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News Analysis: Gay Marriage Could Be Worth Billions For California

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Thanks to a recent decision by the California Supreme Court, the Golden State may soon be seeing a flood of same-sex couples flocking to the state to get married, beginning June 17.

Gay marriage may have some Christians and conservatives seeing red, but the state’s travel and wedding-related businesses are focused on the green.

Tim Zahner, the Director of Public Relations and Communications for the Sonoma County Tourism Board, is practically giddy, whether he’s talking up the Russian River region as a “gay playground” or bragging about how perfect a wedding under the redwoods would be.

The excitement of tourism professionals aside, how much could gay marriage realistically bring in?

Editor’s Note: This article was written and published in May of 2008.

Prof. Lee Badgett, Research Director at the Williams Institute at the University of California-Los Angeles, has done a series of studies on the economic implications of gay marriage in New Jersey, Vermont, Massachusetts, and California, among others.

While the 2000 Census estimated roughly 500,000 co-habitating gay couples nationwide, more recent studies such as the American Community Survey now estimate close to 800,000 same-sex couples. Of these, about 15%–or about 110,000–live in California. Less than 3% live in Massachusetts.

According to Badgett, figures from Vermont (which legalized civil unions in 2000 when almost no other state had similar laws) and Massachusetts show that roughly half of GLBT couples living together will seek legal recognition within the first 3-4 years. That’s about 50,000-60,000 gay marriages from California residents alone.

red roseAnd the economic boost? Badgett believes each California GLBT couple will likely spend close to the average wedding cost–now approaching $35,000 in California–but only about one-quarter of that amount is presumed to be “additional” spending that would not have otherwise gone into the economy. Even by this measure, 50,000 gay weddings could generate about $437.5 million in new economic activity over the next 3 years.

But that’s really just the tip of the iceberg …

Massachusetts has seen a rather limited impact from its legalization of gay marriage, since its laws mostly limit marriages to residents. But California law allows out-of-state couples to get married. Plus, the Golden State has long been a top destination for GLBT travelers, with San Francisco, Los Angeles, Palm Springs, and even San Diego and the Sonoma/Napa Valley/Russian River region attracting thousands upon thousands of gay tourists annually.

And as Badgett points out: “When [San Francisco Mayor] Gavin Newsom allowed gay marriages in 2004, people from 46 states came to California – thousands of couples in just one month.”

wedding aisleWhile many states will undoubtedly refuse to accept California marriages–many have gone so far as to put this fact into their state constitutions–but “it is a strong claim in terms of most employers,” says Badgett. In other words, a California marriage may not result in full equal rights for gay couples, but it could help secure benefits like health care and life insurance from employers, making it an attractive proposition.

So if California can attract just half of the couples who presumably would want to get married–say, 200,000, a quarter of the 800,000 couples nationwide–the potential economic boost grows significantly. The big question is how much.

According to a 2005 Wedding Survey by WeddingChannel.com, the average cost of a destination wedding is half that of a traditional one–about $16,500 per couple. Badgett’s research indicates that gay couples usually spend less on their marriages–despite their higher average incomes–because of social discrimination that results in fewer guests and less financial help from parents.

GayWeddings.com President Kathryn Hamm thinks this is probably accurate. In smaller, less progressive markets, weddings do tend to be smaller, in her experience. But in large cities, Ms. Hamm, who has put together both gay and straight marriages, believes that gay marriages generally run pretty close to the ‘straight’ average.

“A wedding is a wedding is a wedding,” she says, “there is no gay discount.”

Wedding FlowersAt the most conservative end of the scale, Badgett used figures based on average daily tourism spending (not wedding-related, just average tourists) and calculated gay couples might spend as little as $4200 for their wedding. But even Badgett admits her figures are a conservative estimate and may be unrepresentative of the higher spending visitors would make for an actual wedding.

Split the difference between the figures and the average gay wedding looks like it should cost just over $10000, meaning that 200,000 weddings would pump about $2 billion into California’s economy over the next three years. Toss in the $437 million from in-state couples and the legalization of gay marriage could total around $2.5 billion.

Of course, should other states follow California’s lead, the number of out-of-state couples could drop. But “as long as they’re the only game in town, they’re likely to get a very large portion of that,” Badgett noted. And with 26 states having amended their constitutions to ban gay marriage according to Lambda Legal, a pro-gay rights legal and public policy organization, it looks unlikely there will be a tidal wave of gay marriage legalization.

wedding champagneBadgett expects that wedding-related industries will see biggest economic bump: “florists, jewelry, hotels, restaurants, photographers, bakeries, caterers, clothing — all these will probably see a very significant boost.”

And the (deficit-ridden) California state budget would get a boost, too. California’s sales tax is about 8.25% on average (it varies by county), meaning that gay marriage would potentially add over $200 million in revenue to government coffers over the next three years. Plus, hotel and rental car spending, which are taxed at higher rates, could yield even more cash for local and state treasuries.

And none of these figures even address the potential boost to GLBT tourism. After all, about half of gays and lesbians say that a destination’s perceived ‘gay-friendliness’ is important in choosing how to spend their travel dollars, estimated at well over $50 billion annually.

When asked about the gay marriage, California Gov. Arnold Schwarzenegger said: “You know, I’m wishing everyone good luck with their marriages and I hope that California’s economy is booming because everyone is going to come here and get married.”

Schwarzenegger’s hopes might just be realized.

By New Media Manager Matthew Calcara for PeterGreenberg.com.

Planning a gay wedding? This article should help: Weddings Away: Travel Trends and Tips for Planning Your Destination Wedding.

And don’t miss out on the GLBT Travel Basics.

Previously by Matt Calcara on PeterGreenberg.com:

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