The cost of gay marriage – in dollars and cents
As states like California grapple over gay marriage, New England has found that it can be a small fillip to the economy.
Provincetown, Mass. — Maghi Geary might have some peculiar advice for Californians: Gay marriage is good for business. The co-owner of Provincetown Florist has 20 to 30 weddings booked this summer, and the reason for that decent return is evident in the next customer who walks through the door – a lesbian couple from Kansas desperately in need of some carnations for their wedding.
Tuesday, the California Supreme Court made the most recent in a series of legislative and judicial decisions on gay marriage nationwide: It upheld Proposition 8, a measure that bans gay marriage in the state. But here in Massachusetts, gay marriage has been legal since 2003, and in Provincetown, more than 2,000 same-sex couples have tied the knot since then.
In some ways, this farthest fingernail of Cape Cod is emblematic of the economics of gay marriage: a big impact, but only at the margins.
Massachusetts estimates that gay marriage has added money to its coffers – but only about $37 million a year, or less than 1 percent of the annual state budget.
In the private sector, the wedding industry could grow by more than $16 billion if gay marriage were expanded to all 50 states, according to a 2004 study by Forbes magazine.
But Massachusetts' experience suggests that money would be concentrated in cities with a significant gay population, like Provincetown.
Yet critics say the talk of economic profit obscures a greater social cost. "It's the societal message that same-sex marriage sends – that children do not need a mother and a father," says Kevin Smith, executive director of New Hampshire's Cornerstone Policy Research, which opposes gay marriage.
"People on both sides of this issue want it to be passed or banned because of their moral beliefs," he says.
The economic aspects of gay marriage, however, are becoming clearer – particularly in New England. Of the five states that allow gay marriage, four are in New England. New Hampshire, too, is considering a bill to legalize it. Moreover, New England is home to three of the top six states when ranked by highest concentration of same-sex couples, according to a 2007 study by the Williams Institute at the University of California in Los Angeles.
For the state of Massachusetts, revenue from gay marriage has come from three main sources: First, marriage licenses.
Second, income taxes are generally higher for married couples than they are for single filers, because many married couples have two incomes, which drives them into a higher tax bracket and incurs a "marriage penalty." This is particularly true for same-sex couples, who are more likely than heterosexual couples to have two incomes.
Third, same-sex marriage decreases costs for state benefit programs. Since marriage – whether gay or heterosexual – provides a safety net for spouses, an expansion of marriage results in more people becoming ineligible for state benefits. A Maine study, for instance, found that the state could save as much as $7.3 million a year in benefits since it legalized same-sex marriage.
Moreover, in Massachusetts, where gay marriage has been legal the longest, spending on same-sex weddings has brought the state $110 million so far, the Williams Institute study concludes.
"It's a lot of couples spending a lot of money," says M.V. Lee Badgett, research director at the Williams Institute and an economics professor at the University of Massachusetts in Amherst. "In towns and cities with a high percentage of gay residents, we can really see the impact."
Anecdotal evidence points to a significant economic windfall in a handful of places:
Same-sex weddings account for about 90 percent of business at It's About Time Events, a wedding-planning business in Boston. "On average, my clients spend about $30,000 on a 100-person wedding," says Bernadette Smith, adding that she's already planned between 80 and 90 same-sex weddings in recent years.
In Moretown, Vt., Megan Schultz says of her events company: "From a business standpoint, I have definitely seen an increase in traffic" with the legalization of same-sex marriages. "My specialty is in offbeat weddings, which would most certainly include same-sex weddings," she says. "The addition of same-sex couples to my clientele can only be a good thing."
Not everyone agrees. Critics suggest that same-sex marriage would create new burdens for companies by expanding the list of employees for whom they would have to offer spousal benefits. But research has indicated that "such coverage only adds about 1 to 2 percent to companies' healthcare costs," according to a 2004 online article for Workforce Management.