016 Agency Ownership Share

FEDERAL LAND OWNERSHIP IN SOUTHERN UTAH2016 Land Ownership and Payments

Source: United States Department of the Interior

Source: United States Department of the Interior Source: United States Department of the Interior

FEDERAL LAND OWNERSHIP BY STATE

Source: U.S General Services Administration

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HOUSING MAKEUP2015, Percentage of housing units

KANE COUNTY TOTAL HOUSING UNITS2015

Source: US Census Bureau, American Community Survey 5-Year Estimates

Source: US Census Bureau, American Community Survey 5-Year Estimates

Source: US Census Bureau, American Community Survey 5-Year Estimates

HOUSING VACANCY RATES2015, Percent of Total Housing

MEDIAN HOME VALUE2010 - 2015

Housing:

Total housing units in Kane County were approximately 5,800 in 2015. The county experienced a large increase in housing from 2000 - 2010, but the growth has leveled since then. At around 85 percent, Kane County has a much larger share of single unit homes than the state of Utah or the United States, and a much smaller share of multi-unit homes. The very low supply of multi-unit housing in Kane County creates a financial strain on Leisure and Hospitality workers looking for afford-able housing. This impacts the ability of the industry to grow and suppresses overall economic growth. The median home value in Kane sits around $175,300, versus $178,000 for the United States, and $215,900 for Utah.

Kane county’s unique housing characteristics are illustrated by its housing vacancy rates compared to the state of Utah. While Utah’s vacancy rate is around 10 percent, Kane’s is 52 percent. This is due to the large amount of second homes and rental properties in the county.

Sources: Kem C. Gardner Analysis of Census Data and US

Census Bureau, American Community Survey 5-Year Estimates

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KaneCounty StateofUtah UnitedStatesPopulationPopulationestimates,July1,2016 7,334 3,051,217 323,127,513Populationestimates,July1,2015 7,131 2,995,919 321,418,820Populationestimatesbase,April1,2010 7,125 2,763,888 308,758,105Populationestimatesbase,April1,2010 7,125 2,763,888 308,758,105Population,percentchange-April1,2010toJuly1,2016 2.9% 10.4% 4.7%Population,percentchange-April1,2010toJuly1,2015 0.1% 8.4% 4.1%Population,Census,April1,2010 7,125 2,763,885 308,745,538

AgeandSexPersonsunder5years,percent,July1,2015 5.6% 8.4% 6.2%Personsunder5years,percent,April1,2010 7.0% 9.5% 6.5%Personsunder18years,percent,July1,2015 22.5% 30.5% 22.9%Personsunder18years,percent,April1,2010 24.3% 31.5% 24.0%Persons65yearsandover,percent,July1,2015 22.3% 10.3% 14.9%Persons65yearsandover,percent,April1,2010 19.5% 9.0% 13.0%Femalepersons,percent,July1,2015 49.6% 49.7% 50.8%Femalepersons,percent,April1,2010 50.6% 49.8% 50.8%

RaceandHispanicOriginWhitealone,percent,July1,2015 95.7% 91.2% 77.1%Whitealone,percent,April1,2010 95.7% 86.1% 72.4%BlackorAfricanAmericanalone,percent,July1,2015 0.5% 1.3% 13.3%BlackorAfricanAmericanalone,percent,April1,2010 0.2% 1.1% 12.6%AmericanIndianandAlaskaNativealone,percent,July1,2015 1.8% 1.5% 1.2%AmericanIndianandAlaskaNativealone,percent,April1,2010 1.5% 1.2% 0.9%Asianalone,percent,July1,2015 0.6% 2.5% 5.6%Asianalone,percent,April1,2010 0.4% 2.0% 4.8%NativeHawaiianandOtherPacificIslanderalone,percent,July1,2015 0.1% 1.0% 0.2%NativeHawaiianandOtherPacificIslanderalone,percent,April1,2010 NA 0.9% 0.2%TwoorMoreRaces,percent,July1,2015 1.4% 2.4% 2.6%TwoorMoreRaces,percent,April1,2010 1.3% 2.7% 2.9%HispanicorLatino,percent,July1,2015 4.5% 13.7% 17.6%HispanicorLatino,percent,April1,2010 3.7% 13.0% 16.3%Whitealone,notHispanicorLatino,percent,July1,2015 91.5% 79.0% 61.6%Whitealone,notHispanicorLatino,percent,April1,2010 93.2% 80.4% 63.7%

PopulationCharacteristicsVeterans,2011-2015 704 134,332 20,108,332Foreignbornpersons,percent,2011-2015 2.4% 8.4% 13.2%

HousingHousingunits,July1,2015 5,867 1,038,003 134,789,944Housingunits,April1,2010 5,815 979,709 131,704,730Owner-occupiedhousingunitrate,2011-2015 79.6% 69.5% 63.9%Medianvalueofowner-occupiedhousingunits,2011-2015 $175,300 $215,900 $178,600Medianselectedmonthlyownercosts-withamortgage,2011-2015 $1,108 $1,428 $1,492Medianselectedmonthlyownercosts-withoutamortgage,2011-2015 $304 $388 $458Mediangrossrent,2011-2015 $858 $887 $928Buildingpermits,2015 9 18,297 1,182,582

FamiliesandLivingArrangementsHouseholds,2011-2015 2,789 906,292 116,926,305Personsperhousehold,2011-2015 2.55 3.15 2.64Livinginsamehouse1yearago,percentofpersonsage1year+,2011-2015 82.3% 82.9% 85.1%LanguageotherthanEnglishspokenathome,percentofpersonsage5years+,2011-2015 3.7% 14.7% 21.0%

EducationHighschoolgraduateorhigher,percentofpersonsage25years+,2011-2015 95.3% 91.2% 86.7%Bachelor'sdegreeorhigher,percentofpersonsage25years+,2011-2015 24.8% 31.1% 29.8%

DEMOGRAPHIC AND ECONOMIC OVERVIEW

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HealthWithadisability,underage65years,percent,2011-2015 8.5% 6.6% 8.6%Personswithouthealthinsurance,underage65years,percent 10.1% 11.5% 10.5%

EconomyIncivilianlaborforce,total,percentofpopulationage16years+,2011-2015 59.9% 67.7% 63.3%Incivilianlaborforce,female,percentofpopulationage16years+,2011-2015 60.4% 59.5% 58.5%Totalaccommodationandfoodservicessales,2012($1,000) $47,940 $4,789,281 $708,138,598Totalhealthcareandsocialassistancereceipts/revenue,2012($1,000) $18,348 $14,521,857 $2,040,441,203Totalmanufacturersshipments,2012($1,000) D $50,046,429 $5,696,729,632Totalmerchantwholesalersales,2012($1,000) $1,294 $30,927,885 $5,208,023,478Totalretailsales,2012($1,000) $77,065 $38,024,486 $4,219,821,871Totalretailsalespercapita,2012 $10,672 $13,317 $13,443

TransportationMeantraveltimetowork(minutes),workersage16years+,2011-2015 13.1 21.6 25.9

IncomeandPovertyMedianhouseholdincome(in2015dollars),2011-2015 $50,194 $60,727 $53,889Percapitaincomeinpast12months(in2015dollars),2011-2015 $24,729 $24,686 $28,930Personsinpoverty,percent 11.3% 11.3% 13.5%

BusinessesTotalemployerestablishments,2015 253 75,463 7,663,938Totalemployment,2015 2,366 1,203,954 124,085,947Totalannualpayroll,2015($1,000) $74,444 $51,453,266 $6,253,488,252Totalemployment,percentchange,2014-2015 8.2% 4.9% 2.5%Totalnonemployerestablishments,2014 678 209,643 23,836,937Allfirms,2012 968 251,419 27,626,360Men-ownedfirms,2012 625 132,163 14,844,597Women-ownedfirms,2012 214 76,269 9,878,397Minority-ownedfirms,2012 56 24,423 7,952,386Nonminority-ownedfirms,2012 897 218,826 18,987,918Veteran-ownedfirms,2012 130 18,754 2,521,682Nonveteran-ownedfirms,2012 818 219,807 24,070,685

GeographyPopulationpersquaremile,2010 1.8 33.6 87.4Landareainsquaremiles,2010 3,990.23 82,169.62 3,531,905.43

Source:USCensusBureau

ROBERT SPENDLOVEEconomic and Public Policy Officer

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robert.spendlove@zionsbank.com (801) 560-5394

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