THE GUV’$ GU$HING WDC XX GA$ FUND

Table 1 shows 40,000 cruisers burning 160,000 gals of gas yearly from 2009 to ’14 (See Table 1). Since Chevrolet is WDC XX’s “presenting sponsor”, we shall present a hypothetical that is based on GM’s “best in the city” mpg vehicle, the Volt (35mpg). If all 40,000 cruise cars were Volts instead of fuming 160,000 gals at $580,800 they would vaporize ONLY 54,857 gals at $192,000 (33.71% of this yr’s expected WDC gas burn).

Dear Guv,

We hope that you are coping with the roller coasters that are US gas prices, DETROIT’s BANKRUPTCY, its renaissance and our slowly growing economy. The continuing increase of auto sales and the Big 3’s recent market share growth must be smilers. For the 4th consecutive yr, GM’s top selling brand, Chevrolet is the WDC’s “presenting sponsor”. The Woodward Dream Cruise will pump $4.75M (considering 1½ M observers & 160,000 gals) into the state’s tax coffers. WOW! (Pls See T-2). How about a big smile on that one Guv? This will result b/c there will likely be 1½ M± observers seeing 40,000+ cars traveling a total of 1.92M miles from 8 Mile Road to 16 Mile Road and back. (According to a 2007 study $50M ± will be spent during the Cruise. We upgraded that $50 M to $75 M b/c of the increase in observers from 1 M to 1½ M. See lookupdetroit.com). The purpose of this Scope, Guv, is to show what a revenue (tax) bonanza the WDC is for the state. Our calculations take a MINIMALISTIC approach to estimating that revenue. For example we have read that some claim 50,000± cruisin’ cars but, we chose to use ONLY 40,000 and while the route is said to be a 36 mile ellipse, really cruisers are more likely to cruise an ellipse that is from 8 Mile to 16 Mile+ (a 16 mile ellipse). We project that each cruiser will ONLY toll 48 miles or 3-16 mile ellipses. Our gas price estimate is based on an estimate of the Mon b-4 Cruise XX when the avg price of all shades, all grades of gas is expected to be $3.56 per gal.

Sincerely,

Your Humble Servant and a WDC Good Will Ambassador, Mike Bernacchi

The WDC provide$ the $tate of MI (and you Guv Rick Snyder as its #1) with “in$tant” revenue. In many ways it’s even better than the lottery! There are NO tickets sold and NO public payouts being made. “What a gig, Guv, what a gig!!” The WDC provides 2 main $ource$ of rev for MI (sales tax $$ and ga$ tax flow$). Furthermore, the$e revenue$ are provided from 2 different tax payers, the OBSERVER$ and the PARTICIPANT$/CRUISER$.

Table 2 shows the revenues generated by the WDC, (the ultimate gifter), for MI, the (ultimate giftee). We offer 3 alternative scenarios (pots of taxation gold) depending on crowd attendance (1 M, 1¼ M or 1½ M). Detailed calculations for this table are appended.


Now, that we’ve firmly established the existence of the Guv’s
WDC “Gas Gush Fund”, what could he do with it? The avg salary for a School Teacher in MI is $62,530 according to michigan.gov [2013]. The national avg salary for a Police Officer is $58,720 according to bls.gov [2013]. Table 3 (for hiring School Teachers) & Table 4 (for hiring Police Officers) show how Guv Snyder’s fund (tax revenue) might be spent given our 3 different WDC attendance scenarios and the Guv’s desire to hire one or the other. A crowd of 1½ M at WDC XX for example, will “buy” 76 Teachers OR 81 Police Officers. “GUV, here’s ga$$$$$$$$$$$$$$in’ to you-in the public intere$t!”In 1995, it was estimated that there were
5,900 vehicles cruising’ WdWrd Ave during WDC I. The avg yearly price of gas was about $1.12 per gal and 3 loops around the 16 mile “route” would have fumed and consumed $26,432. 2014’s gas spend by cruisers will be about 21½ TIMES that of the ’95 cruisers while the # of vehicles & mileage driven have ONLY increased times. (In 1995 there probably were many fewer miles per cruise vehicle than today).

 

The 40,000 vehicles will travel a total of 1,920,000 driven miles (40,000 vehicles X 48 miles or 3 loops at 16 miles per loop). A cross country road trip from SF, CA to Norfolk, NC is about 3,000 miles. (A round trip is 6,000 miles). At the end of the WDC all cruisers will have combined for 320 round trips from SF to Norfolk.

Finally, here is a CHARITY idea. If each cruiser was to donate $1 per cruise mile (48 in total) that means $48 X 40,000 vehicles would amount to $1,920,000 to a charity. Not a bad yearly haul, heh? (By the way that was “kinda” Nelson House’s thought of generating $$ for that 1995 soccer field in Ferndale)

APPENDIX A: ALTERNATIVE “TAX” REVENUE

B Assuming an Attendance of 1.00 M:a

1. $ALE$ TAX ON $PENDING by OB$ERVER$ (Assumes $50 per person spending):

Based on the estimate of $50 M immediate econ spending (1M observers), and a sales tax of 6%, the tax receipts = $3.00 M.

2. $ALE$ TAX BA$ED ON GA$ CON$UMPTION:

Given the aforementioned data in A-2, we calculate 1.00 M ÷ 4 per car x 30 miles ÷ 22 mpg x $3.78 per gal x $0.06 sales tax = $77,318.

3. $TATE EXCISE TAX BA$ED ON GA$ CON$UMPTION:

The # of gals of gas consumed by our 1.00 M observers, 4 per car, driving 30 miles total at 22 mpg is 340,909 gals x 19¢ per gal excise tax = $64,773.


Table 6, below, established all of the various tax $$ from the WDC’s 160,000 gals of consumption including the Fed Tax. For 160,000 gals calculation please see Table’1 data from 2009 to 2014 AND its explanation in the “Dear Guv” memo/letter above it.

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About bernacmd

For over 24 years, University of Detroit Mercy Marketing Professor Michael Bernacchi, Ph.D., J.D, has produced "uNDER tHE mIKE-rOSCOPE", a newsletter discussing current "marketing and advertising¹s bends, trends & ends." A well-know fixture in Detroit and national media, UDM's marketing guru has made several appearances on CNN's "Talk Back Live," the Voice of America worldwide radio network (VOA), ABC, CBS, NBC, MSNBC and on the pages of Sports Illustrated, Time, TV Guide, the New York Times, USA Today, the Wall Street Journal and the Washington Post, to name a few. At University of Detroit Mercy, he has taught courses in Marketing Management, Consumer Behavior, Marketing Communications, Research and Corporate Social Responsibility and Sports and Entertainment Marketing. Michael Bernacchi can be reached at 313-993-1116 or bernacmd@udmercy.edu. Please appropriately attribute the following for their work on uNDER tHE mIKE-rOSCOPE: Yen Ju Lee Robert Rouse Vidhyasagar Natarajan Eric Baumgardner & Ian Young
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