The Economic Impact of University System of Georgia Institutions on Their Regional Economies in FY 2005 February 2006 A Needs Assessment Study Commissioned by Georgia's Intellectual Capital Partnership Program (ICAPP) Dr. Jeffrey M. Humphreys, Director Selig Center for Economic Growth Terry College of Business The University of Georgia The Economic Impact of University System of Georgia Institutions on their Regional Economies in FY 2005 Executive Summary The statewide economic impact of the University System of Georgia's 34 institutions in fiscal year 2005 includes: $9.9 billion in output (sales); $6.1 billion in gross regional product; $4.5 billion in income; and 109,698 full- and part-time jobs (2.8% of all jobs held by Georgians). These benefits permeate both the private and public sectors of the host communities. For example, for each job created on campus there are 1.6 off-campus jobs that exist because of spending related to the college or university. These economic impacts were especially significant given the sub-par performance of the state's economy. In both good and bad economic times, continued emphasis on colleges and universities as a pillar of the state's economy translates into jobs, higher incomes, and greater production of goods and services. In addition to the system-wide impact summarized here, the chapters that follow this summary quantify the economic benefits that each institution conveys to the community in which it is located. Each institution's benefits are estimated for several categories of college/university-related expenditures: Spending by the institutions themselves for salaries and fringe benefits, operating supplies and expenses, and other budgeted expenditures; spending by the students attending the institutions; and spending by the institutions for capital projects. 1 1. Introduction How much does a region benefit economically from hosting an institution of higher education? Traditionally, the benefits are discussed in broad, qualitative terms that often fail to satisfy those who demand tangible evidence of the economic linkages between the academic community and the community as a whole; however, this report quantifies the economic benefits that the University System of Georgia's 34 institutions convey to the communities in which they are located. The benefits are estimated for three important categories of college/university-related expenditures: Spending by the institutions themselves for salaries and fringe benefits, operating supplies and expenses, and other budgeted expenditures; spending by the students attending the institutions; and spending by the institutions for capital projects (construction). The economic impact estimates are based on regional inputoutput models of each institution's regional economy, certain necessary assumptions, and available data regarding annual spending in the specified categories. Moreover, the emphasis is on funds received by recipients in the region that hosts each college or university. The study reports expenditures and impacts for the 2005 fiscal year (FY 2005) July 1, 2004 through June 30, 2005. The study does not account for all of the short-term impacts of the 34 institutions on their host communities, however. For example, several sources of college/university-related spending are identified, but no dollar amounts are estimated for them. To do so would require collecting survey data, a task beyond the resources available to this study. The study also does 2 not quantify the many long-term benefits flowing to the economic development of the host communities through the presence of an institution of higher education. Neither does the study measure intangible benefits (such as cultural opportunities, intellectual stimulation, and volunteer work) to residents of their host communities. Finally, the study is not a net benefit analysis; it estimates only economic benefits and does not calculate what the presence of a tax-exempt college/university costs the community. 3 2. Economic Impact Highlights In the simplest terms, the total economic impact of all 34 institutions on their host communities was $9.9 billion in FY 2005. The output impact of each institution is the change in regional output that is due to spending by the institution and spending by the students who attend that particular college or university. Of the FY 2005 total, $6.6 billion (66 percent) is initial spending by the institutions and students; $3.3 billion (34 percent) is the induced or respending (multiplier) impact. Dividing the FY 2005 total output impact ($9.9 billion) by initial spending ($6.6 billion) yields an average multiplier value of 1.51. On average, therefore, every dollar of initial spending generates an additional 51 cents for the economy of the region hosting the institution. In FY 2005, value added comprises $6.1 billion (61 percent) of the $9.9 billion output impact, with domestic and foreign trade comprising the remainding $3.8 billion (39 percent) of the output impact. The $6.1 billion value-added impact reported for FY 2005 equals 1.7 percent of Georgia's gross state product. Labor income received by residents of the communities that host one or more institutions equals $4.5 billion, and represents 73 percent of the value-added impact. The collective or rolled up employment impact of all 34 institutions on their host communities in FY 2005, including multiplier effects, is 109,698 full- and part-time jobs. Approximately 39 percent of these positions are on-campus jobs at one of the institutions of the University System of Georgia, and 61 percent are off-campus positions in either the private or public sectors. On average, for each job created on campus there 4 are 1.6 off-campus jobs that exist because of spending related to the institution. The 109,698 jobs generated by the University System of Georgia account for 2.8 percent of all the jobs in Georgia, or about one job in 36. 5 3. Methodology Understanding the Concept of the Short-Term Economic Impact of a College or University The total annual economic impact of college- or university-related spending is defined to consist of the net changes in regional output, value added, labor income, and employment that are due to initial spending by the institution, its faculty and staff, and its students. The total economic impact includes the impact of the initial round of spending and the secondary, or indirect and induced spending often referred to as the multiplier effect created as the initial expenditures are respent. Figure 1 provides a schematic representation of impact relationships. There are two types of secondary spending, indirect spending and induced spending. Indirect spending refers to the changes in interindustry purchases as a region's industries respond to the additional demands triggered by spending by the college or university, its faculty and staff, and its students. It consists of the ripples of activity that are created when an institution and its employees and students purchase goods or services from other industries located in the host community. Induced spending is similar to indirect spending except that it refers to the additional demand triggered by spending by the region's households as their income increases due to changes in production. Basically, the induced impact captures the ripples of activity that are created when households spend more due to increases in their earnings that were generated by the direct and indirect spending. 6 The sum of the direct, indirect and induced economic impacts is the total economic impact, often expressed in terms of output (sales, plus or minus inventory), value added (gross regional product), labor income, or employment. Total industry output is gross receipts or sales, plus or minus inventory, or the value of production by industry (including households) for a given period of time. Total output impacts are the most inclusive, largest measures of economic impact. Because of their size, output impacts typically are emphasized in economic impact studies and receive much media attention. One problem with output as a measure of economic impact, however, is that it includes the value of inputs produced by other industries, which means that there inevitably is some double counting of economic activity. The other measures of economic activity (value added, labor income, and employment) are free from double counting and provide a much more realistic measure of the true economic impact of a college or university on its regional economy. The regional economic areas are the host communities, including the surrounding counties from which employees and students commute. The effects of expenditures that go to persons, businesses, or governments located outside the regions are not included in the value-added, labor income, and employment impact estimates. The multiplier concept is common to virtually all economic impact studies. Multipliers measure the response of the local economy to a change in demand or production. In essence, multipliers capture the impact of the initial round of spending plus the impacts generated by successive rounds of respending of those initial dollars. The magnitude of a particular multiplier depends upon what proportion of each dollar spent leaves the region during 7 each round of spending. Multipliers therefore are unique to the region and to the industry that receives the initial round of spending. Figure 2 illustrates the successive rounds of spending that might take place if a person buys an item locally. Assume that the amount spent is $100 and that the appropriate regional output multiplier is 2.0. The initial injection of spending to the region is $100, which creates a direct economic impact of $100 to the regional economy. Of that $100, only $50 is respent locally; the rest flows out of the region through non-local taxes, non-local purchases, and income transfers. After the first round of spending, the total economic impact to the region is $150. During the second round of respending, $25 is respent locally and $25 leaks out of the region, a 50 percent leakage. Now, the total economic impact to the region is $175. After seven rounds of respending, less than $1 remains in the local economy, but the total economic impact has reached almost $200. The induced (multiplier effect) impact to the region ($100) equals the total impact ($200) minus the direct impact ($100). The multiplier traces the flows of respending that take place throughout the region until the initial dollars have completely leaked to other regions. Obviously, multiplier effects within large, self-sufficient areas are likely to be larger than those in small, rural, or specialized areas that are less able to capture spending for necessary goods and services. Multiplier effects also vary greatly from industry to industry, but in general, the greater the interaction with the local economy, the larger the multiplier for that industry. For example, personal services, business services, and entertainment industries have intricate relationships with local supporting industries, and therefore have relatively high multiplier values. Conversely, electric, gas, 8 and sanitary services usually are less intertwined with local supporting industries, and their multipliers are lower. Analytic Approach Estimating the economic impact of the University System of Georgia institutions on their regional economies in FY 2005 involved four basic steps. First, initial spending (and employment) for each institution were obtained for Budget Unit "A" and Budget Unit "B" of the University System of Georgia FY 2005 Budget; and then the institutional expenditures were allocated to industrial sectors recognized by the economic impact modeling system. Second, spending by students was estimated and then allocated to industrial sectors. Third, expenditures associated with capital projects (construction) funded were obtained for each institution and were allocated to the appropriate industrial sectors. Finally, the IMPLAN Professional Version 2.0 modeling system was used to build regional economic models that are specific to each institution. The geographic areas corresponding to the regional models that were built for each institution, which include the labor force directly involved in their economic spheres, are reported in Appendix 1. These geographic areas are based on an analysis of commuting patterns data obtained from Census 2000 (Residence County to Workplace County Flows for Georgia, U.S. Census Bureau, Internet Release Date: March 6, 2003). For analytical purposes, all dollar amounts were converted to inflation-adjusted dollars, but the amounts expressed in this report have been re-inflated to 2005 dollars. Type SAM (social accounting matrices) multipliers from the IMPLAN modeling system were used to estimate the 9 economic impacts associated with all categories of spending. Type SAM multipliers capture the original expenditures resulting from the impact, the indirect effects of industries buying from industries, and the induced effects of households' expenditures based on information in the social account matrix. The multipliers account for Social Security and income tax leakage, institutional savings, commuting, inter-institutional transfers, and people-topeople transfers. Whenever appropriate, the IMPLAN software applied margins to convert purchaser prices to producer prices. In input-output models, all expenditures are in terms of producer prices, which allows all spending to be allocated to the industries that actually produce the good or service. The margins are derived from U.S. Bureau of Economic Analysis data. The margins used differed depending on the consumer. For example, households pay transportation, wholesale, and the full retail margins. In contrast, institutions of higher education may pay little or no retail margin as they have typically more buying power than a household. In addition, some sectors of the model do not have margins. For example, because there usually are no wholesalers or retailers involved when someone rents a room, hotel and lodging do not have margins. The model's default estimates of the local economy's regional purchase coefficients were used to derive the ratio of locally purchased to imported goods. The regional purchase coefficient represents the proportion of the total demands for a given commodity that is supplied by the region to itself. The regional purchase coefficients were estimated with an econometric equation that predicts local purchases based on each region's unique characteristics. In addition, the entire analysis was conducted using the full range of industrial sectors in order to avoid aggregation bias. 10 Initial Spending by the Institutions Institution-specific data on expenditures for personal services and number of positions were obtained from the Board of Regents for FY 2005. The expenditure amounts were treated as an industry change and are reported in the first column of Tables 1 and 2, respectively. These amounts were allocated to various economic sectors recognized by the IMPLAN software based on the typical expenditure pattern for households of moderate income. Institution-specific data on expenditures for operating expenses (nonpersonal services) for FY 2005 were obtained from the Board of Regents for FY 2005. These amounts were treated as an industry change and are reported in the first column of Tables 1 and 2, respectively. To avoid double-counting, the estimates of initial spending do not include expenditures arising from two budgetary classes: auxiliary enterprise funds (self-supporting activities for housing, food service, bookstore, athletics, and other) and student activity funds (cultural and recreational programs operated by students). The spending associated with such activities is included in the student's personal expenditures, however. Expenditures for the Medical College of Georgia do not account for spending by the hospital and clinics operated by MCG Health, Inc. and therefore are not comparable to previously published estimates for the institution. Since a detailed analysis of spending patterns at each institution was not practical, budgeted expenditures for operating expenses were allocated to various economic sectors based on a typical expenditure pattern estimated for U.S. colleges that was developed by the IMPLAN 2.0 modelers. 11 Institution-specific data on capital projects (construction) also were obtained from the Board of Regents. The economic impacts associated with capital projects funded through state appropriations as well as public/private ventures are estimated. In the case of capital projects funded through state appropriations, expenditures were allocated to the fiscal year of reported funding, regardless of whether or not all of the funds were actually spent during fiscal year 2005. In the case of public/private ventures, expenditures were allocated to the fiscal year following the board action date regardless of whether or not all of the funds were actually spent during fiscal year 2005. Due to these considerations as well as the extremely lumpy nature of large capital outlays, these amounts are not emphasized in this report and are not included in the economic impacts expressed in Tables 1-3. The amounts for capital projects and their impacts are reported in Appendix 2, however. It should be noted that previous editions of this study did not include the impacts of public/private ventures. The FY 2005 capital project impacts therefore are not directly comparable to those for FY 2004 or earlier fiscal years. Students' Personal Expenditures The students who attend an educational institution spend significant amounts of money in the local economy as a part of their living expenses, so the dollar value of this spending was estimated. Since a detailed survey of students' spending habits at each institution was not practical, typical expenditure levels per student per semester were estimated based on data obtained from several sources: (1) various annual Consumer Expenditure Surveys conducted by the U.S. Bureau of Labor Statistics (BLS); (2) a 12 special BLS study that appeared in the July 2001 issue of the Monthly Labor Review that examined the expenditures of college-age students and nonstudents; and (3) a sample of recent estimated costs of attendance prepared by individual institutions. Although the estimated costs of attendance prepared by individual institutions were not detailed enough to be used in the IMPLAN modeling system, they did provide information that was used to develop a profile of average expenditures for some of the items typically purchased by students. The Consumer Expenditure Surveys cover consumer units consisting of one person at various income levels, but no recent data are available specifically for college students; therefore, to adapt the data for this study, spending estimates for several categories of goods or services were increased, decreased, or eliminated. For example, compared to a weighted average of consumer units at lower income levels, students' expenditures for books and food consumed away from home were increased substantially, while students' expenditures for grocery stores, cash contributions, insurance and pensions, and health care were reduced. Because expenditures for vacation and travel do not take place locally, such expenditures were eliminated entirely. Additionally, expenditures for tuition were eliminated because of possible double counting. System institutions receive payments from students for tuition, which in turn support the institutions' expenditures, which has already been estimated. After adjustment, the average expenditure per student was estimated at $3,450 for Summer 2004 Semester, at $5,750 for Fall 2004 Semester, and at $5,750 for Winter 2005 Semester. The final step in estimating students' personal expenditures was to multiply the number of semesters of student spending by the average 13 spending per semester. For FY 2005, these amounts are reported in the first column of Tables 1 and 2. The number of semesters of students' spending equals each institution's FTE enrollment as reported in the Semester Enrollment Reports issued by the Board of Regents. 14 4. Results This section describes the economic benefits that the University System of Georgia's 34 institutions conveyed to their host communities in FY 2005. The estimates represent the economic impact of spending by an institution, its faculty and staff, and its students. Based on the methodology and available data described earlier, the IMPLAN modeling system was used to calculate four indicators of impact total output, total value added, total income, and total employment for each category of initial spending. All dollar amounts are reported in 2005 dollars. Total Initial Spending For each institution, total initial spending accruing to the institution's regional economy is the combination of three types of spending spending by the institution for personal services, spending by the institution for operating expenses, and spending by students attending the institution. Estimates of initial spending for FY 2005 are reported in the first column of Tables 1 and 2. Spending by the institutions for capital projects is reported in Appendix 2. For FY 2005, total initial spending for all 34 institutions was $6.6 billion. In FY 2005, spending originating from personal services accounted for 36 percent ($2.4 billion) of initial spending, spending due to operating expenses accounted for 24 percent ($1.6 billion) of initial spending, and students' personal expenditures accounted for 40 percent ($2.7 billion) of initial spending. 15 Total Output Impact The output impact was calculated for each category of initial spending, based on the impact of the first round of spending and the impacts generated by the re-spending of these amounts the multiplier effect. Total output impacts are the most inclusive, largest measures of economic impact. Conceptualized as the equivalent of business revenue, sales, or gross receipts, total output is the value of productions by all industries, including households. Output impacts for FY 2005 are reported in the second column of Tables 1 and 2. Measured in the simplest and broadest possible terms, the total economic impact of the 34 institutions of the University System of Georgia was $9.9 billion in FY 2005 (Table 1). This amount represents the combined impact of all 34 institutions on their host communities. Of the FY 2005 output impact, $6.6 billion (66 percent) was initial spending by the institutions and students, while $3.3 billion (34 percent) was the induced/respending impact or multiplier effect (i.e., the difference between output impact and initial spending). The multiplier captures the regional economic repercussions of the flows of respending that take place throughout the region until the initial spending has completely leaked to other regions. The average multiplier value for all institutions in FY 2005 was 1.51, obtained by dividing the total output impact ($9.9 billion) by initial spending ($6.6 billion). On average, therefore, every dollar of initial spending generated an additional 51 cents for the economy of the region hosting the institution. Thus, for all institutions, the output impact was 1.51 times greater than their initial spending. 16 That the estimates for the various institutions show differing outcomes is not surprising, given the differences in budgets, staffing, enrollment, and regional economies. Institutions located in the largest metropolitan areas (e.g., Atlanta) where multipliers are the highest, or institutions have the largest budgets, staffs, and enrollments had the largest economic impacts. Thus, for the most part, institutions with large initial spending will rank highly on the various indicators of economic impact, including value added, labor income, and employment impact described in the subsections that follow. Total Value-Added Impact Because value-added impacts exclude expenditures related to foreign and domestic trade, they provide a much more accurate measure of the actual economic benefits flowing to businesses and households in a region than the more inclusive output impacts. The value-added impacts for FY 2005 are reported in the third column of Tables 1 and 2. The 34 institutions collectively generated a value-added impact of $6.1 billion in FY 2005. For all institutions combined, the value-added impact equaled 92 percent of initial spending and 61 percent of the $9.9 billion output impact (with domestic and foreign trade comprising the remaining 39 percent of the output impact). The $6.1 billion value-added impact reported for FY 2005 equals 1.7 percent of Georgia's gross state product. 17 Labor Income Impacts Collectively, the 34 University System institutions generated a labor income impact of $4.5 billion in FY 2005. The labor income received by residents of the communities that host University System institutions represents 73 percent of the value-added impact and 68 percent of the initial spending. Labor income for each institution is reported in the fourth column of Table 2. Employment Impacts The economic impact of hosting a unit of the University System of Georgia probably is most easily understood in terms of its effects on employment. Collectively, the 34 institutions generated an employment impact of 109,698 jobs in FY 2005. Approximately 39 percent of these positions are on-campus jobs at one of the institutions of the University System of Georgia, and 61 percent are off-campus positions in either the private or public sectors. On average, for each job created on campus there are 1.6 off-campus jobs that exist because of spending related to the University System of Georgia. The employment impact associated with the University System of Georgia accounts for 2.8 percent of all the jobs held by Georgians, or about one job in 36. For all institutions combined, 16.6 jobs were generated for each million dollars of initial spending in FY 2005. Employment impacts in FY 2005 for the individual institutions are reported in the fifth column of Table 2. 18 5. Limitations and Topics for Future Research Because the goal of this study was to estimate the economic impact of all 34 institutions, certain necessary assumptions were designed to work well for the average institution, but may lead to an over- or under-estimate of the economic contribution that a specific institution makes to its host community. For example, detailed surveys of actual spending by students at various institutions could help to refine estimates of initial spending by students. Due to both resource limitations and data limitations, several important types of short-term college or university-related expenditures were not estimated. For example, studies could be conducted to measure (1) spending by visitors to the institutions and (2) spending by retirees who still live in the host communities. Also, it would be worthwhile to investigate expenditures supported by the non-institutional income of each institution's employees. Such income may come from an employee's consulting, investments, and other personal business activities. Moreover, other members of an employee's household often supplement their total household income. Employees' household incomes also can be supplemented via inheritances or gifts. At least a portion of income derived from these sources would not come to the community that hosts the institution if that person's job at the college/university did not exist. Since this study intentionally focused only on the short-term impacts of several types of college- or university-related spending, there was no attempt to evaluate the long-term impacts of the University System's institutions on the economic development of the host communities and the 19 state. After all, colleges and universities not only spend money year by year, but also have long-term impacts on the labor force, local business and industry, and local government. A college or university improves the skills of its graduates, thereby increasing their productivity and their lifetime earnings. Local businesses benefit from easy access to a large pool of part-time and full-time workers. Moreover, companies and agencies that depend on highly specialized skills often cluster around universities. This may be particularly true of high-tech and information-based companies, which, despite the recent recession and sub-par recovery, are still expected to account for a disproportionately high share of future economic growth. Finally, the outreach and service units of the college or university provide valuable services to local businesses and households. Cultural and educational programs and facilities often are available to the general public and provide intangible benefits to the host community by improving residents' quality of life. 20 6. Summary The fundamental finding of this study is that each of the University System of Georgia's 34 institutions creates substantial economic impacts in terms of output, value added, labor income, and employment. The combined economic impact of the University System's 34 institutions on their host communities in FY 2005 includes: $9.9 billion in output (sales); $6.1 billion in value added (gross regional product); $4.5 billion in labor income; and 109,698 full- and part-time jobs. These economic impacts were especially significant given the substandard performance of the national and state economies in FY 2005. In both good and tough economic times, continued emphasis on higher education as an enduring pillar of the regional economy translates into jobs, higher incomes, and greater production of goods and services for local households and businesses. 21 Figure 1 Schematic Representation of Impact Relationships Direct Expenditures Indirect & Induced Impacts (Multiplier Effects) Total Economic Impact 22 Figure 2 How Multipliers Capture the Impact of Respending Initial Impacts if the Output Multiplier Equals 2.0 $100 $50 -Leakage $25 -Leakage $50 $25 $12.50 -Leakage $12.50 Initial 1st 2nd 3rd 4th 5th 6th 7th It Initial Direct or Indirect Impact: $100 First Round of Respending: $50 respent locally; Second Round of Respending: $25 respent locally; Third Round of Respending: $12.50 respent locally; Fourth Round of Respending: $6.25 respent locally; Fifth Round of Respending: $3.12 respent locally; Sixth Round of Respending: $1.56 respent locally; Seventh Round of Respending: $.78 respent locally; $50 leakage* $25 leakage $12.50 leakage $6.25 leakage $3.12 leakage $1.56 leakage $.78 leakage ____ ____ Total Economic Impact: $200 Total Leakage: $100 *Leakage indicates amounts spent outside area and not recirculated locally. 23 Table 1 Total Economic Impact of all 34 Institutions of the University System of Georgia on Their Regional Economies in the 2005 Fiscal Year Total for All 34 Institutions in 2005 System Total Personal Services Operating Expenses Student Spending Initial Spending (current dollars) 6,604,968,339 2,394,512,085 1,554,235,704 2,656,220,550 Output Impact (current dollars) 9,941,390,018 4,720,950,694 1,979,135,659 3,241,303,665 Value Added Impact (current dollars) 6,094,645,930 3,416,807,415 729,990,060 1,947,848,455 Labor Income Impact (current dollars) 4,474,278,265 2,964,599,409 473,072,668 1,036,606,188 Employment Impact (jobs) 109,698 59,519 11,652 38,527 Notes: The impacts of spending on Output, Value Added, Labor Income, and Employment were estimated using the IMPLAN Professional System, version 2.0, Type SAM multipliers, and production functions provided by MIG, Inc. Initial spending for personal services and operating expenses was obtained from the Board of Regents of the University System of Georgia. The author estimated initial spending by students. Output refers to the value of total production, including domestic and foreign trade. Value added includes employee compensation, proprietary income, other property income, and indirect business taxes. Labor income includes both the total payroll costs (including fringe benefits) of workers who are paid by employers and payments received by self-employed individuals. Employment includes both full-time and part-time jobs. Estimates for the Medical College of Georgia do not include impacts associated with the hospital and clinics operated by MCG Health Inc. Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (www.selig.uga.edu), 2006. 24 Table 2 Total Economic Impact of University System of Georgia Institutions on Their Regional Economies in the 2005 Fiscal Year Institution Initial Spending (current dollars) Research Universities and Regional Universities Georgia Institute of Technology Personal Services Operating Expenses Student Spending 978,043,516 486,560,373 293,534,793 197,948,350 Georgia State University Personal Services Operating Expenses Student Spending 656,684,220 245,107,441 121,168,429 290,408,350 Medical College of Georgia Personal Services Operating Expenses Student Spending 531,224,056 319,358,970 178,401,236 33,463,850 University of Georgia Personal Services Operating Expenses Student Spending 1,344,679,021 508,441,851 454,680,970 381,556,200 Georgia Southern University Personal Services Operating Expenses Student Spending 317,743,770 94,496,964 45,226,806 178,020,000 Valdosta State University Personal Services Operating Expenses Student Spending 199,276,629 57,935,015 27,997,614 113,344,000 State Universities and State Colleges Albany State University Personal Services Operating Expenses Student Spending 85,338,738 26,909,989 17,727,949 40,700,800 Armstrong Atlantic State University Personal Services Operating Expenses Student Spending 122,066,908 34,480,027 19,073,331 68,513,550 Output Impact (current dollars) 1,652,296,917 992,715,792 400,496,957 259,084,168 1,045,507,612 500,085,999 165,321,429 380,100,184 870,932,252 615,077,686 215,917,343 39,937,223 2,055,579,330 1,002,312,695 576,057,977 477,208,658 406,004,713 172,396,122 49,363,284 184,245,307 268,228,942 107,836,348 33,465,712 126,926,882 119,264,794 51,006,656 20,840,015 47,418,123 170,463,019 66,139,114 23,188,018 81,135,887 Value Added Impact (current dollars) Labor Income Impact (current dollars) Employment Impact (jobs) 1,060,750,862 729,001,528 172,199,277 159,550,057 672,395,283 367,238,492 71,082,262 234,074,529 533,608,652 440,095,805 70,103,552 23,409,295 1,223,105,074 724,553,011 209,571,502 288,980,561 234,503,244 120,045,342 10,750,608 103,707,294 157,374,165 76,157,052 7,935,008 73,282,105 822,021,388 624,974,778 110,718,134 86,328,476 487,189,649 314,834,454 45,703,418 126,651,777 441,971,642 385,488,255 44,180,201 12,303,186 917,800,610 626,902,918 137,850,526 153,047,166 168,688,461 107,838,606 7,318,657 53,531,198 111,351,314 67,713,712 5,346,257 38,291,345 14,828 10,014 2,294 2,520 13,083 8,438 947 3,698 9,346 7,372 1,435 539 20,750 12,117 3,326 5,307 5,555 1,859 306 3,390 3,465 1,358 193 1,914 70,225,557 36,380,094 6,207,085 27,638,378 103,230,402 47,443,076 7,436,119 48,351,207 50,799,221 32,100,605 4,040,130 14,658,486 72,271,575 41,706,296 4,892,628 25,672,651 1,611 816 130 665 2,045 842 149 1,054 (continued) 25 Table 2 (continued) Total Economic Impact of University System of Georgia Institutions on Their Regional Economies in the 2005 Fiscal Year Institution Initial Spending (current dollars) Augusta State University Personal Services Operating Expenses Student Spending 115,241,623 31,513,318 17,411,255 66,317,050 Clayton State University Personal Services Operating Expenses Student Spending 106,668,969 29,936,015 16,200,404 60,532,550 Columbus State University Personal Services Operating Expenses Student Spending 136,863,005 36,931,672 24,914,533 75,016,800 Fort Valley State University Personal Services Operating Expenses Student Spending 72,895,628 29,369,444 15,140,734 28,385,450 Georgia College & State University Personal Services Operating Expenses Student Spending 115,743,330 38,318,842 16,231,838 61,192,650 Georgia Southwestern State University 50,802,619 Personal Services 15,061,309 Operating Expenses 10,703,510 Student Spending 25,037,800 Kennesaw State University Personal Services Operating Expenses Student Spending 338,865,177 88,153,402 62,921,375 187,790,400 North Ga. College & State University Personal Services Operating Expenses Student Spending 86,882,132 26,492,849 10,210,183 50,179,100 Savannah State University Personal Services Operating Expenses Student Spending 70,568,559 22,412,234 17,039,625 31,116,700 Output Impact (current dollars) 160,912,248 60,693,891 21,072,680 79,145,677 162,409,226 61,077,632 22,103,726 79,227,868 188,072,396 70,582,377 29,068,945 88,421,074 107,883,130 56,362,125 18,000,572 33,520,433 145,523,102 67,915,505 16,773,405 60,834,192 64,550,699 27,181,007 11,290,970 26,078,722 511,495,436 179,856,972 85,849,519 245,788,945 124,258,739 51,270,255 12,318,023 60,670,461 100,555,788 42,990,838 20,715,579 36,849,371 Value Added Impact (current dollars) 96,660,487 43,427,241 6,841,830 46,391,416 103,146,573 44,852,401 9,503,807 48,790,365 111,066,703 50,519,382 8,349,116 52,198,205 65,893,374 40,587,339 5,708,310 19,597,725 84,896,648 46,931,312 3,043,542 34,921,794 35,744,000 18,823,517 2,123,192 14,797,291 320,353,573 132,078,820 36,912,202 151,362,551 77,014,763 36,895,251 3,926,235 36,193,277 59,441,133 30,838,297 6,643,237 21,959,599 Labor Income Impact (current dollars) 66,732,420 38,038,743 4,311,813 24,381,864 70,961,912 38,452,072 6,110,617 26,399,223 77,177,460 44,331,441 5,533,876 27,312,143 49,528,825 35,579,351 3,660,283 10,289,191 62,206,049 42,601,188 1,987,276 17,617,585 25,864,493 16,940,222 1,420,520 7,503,751 218,862,551 113,230,866 23,733,260 81,898,425 53,913,449 32,188,403 2,591,930 19,133,116 43,140,013 27,109,354 4,370,948 11,659,711 Employment Impact (jobs) 2,406 1,198 140 1,068 1,732 834 127 771 2,598 1,270 177 1,151 1,389 825 114 450 1,982 903 68 1,011 789 331 57 401 4,631 1,748 492 2,391 1,422 612 73 737 1,177 565 133 479 (continued) 26 Table 2 (continued) Total Economic Impact of University System of Georgia Institutions on Their Regional Economies in the 2005 Fiscal Year Institution Initial Spending (current dollars) Southern Polytechnic State University Personal Services Operating Expenses Student Spending 72,371,633 23,636,517 9,320,016 39,415,100 University of West Georgia Personal Services Operating Expenses Student Spending 190,554,019 52,903,879 28,816,440 108,833,700 Dalton State College Personal Services Operating Expenses Student Spending 61,041,584 14,733,139 10,167,395 36,141,050 Macon State College Personal Services Operating Expenses Student Spending Associate Degree Colleges 93,598,109 20,965,149 18,525,460 54,107,500 Abraham Baldwin Agricultural College Personal Services Operating Expenses Student Spending 57,976,277 13,632,306 10,460,371 33,883,600 Atlanta Metropolitan College Personal Services Operating Expenses Student Spending 33,510,039 9,253,630 5,628,709 18,627,700 Bainbridge College Personal Services Operating Expenses Student Spending 41,762,692 7,169,630 9,557,562 25,035,500 Coastal Georgia Community College Personal Services Operating Expenses Student Spending 45,812,098 11,179,865 8,624,983 26,007,250 Output Impact (current dollars) 112,529,454 48,224,938 12,716,170 51,588,346 289,701,987 107,938,336 39,316,964 142,446,687 77,877,392 27,300,449 11,489,855 39,087,088 125,758,349 40,084,956 21,941,353 63,732,040 72,040,370 25,066,297 11,591,409 35,382,664 50,940,517 18,879,928 7,679,774 24,380,815 48,912,123 12,864,149 10,234,615 25,813,359 59,078,601 20,576,383 9,645,469 28,856,749 Value Added Impact (current dollars) 72,650,814 35,414,016 5,467,495 31,769,303 183,891,455 79,264,591 16,904,879 87,721,985 45,522,862 19,362,863 3,070,799 23,089,200 72,635,962 28,721,192 6,836,701 37,078,069 Labor Income Impact (current dollars) 51,065,492 30,360,521 3,515,409 17,189,562 126,287,106 67,953,725 10,869,248 47,464,133 31,393,908 17,213,666 2,063,827 12,116,415 49,087,426 25,239,564 4,369,607 19,478,255 Employment Impact (jobs) 1,248 673 73 502 3,515 1,904 225 1,386 929 328 67 534 1,520 507 138 875 40,681,250 17,663,511 2,693,922 20,323,817 32,180,787 13,864,488 3,302,026 15,014,273 26,117,205 8,935,822 2,138,011 15,043,372 34,152,621 14,586,984 2,462,816 17,102,821 28,033,624 15,763,060 1,780,813 10,489,751 22,132,988 11,886,059 2,123,088 8,123,841 17,148,541 8,044,385 1,366,587 7,737,569 23,536,096 12,978,566 1,625,227 8,932,303 941 310 67 564 510 229 44 237 672 190 53 429 769 279 58 432 (continued) 27 Table 2 (continued) Total Economic Impact of University System of Georgia Institutions on Their Regional Economies in the 2005 Fiscal Year Institution Initial Spending (current dollars) Darton College Personal Services Operating Expenses Student Spending 66,957,744 15,440,723 11,315,321 40,201,700 East Georgia College Personal Services Operating Expenses Student Spending 23,434,050 4,749,503 4,752,297 13,932,250 Gainesville College Personal Services Operating Expenses Student Spending 82,288,252 16,440,646 9,295,206 56,552,400 Ga. Highlands College (formerly Floyd) 53,099,326 Personal Services Operating Expenses Student Spending 12,665,728 6,374,048 34,059,550 Georgia Perimeter College Personal Services Operating Expenses Student Spending 313,382,095 69,133,079 49,192,916 195,056,100 Gordon College Personal Services Operating Expenses Student Spending 53,665,730 10,761,603 8,033,827 34,870,300 Middle Georgia College Personal Services Operating Expenses Student Spending 47,333,763 10,814,004 9,122,159 27,397,600 Output Impact (current dollars) 89,405,518 29,267,187 13,301,678 46,836,653 28,741,628 8,724,338 5,273,338 14,743,952 114,922,360 32,327,123 11,830,335 70,764,902 69,457,472 23,950,421 7,455,764 38,051,287 463,467,474 141,050,325 67,118,498 255,298,651 78,557,802 21,956,603 10,961,302 45,639,897 57,429,607 19,742,501 9,749,091 27,938,015 Value Added Impact (current dollars) 52,135,880 20,874,589 3,961,832 27,299,459 15,607,679 6,105,308 1,241,616 8,260,755 70,668,803 23,378,302 4,351,446 42,939,055 41,318,930 17,028,107 2,249,437 22,041,386 289,657,790 103,580,404 28,858,537 157,218,849 48,942,922 16,123,847 4,712,965 28,106,110 31,725,808 13,800,335 1,982,855 15,942,618 Labor Income Impact (current dollars) 35,476,507 18,419,054 2,578,717 14,478,736 10,558,875 5,465,072 830,416 4,263,387 45,893,249 20,229,339 2,868,555 22,795,355 27,718,464 15,014,642 1,399,069 11,304,753 192,421,888 88,799,732 18,555,034 85,067,122 32,060,786 13,823,013 3,030,272 15,207,501 21,980,942 12,407,301 1,371,869 8,201,772 Employment Impact (jobs) 1,152 412 83 657 440 142 33 265 1,357 522 68 767 1,015 418 45 552 4,575 1,707 384 2,484 780 273 63 444 773 270 52 451 (continued) 28 Table 2 (continued) Total Economic Impact of University System of Georgia Institutions on Their Regional Economies in the 2005 Fiscal Year Institution South Georgia College Personal Services Operating Expenses Student Spending Waycross College Personal Services Operating Expenses Student Spending Initial Spending (current dollars) 24,974,903 6,055,183 4,320,470 14,599,250 13,618,125 3,497,786 2,143,939 7,976,400 Output Impact (current dollars) 31,303,639 11,089,172 4,660,478 15,553,989 17,327,383 6,406,575 2,325,412 8,595,396 Value Added Impact (current dollars) 17,526,160 7,759,191 934,741 8,832,228 9,818,510 4,475,906 483,098 4,859,506 Labor Income Impact (current dollars) 12,153,731 6,958,393 630,054 4,565,284 6,847,607 4,012,050 324,402 2,511,155 Employment Impact (jobs) 440 156 25 259 253 97 13 143 Notes: The impacts of spending on Output, Value Added, Labor Income, and Employment were estimated using the IMPLAN Professional System, version 2.0, Type SAM multipliers, and production functions provided by MIG, Inc. Initial spending for personal services and operating expenses was obtained from the Board of Regents of the University System of Georgia. The author estimated initial spending by students. Output refers to the value of total production, including domestic and foreign trade. Value added includes employee compensation, proprietary income, other property income, and indirect business taxes. Labor income includes both the total payroll costs (including fringe benefits) of workers who are paid by employers and payments received by self-employed individuals. Employment includes both full-time and part-time jobs. Estimates for the Medical College of Georgia do not include impacts associated with the hospital and clinics operated by MCG Health Inc. Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (www.selig.uga.edu), 2006. 29 Table 3 On-Campus and Off-Campus Jobs that Exist Due to Institution-Related Spending in the 2005 Fiscal Year Institution Total Employment Impact On-Campus Jobs Off-Campus Jobs that Exist Due to Institution-Related Spending System Total 109,698 42,422 67,276 Research Universities and Regional Universities Georgia Institute of Technology Georgia State University Medical College of Georgia University of Georgia Georgia Southern University Valdosta State University 14,828 13,083 9,346 20,750 5,555 3,465 6,471 6,653 4,920 8,631 1,241 940 8,357 6,430 4,426 12,119 4,314 2,525 State Universities and State Colleges Albany State University Armstrong Atlantic State University Augusta State University Clayton State University Columbus State University Dalton State College Fort Valley State University Georgia College & State University Georgia Southwestern State University Kennesaw State University Macon State College North Georgia College & State University Savannah State University Southern Polytechnic State University University of West Georgia 1,611 2,045 2,406 1,732 2,598 929 1,389 1,982 789 4,631 1,520 1,422 1,177 1,248 3,515 623 584 956 616 1,001 237 605 718 248 1,106 351 424 398 501 1,519 988 1,461 1,450 1,116 1,597 692 784 1,264 541 3,525 1,169 998 779 747 1,996 Associate Degree Colleges Abraham Baldwin Agricultural College Atlanta Metropolitan College Bainbridge College Coastal Georgia Community College Darton College East Georgia College Gainesville College Georgia Highlands College (formerly Floyd) Georgia Perimeter College Gordon College Middle Georgia College South Georgia College Waycross College 941 510 672 769 1,152 440 1,357 1,015 4,575 780 773 440 253 220 162 151 205 302 110 411 328 1,203 195 200 117 75 721 348 521 564 850 330 946 687 3,372 585 573 323 178 Notes: Employment includes both full-time and part-time jobs. Estimates for the Medical College of Georgia do not include impacts associated with the hospital and clinics operated by MCG Health Inc. Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (www.selig.uga.edu), 2006. 30 Appendix 1 Study Areas for Institutions Research and Regional Universities Georgia Institute of Technology Atlanta MSA Georgia State University Atlanta MSA Medical College of Georgia Richmond, Columbia, Burke, McDuffie, Jefferson, Lincoln, Warren, and Glascock University of Georgia Clarke, Oconee, Madison, Oglethorpe, Jackson, Barrow, Walton, and Gwinnett Georgia Southern University Bulloch, Screven, Candler, Jenkins, Evans, Tattnall, and Emanuel Valdosta State University Lowndes, Brooks, Lanier, Echols, Cook, and Berrien State Universities and State Colleges Albany State University Dougherty, Lee, Worth, Mitchell, Terrell, Colquitt, Baker, Sumter, Calhoun, and Tift Armstrong Atlantic State University Chatham, Effingham, Bryan, Liberty, and Bulloch Augusta State University Richmond, Columbia, Burke, McDuffie, Jefferson, Lincoln, Warren, and Glascock Clayton State University Atlanta MSA Columbus State University Muscogee, Harris, Chattahoochee, Marion, Talbot, Stewart, Troup, Meriwether Dalton State College Whitfield, Murray, Catoosa, Gordon, Walker, and Gilmer Fort Valley State University Peach, Houston, Bibb, Crawford, Macon, and Taylor Georgia College & State University Baldwin, Hancock, Putnam, Wilkinson, Jones, and Washington Georgia Southwestern State University Sumter, Schley, Macon, Lee, Crisp, Marion, Webster, and Dooly Kennesaw State University Atlanta MSA Macon State College Bibb, Houston, Jones, Monroe, Peach, Crawford, Twiggs, Baldwin, Wilkinson, and Laurens North Georgia College & State University Lumpkin, Hall, Dawson, White, Forsyth, and Union Savannah State University Chatham, Effingham, Bryan, Liberty, and Bulloch Southern Polytechnic State University Atlanta MSA University of West Georgia Atlanta MSA Associate Degree Colleges Abraham Baldwin Agricultural College Tift, Berrien, Worth, Colquitt, Irwin, Cook, and Turner Atlanta Metropolitan College Atlanta MSA Bainbridge College Decatur, Seminole, Miller, Grady, Early, Mitchell, and Baker Coastal Georgia Community College Glynn, Brantley, McIntosh, Camden, and Wayne Darton College Dougherty, Lee, Worth, Mitchell, Terrell, Colquitt, Baker, Sumter, Calhoun, and Tift East Georgia College Emanuel, Candler, Bulloch, Johnson, Jefferson, Toombs, Treutlen, and Jenkins Gainesville College Hall, Gwinnett, Jackson, White, Habersham, Lumpkin, Banks, and Forsyth Georgia Highlands College Floyd, Polk, Chattooga, Bartow, and Gordon Georgia Perimeter College Atlanta MSA Gordon College Atlanta MSA Middle Georgia College Bleckley, Dodge, Pulaski, Twiggs, and Laurens South Georgia College Coffee, Atkinson, Bacon, Jeff Davis, Ware, Telfair, Ben Hill, and Irwin Waycross College Ware, Pierce, Brantley, Bacon, Coffee, Clinch, and Atkinson Note: Study areas were defined by the author based on commuting data obtained from the Residence County to Workplace County Flows for Georgia, U.S. Census Bureau, Internet Release date March 6, 2003. Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (www.selig.uga.edu), 2006. 31 Appendix 2 Economic Impact of Capital Outlays in Fiscal Year 2005 Institution Initial Spending (2005 dollars) Output Impact (2005 dollars) Value Added Impact (2005 dollars) Labor Income Impact (2005 dollars) Employment Impact (jobs) System Total 420,475,000 716,318,737 348,234,099 297,398,477 8,131 Research Universities and Regional Universities Georgia Institute of Technology 2,000,000 3,432,037 2,398,574 1,739,094 31 Georgia State University 7,710,000 14,283,573 8,342,073 6,682,949 137 Medical College of Georgia 0 0 0 0 0 University of Georgia 46,680,000 85,109,311 44,659,470 37,961,052 886 Georgia Southern University 40,900,000 60,565,971 23,997,058 21,501,406 852 Valdosta State University 35,590,000 56,189,266 23,601,672 20,430,275 720 State Universities and State Colleges Albany State University 0 Armstrong Atlantic State University 4,365,000 Augusta State University 35,060,000 Clayton State University 3,600,000 Columbus State University 4,500,000 Dalton State College 0 Fort Valley State University 795,000 Georgia College & State University 33,125,000 Georgia Southwestern State University 4,635,000 Kennesaw State University 63,170,000 Macon State College 6,060,000 North Georgia College & State University 0 Savannah State University 4,975,000 Southern Polytechnic State University 0 University of West Georgia 50,075,000 0 7,333,941 57,700,041 6,937,000 7,133,493 0 1,243,645 45,957,206 6,621,422 121,705,380 10,290,605 0 8,398,641 0 96,476,126 0 3,394,265 27,485,283 3,619,718 3,235,353 0 867,554 18,938,926 2,791,893 64,332,396 5,134,442 0 3,965,037 0 50,996,432 0 2,921,424 22,625,008 3,011,633 2,837,595 0 637,115 17,227,139 2,560,185 54,660,712 4,270,329 0 3,471,911 0 43,329,666 0 86 698 68 89 0 14 577 87 1,204 127 0 102 0 955 Associate Degree Colleges Abraham Baldwin Agricultural College 4,715,000 7,167,806 3,004,679 2,666,404 97 Atlanta Metropolitan College 0 0 0 0 0 Bainbridge College 1,035,000 1,439,245 539,650 487,515 20 Coastal Georgia Community College 4,790,000 7,232,115 3,132,758 2,797,787 97 Darton College 4,845,000 8,279,381 3,898,809 3,377,437 102 East Georgia College 4,850,000 7,351,520 3,040,061 2,717,594 100 Gainesville College 4,200,000 6,645,146 4,337,262 2,587,012 81 Georgia Highlands College 3,950,000 6,217,947 2,684,073 2,355,467 79 Georgia Perimeter College 10,990,000 21,173,692 11,192,227 9,509,596 210 Gordon College 16,135,000 30,375,264 15,777,142 13,233,125 293 Middle Georgia College 21,725,000 31,058,963 12,867,292 11,799,047 419 South Georgia College 0 0 0 0 0 Waycross College 0 0 0 0 0 Notes: The impacts of spending on Output, Value Added, Labor Income, and Employment were estimated using the IMPLAN Professional System, version 2.0, Type SAM multipliers, and production functions provided by MIG, Inc. Initial spending for capital projects was obtained from the Board of Regents of the University System of Georgia. Output refers to the value of total production, including domestic and foreign trade. Value added includes employee compensation, proprietary income, other property income, and indirect business taxes. Labor income includes both the total payroll costs (including fringe benefits) of workers who are paid by employers and payments received by self-employed individuals. Employment includes both full-time and part-time jobs. Estimates for the Medical College of Georgia do not include impacts associated with the hospital and clinics operated by MCG Health Inc. Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (www.selig.uga.edu), 2006. 32 ICAPP Intellectual Capital Partnership Program The Economic Development Program of the University System of Georgia www.icapp.org 33