The economic impact of University System of Georgia institutions on their regional economies in fiscal year 2007: a needs assessment study

The Economic Impact of University System of Georgia
Institutions on their Regional Economies in FY 2007
April 2008
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 2007

Executive Summary The statewide economic impact of the University System of Georgia's 35 institutions in fiscal year 2007 includes: $11 billion in output (sales); $6.7 billion in gross regional product; $4.8 billion in income; and 106,267 full- and part-time jobs (2.6 percent of all jobs in Georgia). These benefits permeate both the private and public sectors of the host communities. For example, for each job created on campus there are 1.4 offcampus jobs that exist because of spending related to the college or university. These economic impacts demonstrate that 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 following chapters 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 who attend the institutions; and spending by the institutions for capital projects.
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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 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 who attend 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 on annual spending in the specified categories. Moreover, the emphasis is on funds received by residents in the region that hosts each college or university. The study reports expenditures and impacts for the 2007 fiscal year--July 1, 2006 through June 30, 2007. Note that since Georgia Gwinnett College began to enroll students in FY 2007 (Fall Semester 2006), its economic impact is estimated, but is probably not a very reliable indicator of the magnitude of its future economic impacts.
The study does not account for all of the short-term impacts of the 35 institutions on their host communities, however. For example, there are no dollar amounts estimated for several sources of college/university-related spending because doing so would require collecting survey data, a task beyond the resources available to this study. In addition, the study neither quantifies the many long-term benefits that an institution of higher education imparts to the host community's economic development nor does it measure intangible benefits (such as cultural opportunities, intellectual stimulation, and volunteer work) to local residents. 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.
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2. Economic Impact Highlights
In the simplest terms, the total economic impact of all 35 institutions on their host communities was $11 billion in FY 2007. 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 2007 total, $7.3 billion (66 percent) is initial spending by the institutions and students; $3.8 billion (34 percent) is the induced or re-spending (multiplier) impact. Dividing the FY 2007 total output impact ($11 billion) by initial spending ($7.3 billion) yields an average multiplier value of 1.52. On average, therefore, every dollar of initial spending generates an additional 52 cents for the economy of the region that hosts the institution.
In FY 2007, value added comprises $6.7 billion (61 percent) of the $11 billion output impact, with domestic and foreign trade comprising the remaining $4.3 billion (39 percent). The $6.7 billion value-added impact equals 1.7 percent of Georgia's state GDP in 2007. Labor income received by residents of the communities that host one or more institutions equals $4.8 billion, and represents 72 percent of the value-added impact.
The collective or rolled-up employment impact of all 35 institutions on their host communities in FY 2007, including multiplier effects, is 106,267 full- and part-time jobs. Approximately 42 percent of these positions are on campus (University System employees) and 58 percent are off-campus positions in either the private or public sectors. On average, for each job created on campus there are 1.4 off-campus jobs that exist because of spending related to the institution. The 106,267 jobs generated by the University System account for 2.6 percent of all the jobs in Georgia in 2007, or about one job in thirty-nine.
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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 (for operations as well as personnel services) and its students. The total economic impact includes the impact of the initial round of spending and the secondary, or indirect and induced spending--referred to as the multiplier effect--that occurs when the initial expenditures are re-spent. Figure 1 provides a schematic representation of impact relationships.
Indirect spending refers to the changes in inter-industry 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.
The sum of the direct, indirect, and induced economic impacts is the total economic impact, which is 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.
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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 people, 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 most 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 re-spending of those initial dollars. The magnitude of a particular multiplier depends upon what proportion of each spent dollar leaves the region during 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 occur 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 re-spent 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 re-spending, $25 is re-spent 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 re-spending that occur 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, and sanitary services usually are less intertwined with local supporting industries, and their multipliers are lower.
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Analytic Approach
Estimating the economic impact of the University System of Georgia institutions on their regional economies in FY 2007 involved four basic steps. First, initial spending (and employment) for each institution were obtained for Budget Unit "A" and "Budget Unit "B"; 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 (2007) 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 inflationadjusted dollars, but the amounts expressed in this report have been reinflated to 2007 dollars. Type SAM (social accounting matrices) multipliers from the IMPLAN modeling system were used to estimate the 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 allow all spending to be allocated to the industries that actually produce the good or service. The margins are derived form U.S. Bureau of Economic Analysis data. Moreover, margins were selected according to type of consumer to which these applied. 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 instance,
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because there usually are no wholesalers or retailers involved when someone rents a room, hotels and other 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.
Initial Spending by the Institutions
Institution-specific data on expenditures for personnel services and number of positions were obtained from the Board of Regents for FY 2007. 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 (nonpersonnel services) for FY 2007 were obtained from the Board of Regents for FY 2007. 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 operating by MCG Health, Inc., which became a not-for-profit corporation in July 2000. Prior to FY2007, the University of Georgia accounted for and reported HOPE scholarship funds and Stafford (FDSL) loan funds as sponsored operations instead of agency funds on budget basis reports. Therefore, the expenditures and impacts for the University of Georgia are not comparable to previously published
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estimates, and the expenditures and impacts for the Medical College of Georgia are not comparable to estimates in studies for years prior to FY 2004.
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.
Institution-specific data on capital projects (construction) also were obtained from the Board of Regents. The 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 2007. Therefore, the amounts for capital expenditures and their impacts are not included in the economic impacts expressed in Tables 1-3, but they are reported in Appendix 2.
It should be noted that previous editions of this study did not include the impacts of public/private ventures. The FY 2007 capital project impacts therefore are not directly comparable to those for FY 2004 or earlier fiscal years.
Students' Personal Expenditures
College students 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) annual Consumer Expenditure Surveys conducted by the U.S. Bureau of Labor Statistics (BLS); (2) a special BLS study that appeared in the July 2001 issue of the Monthly Labor Review that examined the expenditures of college-age students and non-students; 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 for a profile of average expenditures for some of the items typically purchased by students.
Although the Consumer Expenditure Surveys cover households consisting of one person at various income levels, 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
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weighted average of lower-income households, students' expenditures for books and for eating out were increased substantially, while students' expenditures for groceries, cash contributions, insurance and pensions, and health care were reduced. Because spending for vacation and travel do not take place locally, these expenditures were eliminated entirely. In addition, expenditures for tuition were eliminated because of possible double counting. 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 by semester was estimated at $3,675 for Summer 2006, $6,125 for Fall 2006, and at $6,125 for Spring 2007.
The final step in estimating students' personal expenditures was to multiply the number of semesters of student spending by the average spending per semester. For FY 2007, 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 Report issued by the Board of Regents.
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4. Results
This section describes the economic benefits that the University System of Georgia's 35 institutions conveyed to their host communities in FY 2007. 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 2007 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 personnel services, spending by the institution for operating expenses, and spending by that institution's students. Estimates of initial spending for FY 2007 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 2007, total initial spending for all 35 institutions was $7.3 billion. Spending originating from personnel services accounted for 37 percent ($2.7 billion) of initial spending, spending due to operating expenses accounted for 22 percent ($1.6 billion) of initial spending, and students' personal expenditures accounted for 41 percent ($3.0 billion) of initial spending.
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 2007 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 35 institutions of the University System of Georgia was $11 billion in FY 2007 (Table 1). This amount represents the combined impact of all 35 institutions on their host communities. Of the FY 2007 output
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impact, $7.3 billion (66 percent) was initial spending by the institutions and students, while $3.8 billion (34 percent) was the induced/re-spending 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 re-spending 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 2007 was 1.52, obtained by dividing the total output impact ($11 billion) by initial spending ($7.3 billion). On average, therefore, every dollar of initial spending generated an additional 52 cents for the economy of the region hosting the institution. Thus, for all institutions, the output impact was 1.52 times greater than their initial spending.
It is no surprise that estimates for the various institutions show differing outcomes, 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 that 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 valueadded, labor income, and employment impact described in the following subsections.
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 2007 are reported in the third column of Tables 1 and 2.
The 35 institutions collectively generated a value-added impact of $6.7 billion in FY 2007. For all institutions combined, the value-added impact equaled 92 percent of initial spending and 61 percent of the $11 billion output impact (with domestic and foreign trade comprising the remaining 39 percent of the output impact). The $6.7 billion value-added impact reported for FY 2007 equals 1.7 percent of Georgia's gross state product.
Labor Income Impact
Collectively, the 35 University System institutions generated a labor income impact of $4.8 billion in FY 2007. The labor income received by residents of the communities that host University System institutions
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represents 72 percent of the value-added impact and 67 percent of the initial spending. Labor income for each institution is reported in the fourth column of Table 2. Employment Impact
The economic impact of hosting an institution of the University System of Georgia probably is most easily understood in terms of its effects on employment. Collectively, the 35 institutions generated an employment impact of 106,267 jobs in FY 2007. Approximately 42 percent of these positions are on-campus jobs at one of the institutions of the University System of Georgia, and 58 percent are off-campus positions in either the private or public sectors. On average, for each job created on campus there are 1.4 off-campus jobs that exist because of spending related to the University System of Georgia.
The employment impact associated with the University System accounts for 2.6 percent of all the jobs held by Georgians, or about one job in 39. For all institutions combined, 14.6 jobs were generated for each million dollars of initial spending in FY 2007.
Employment impacts in FY 2007 for the individual institutions are reported in the fifth column of Table 2.
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5. Limitations and Topics for Future Research
Because the goal of this study was to estimate the economic impact of all 35 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 instance, studies could be conducted to measure spending by visitors to the institutions and 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 the 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 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.
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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.
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6. Summary The fundamental finding of this study is that each of the University System of Georgia's 35 institutions creates substantial economic impacts in terms of output, value added, labor income, and employment. The combined economic impact of the University System's 35 institutions on their host communities in FY 2007 includes: $11 billion in output (sales); $6.7 billion in valued added (gross regional product); $4.8 billion in labor income; and 106,267 full- and part-time jobs. These economic impacts demonstrate that 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.
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Figure 1 Schematic representation of impact relationships
Direct Expenditures Indirect & Induced Impacts (Multiplier Effects)
Total Economic Impact
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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 Re-spending: $50 re-spent locally, $50 leakage*
Second Round of Re-spending: $25 re-spent locally, $25 leakage Third Round of Re-spending: $12.50 re-spent locally; $12.50 leakage Fourth Round of Re-spending: $6.25 re-spent locally; $6.25 leakage Fifth Round of Re-spending: $3.12 re-spent locally; $3.12 leakage Sixth Round of Re-spending: $1.56 re-spent locally; $1.56 leakage
Seventh Round of Re-spending: $.78 re-spent locally; $.78 leakage

____

____

Total Economic Impact: $200 Total Leakage: $100

*Leakage indicates amounts spent outside area and not re-circulated locally.

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Table 1
Total Economic Impact of all 35 Institutions of the University System of Georgia on their Regional Economies in the 2007 Fiscal Year

Total for All Institutions
in 2007
System Total Personal Services Operating Expenses Student Spending

Initial Spending (current dollars)
7,279,143,097 2,713,323,746 1,599,893,451 2,965,925,900

Output Impact (current dollars)
11,037,935,664 5,329,349,505 2,058,384,442 3,650,201,717

Value Added Impact
(current dollars)
6,721,156,391 3,873,992,176
723,610,640 2,123,553,575

Labor Income Impact
(current dollars)
4,842,777,373 3,302,804,283
453,992,416 1,085,980,674

Employment Impact (jobs)
106,267 60,206 10,053 36,008

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 were 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.
Personal Services includes all expenditures for salaries and wages to all employees and persons in the employ of the various departments, boards, commissions, institutions, and other governmental units. Also includes the employer's share of payments for FICA, retirement, group insurance, or other employer payments for employee benefits. Source: University System of Georgia Business Procedures Manual, Section 2.9.1
The expenditures and impacts for the University of Georgia are not comparable to previously published estimates, and the expenditures and impacts for the Medical College of Georgia are not comparable to estimates in studies for years prior to FY 2004. See the text for details.
Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (www.selig.uga.edu), April 7, 2008.

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Table 2
Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2007 Fiscal Year

Institution

Initial Spending (current dollars)

Research Universities and Regional Universities

Georgia Institute of Technology
Personal Services Operating Expenses Student Spending

1,090,864,032
525,983,276 341,310,906 223,569,850

Georgia State University
Personal Services Operating Expenses Student Spending

745,777,381
272,130,643 168,188,088 305,458,650

Medical College of Georgia
Personal Services Operating Expenses Student Spending

582,738,161
361,083,692 183,101,269
38,553,200

University of Georgia
Personal Services Operating Expenses Student Spending

1,301,528,721
571,875,553 314,779,968 414,873,200

Georgia Southern University
Personal Services Operating Expenses Student Spending

362,022,139
108,815,199 59,953,390
193,253,550

Valdosta State University
Personal Services Operating Expenses Student Spending

224,133,271
66,481,176 31,555,495 126,096,600

State Universities

Albany State University
Personal Services Operating Expenses Student Spending

99,761,150
30,807,037 21,862,663 47,091,450

Armstrong Atlantic State University
Personal Services Operating Expenses Student Spending

136,606,685
40,330,975 23,658,935 72,616,775

Output Impact (current dollars)
1,829,265,854 1,066,593,953
466,762,747 295,909,154
1,186,130,572 551,829,158 230,007,116 404,294,298
961,399,599 690,585,100 224,990,766
45,823,733
2,068,967,696 1,128,578,076
411,004,170 529,385,450
470,491,626 199,457,446
67,342,910 203,691,270
302,427,198 123,793,448
36,008,569 142,625,181
137,394,103 58,259,751 25,800,655 53,333,697
195,283,435 77,508,711 29,684,421 88,090,303

Value Added Impact
(current dollars)

Labor Income Impact
(current dollars)

Employment Impact (jobs)

1,150,118,250 785,486,478 188,531,515 176,100,257
739,895,965 406,391,141
92,902,852 240,601,972
598,454,700 498,161,262
74,139,643 26,153,795
1,277,151,793 820,537,001 144,792,649 311,822,143
265,289,494 139,571,529
15,132,732 110,585,233
177,521,697 88,009,510 8,646,416 80,865,771

869,425,339 661,385,048 116,891,290
91,149,001
524,319,697 342,184,152
57,600,631 124,534,914
488,568,405 429,535,166
45,717,334 13,315,905
950,779,310 697,100,966
94,038,256 159,640,088
186,785,140 122,843,294
9,286,484 54,655,362
122,452,118 76,638,862 5,505,399 40,307,857

14,281 9,381 2,300 2,600
13,341 8,656 1,133 3,552
8,892 7,229 1,185
478
18,890 11,983
2,024 4,883
5,238 2,297
299 2,642
3,099 1,334
157 1,608

78,487,689 41,627,810
6,669,476 30,190,403
116,762,873 56,019,414 9,595,085 51,148,374

55,992,809 36,172,428
4,329,050 15,491,331
80,103,510 48,195,205
5,966,168 25,942,137

1,559 812 130 617
1,985 950 150 885
(continued)

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Table 2 (continued)
Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2007 Fiscal Year

Institution

Initial Spending (current dollars)

Augusta State University
Personal Services Operating Expenses Student Spending

129,242,404
35,777,177 20,685,527 72,779,700

Clayton State University
Personal Services Operating Expenses Student Spending

119,794,690
34,741,044 18,786,046 66,267,600

Columbus State University
Personal Services Operating Expenses Student Spending

154,757,145
45,591,251 25,272,994 83,892,900

Fort Valley State University
Personal Services Operating Expenses Student Spending

75,601,427
30,324,745 18,008,182 27,268,500

Georgia College & State University
Personal Services Operating Expenses Student Spending

135,485,842
44,360,021 18,335,096 72,790,725

Georgia Southwestern State University 60,576,621

Personal Services Operating Expenses

17,060,119 15,073,227

Student Spending

28,443,275

Kennesaw State University
Personal Services Operating Expenses Student Spending

381,518,157
110,330,949 43,966,858
227,220,350

North Ga. College & State University
Personal Services Operating Expenses Student Spending

101,142,365
31,742,777 11,849,088 57,550,500

Savannah State University
Personal Services Operating Expenses Student Spending

85,089,732
24,637,123 21,874,909 38,577,700

Output Impact (current dollars)
180,347,832 68,425,093 25,417,918 86,504,821
183,848,708 70,448,225 25,691,023 87,709,460
211,839,694 85,816,921 29,518,617 96,504,156
111,882,678 58,055,973 21,573,228 32,253,477
171,519,082 79,632,667 19,637,623 72,248,792
77,636,619 31,414,481 16,925,503 29,296,635
584,598,257 223,730,166
60,127,261 300,740,830
145,760,977 61,007,315 14,705,486 70,048,176
121,592,072 47,348,016 27,446,034 46,798,022

Value Added Impact
(current dollars)
107,107,432 49,359,204 8,375,790 49,372,438
114,455,389 51,881,156 10,376,937 52,197,296
123,319,348 61,508,237 7,613,780 54,197,331
66,515,705 41,944,533
6,185,706 18,385,466
99,860,163 55,667,830
3,974,818 40,217,515
41,107,999 21,739,531
3,176,966 16,191,502
368,026,524 164,764,685
24,286,179 178,975,660
89,385,444 44,143,873
4,775,418 40,466,153
70,264,933 34,220,775
8,871,557 27,172,601

Labor Income Impact
(current dollars)
72,861,782 42,559,539
5,164,832 25,137,411
77,135,265 43,684,292
6,433,797 27,017,176
86,393,792 53,576,975
5,085,123 27,731,694
49,561,190 36,215,293
3,954,194 9,391,703
71,554,550 49,276,251
2,314,001 19,964,298
29,412,123 19,185,687
2,106,669 8,119,767
246,427,964 138,733,004
15,057,657 92,637,303
61,582,885 37,873,153
3,168,605 20,541,127
48,739,229 29,441,173
5,516,282 13,781,774

Employment Impact (jobs)
2,127 1,090
134 903
1,737 839 127 771
2,436 1,276
137 1,023
1,455 999 105 351
1,855 906 69 880
793 347
70 376
5,244 2,306
296 2,642
1,443 650 73 720
1,157 549 138 470
(continued)

20

Table 2 (continued)
Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2007 Fiscal Year

Institution

Initial Spending (current dollars)

Southern Polytechnic State University
Personal Services Operating Expenses Student Spending

86,845,046
27,237,797 12,147,074 47,460,175

University of West Georgia Personal Services Operating Expenses Student Spending
State Colleges

201,579,411
59,846,694 25,764,417 115,968,300

Abraham Baldwin Agricultural College
Personal Services Operating Expenses Student Spending

65,561,742
15,216,392 12,094,725 38,250,625

Dalton State College
Personal Services Operating Expenses Student Spending

70,186,728
17,871,924 10,813,029 41,501,775

Gainesville State College
Personal Services Operating Expenses Student Spending

107,305,279
21,330,717 15,282,262 70,692,300

Georgia Gwinnett College
Personal Services Operating Expenses Student Spending

16,195,398
5,872,680 9,324,343
998,375

Gordon College
Personal Services Operating Expenses Student Spending

61,955,404
13,445,397 9,185,057
39,324,950

Macon State College
Personal Services Operating Expenses Student Spending

106,693,797
25,674,255 15,865,467 65,154,075

Middle Georgia College
Personal Services Operating Expenses Student Spending

71,410,052
12,193,679 25,854,723 33,361,650

Output Impact (current dollars)
134,661,517 55,233,066 16,611,838 62,816,613
310,083,610 121,357,707
35,234,358 153,491,545
81,229,336 28,024,674 13,500,467 39,704,195
87,548,854 32,573,060 11,778,312 43,197,482
152,522,517 42,148,513 19,986,618 90,387,386
25,981,677 11,908,677 12,751,586
1,321,414
91,874,927 27,264,706 12,561,106 52,049,115
144,834,388 48,945,575 18,930,075 76,958,738
85,136,465 22,194,210 28,187,114 34,755,141

Value Added Impact
(current dollars)
84,768,951 40,676,048
6,709,737 37,383,166
194,950,001 89,373,126 14,231,613 91,345,262

Labor Income Impact
(current dollars)
57,759,037 34,249,514
4,160,099 19,349,424
131,356,577 75,252,790 8,823,733 47,280,054

Employment Impact (jobs)
1,139 505 82 552
2,867 1,344
174 1,349

44,725,879 19,774,062
2,701,832 22,249,985
50,001,962 23,019,971
2,252,521 24,729,470
90,854,422 30,666,371
7,057,895 53,130,156
14,706,996 8,770,071 5,150,531 786,394
56,127,773 20,078,922
5,073,593 30,975,258
84,878,357 35,286,764
5,762,051 43,829,542
40,541,629 15,588,029
5,869,797 19,083,803

30,279,609 17,365,993
1,780,677 11,132,939
34,047,972 20,247,674
1,481,386 12,318,912
57,865,589 26,033,956
4,623,402 27,208,231
10,984,873 7,384,460 3,193,377 407,036
36,084,974 16,906,592
3,145,675 16,032,707
56,254,117 30,464,199
3,499,224 22,290,694
26,955,576 13,764,692
3,619,319 9,571,565

1,005 452 57 496
949 418
42 489
1,558 629 97 832
224 149
63 12
847 328
62 457
1,492 558 91 843
839 303 110 426
(continued)

21

Table 2 (continued)
Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2007 Fiscal Year

Institution Two-year Colleges

Initial Spending (current dollars)

Atlanta Metropolitan College
Personal Services Operating Expenses Student Spending

34,722,459
9,392,676 6,813,908 18,515,875

Bainbridge College
Personal Services Operating Expenses Student Spending

50,266,572
10,714,478 10,903,019 28,649,075

Coastal Georgia Community College
Personal Services Operating Expenses Student Spending

51,943,968
13,111,247 10,179,971 28,652,750

Darton College
Personal Services Operating Expenses Student Spending

80,245,164
18,693,109 15,699,080 45,852,975

East Georgia College
Personal Services Operating Expenses Student Spending

33,773,307
5,926,290 8,386,667 19,460,350

Ga. Highlands College
Personal Services Operating Expenses Student Spending

68,989,194
15,242,788 12,425,931 41,320,475

Georgia Perimeter College
Personal Services Operating Expenses Student Spending

337,727,565
78,544,122 50,706,818 208,476,625

South Georgia College
Personal Services Operating Expenses Student Spending

31,584,363
7,235,393 7,451,320 16,897,650

Output Impact (current dollars)
52,871,937 19,046,559
9,318,420 24,506,958
60,015,706 19,396,591 11,960,861 28,658,254
69,284,826 24,466,039 11,814,792 33,003,995
105,808,797 35,350,880 18,526,861 51,931,056
42,137,152 10,945,520
9,534,563 21,657,069
89,617,375 28,565,052 14,384,052 46,668,271
504,549,383 159,272,528
69,344,553 275,932,302
39,566,414 13,297,418
8,212,529 18,056,467

Value Added Impact
(current dollars)

Labor Income Impact
(current dollars)

Employment Impact (jobs)

32,375,031 14,026,720
3,763,830 14,584,481
31,243,838 13,425,765
2,381,622 15,436,451
39,041,628 17,404,397
3,020,757 18,616,474
59,444,558 25,258,943
4,789,199 29,396,416
21,871,837 7,729,666 2,372,772
11,769,399
50,783,887 20,452,100
4,079,392 26,252,395
309,516,140 117,295,261
28,009,163 164,211,716
20,745,264 9,335,670 1,663,829 9,745,765

21,693,092 11,810,595
2,333,610 7,548,887
20,959,640 11,891,208
1,472,058 7,596,374
26,419,226 15,136,590
1,946,843 9,335,793
40,141,234 21,948,723
3,108,592 15,083,919
14,023,260 6,768,046 1,428,199 5,827,015
33,204,322 17,759,151
2,397,267 13,047,904
201,124,885 98,763,421 17,365,941 84,995,523
14,167,842 8,231,885 1,052,669 4,883,288

474 213
46 215
658 199
56 403
695 281
54 360
1,363 668 94 601
471 155
44 272
986 404
65 517
4,507 1,741
342 2,424
427 159
33 235
(continued)

22

Institution

Table 2 (continued)
Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2007 Fiscal Year

Initial Spending (current dollars)

Output Impact (current dollars)

Value Added Impact
(current dollars)

Labor Income Impact
(current dollars)

Employment Impact (jobs)

Waycross College
Personal Services Operating Expenses Student Spending

15,517,725
3,701,351 2,732,999 9,083,375

19,824,779
6,874,228 3,102,290 9,848,261

10,852,839
4,796,320 672,987
5,383,532

7,360,438

235

4,224,304

97

424,573

14

2,711,561

124

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 were 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.
Personal Services includes all expenditures for salaries and wages to all employees and persons in the employ of the various departments, boards, commissions, institutions, and other governmental units. Also includes the employer's share of payments for FICA, retirement, group insurance, or other employer payments for employee benefits. Source: University System of Georgia Business Procedures Manual, Section 2.9.1
Expenditures and impacts for the Medical College of Georgia and the University of Georgia do not include impacts associated with the hospital and clinics operated by MCG Health Inc. See the text for details.
Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (www.selig.uga.edu), April 7, 2008.

23

Table 3

On-Campus and Off-Campus Jobs that Exist Due to Institution-Related Spending
in the 2007 Fiscal Year

Institution

Total Employment Impact

On-Campus Jobs

Off-Campus Jobs that Exist Due to Institution-Re lated
Spending

System Total

106,267

44,140

62,127

Research Universities and Regional Universities

63,741

29,523

34,218

Georgia Institute of Technology Georgia State University Medical College of Georgia University of Georgia Georgia Southern University Valdosta State University

14,281 13,341
8,892 18,890
5,238 3,099

6,088 6,952 5,086 8,705 1,728
964

8,193 6,389 3,806 10,185 3,510 2,135

State Universities

25,796

9,440

16,356

Albany State University Armstrong Atlantic State University Augusta State University Clayton State University Columbus State University Fort Valley State University Georgia College & State University Georgia Southwestern State University Kennesaw State University North Georgia College & State University Savannah State University Southern Polytechnic State University University of West Georgia

1,559 1,985 2,127 1,737 2,436 1,455 1,855
793 5,244 1,443 1,157 1,139 2,867

625 711 878 621 1,022 808 714 267 1,615 472 403 334 970

934 1,274 1,249 1,116 1,414
647 1,141
526 3,629
971 754 805 1,897

State Colleges

6,913

2,217

4,696

Abraham Baldwin Agricultural College Dalton State College Gainesville State College Georgia Gwinnett College Gordon College Macon State College Middle Georgia College

1,005 949
1,558 224 847
1,492 839

373

632

338

611

507

1,051

112

112

244

603

401

1,091

242

597

Two-Year Colleges

9,816

2,960

6,856

Atlanta Metropolitan College Bainbridge College Coastal Georgia Community College Darton College East Georgia College Georgia Highlands College Georgia Perimeter College South Georgia College Waycross College

474 658 695 1,363 471 986 4,507 427 235

154 149 213 554 123 320 1,249 121
77

320 509 482 809 348 666 3,258 306 158

Notes: Employment includes both full-time and part-time jobs. The expenditures and impacts for the University of Georgia are not comparable to previously published estimates, and the expenditures and impacts for the Medical College of Georgia are not comparable to estimates in studies for years prior to FY 2004. See the text for details.

Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (www.selig.uga.edu), April 7, 2008.

24

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
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 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 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
State Colleges
Abraham Baldwin Agricultural College Tift, Berrien, Worth, Colquitt, Irwin, Cook, and Turner Dalton State College Whitfield, Murray, Catoosa, Gordon, Walker, and Gilmer Gainesville State College Hall, Gwinnett, Jackson, White, Habersham, Lumpkin, Banks, and Forsyth Georgia Gwinnett College Atlanta MSA Gordon College Atlanta MSA Macon State College Bibb, Houston, Jones, Monroe, Peach, Crawford, Twiggs, Baldwin, Wilkinson, and
Laurens Middle Georgia College Bleckley, Dodge, Pulaski, Twiggs, and Laurens
Two-Year Colleges
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 Georgia Highlands College Floyd, Polk, Chattooga, Bartow, and Gordon Georgia Perimeter College Atlanta MSA 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), April 7, 2008.
25

Appendix 2

Economic Impact of Capital Outlays in Fiscal Year 2007

Institution

Initial Spending (2007 dollars)

Output Impact (2007 dollars)

Value Added Impact
(2007 dollars)

System Total

308,208,000

516,777,326

275,030,920

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

158,685,000
48,000,000 95,885,000
0 9,800,000 5,000,000
0

281,412,209
85,269,375 171,807,045
0 16,910,130
7,425,659 0

155,550,960
47,943,578 95,011,001
0 9,594,513 3,001,868
0

State Universities

66,218,000

107,655,983

56,846,226

Albany State University

0

Armstrong Atlantic State University

5,618,000

Augusta State University

2,800,000

Clayton State University

0

Columbus State University

0

Fort Valley State University

0

Georgia College & State University

4,850,000

Georgia Southwestern State University

0

Kennesaw State University

4,900,000

North Ga College & State University 39,550,000

Savannah State University

3,800,000

Southern Polytechnic State University

0

University of West Georgia

4,700,000

0 9,313,463 3,313,243
0 0 0 6,234,984 0 8,908,752 64,974,944 6,365,468 0 8,545,129

0 4,871,106 2,583,335
0 0 0 3,089,361 0 4,361,245 34,900,975 2,856,969 0 4,183,235

State Colleges

54,510,000

86,004,892

42,621,438

Abraham Baldwin Agricultural College Dalton State College Gainesville College Georgia Gwinnett College0 Gordon College Macon State College Middle Georgia College

17,075,000 4,650,000 5,000,000 0
23,285,000 0
4,500,000

24,090,623 6,517,349 8,758,887 0
40,338,427 0
6,299,606

10,918,347 3,244,890 4,338,162 0
21,519,906 0
2,600,133

Two-Year Colleges

28,795,000

41,704,242

20,012,296

Atlanta Metropolitan College Bainbridge College Coastal Georgia Community College Darton College East Georgia College Georgia Highlands College Georgia Perimeter College South Georgia College Waycross College

0 0 4,700,000 5,000,000 1,400,000 0 0 15,395,000 2,300,000

0 0 7,314,873 7,917,176 1,925,250 0 0 21,288,356 3,258,587

0 0 3,845,375 4,019,838 944,789 0 0 9,626,296 1,575,998

Labor Income Impact
(2007 dollars)
204,973,597
116,393,357

Employment Impact (jobs)
4,738
2,501

35,148,253 71,615,126
0 7,310,959 2,319,019
0
42,136,456
0 3,742,225
784,974 0 0 0
2,410,602 0
3,250,244 26,658,454
2,172,376 0
3,117,581
31,292,966
7,933,876 2,510,651 3,256,788
0 15,568,991
0 2,022,660
15,150,818
0 0 3,010,788 3,103,951 701,773 0 0 7,106,424 1,227,882

738 1,538
0 152
73 0
986
0 94 11
0 0 0 72 0 71 614 56 0 68
797
254 73 69
339 0
62
454
0 0 84 88 21 0 0 223 38

26

Appendix 2 (continued) 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 were 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. The expenditures and impacts for the University of Georgia are not comparable to previously published estimates, and the expenditures and impacts for the Medical College of Georgia are not comparable to estimates in studies for years prior to FY 2004. See the text for details. Capital expenditures are allocated to the fiscal year that the USG reports funding them, not to the fiscal year in which the funds were spent. Therefore, institutions that show no capital outlays for FY 2007 in Appendix 2 may have spent capital funds in FY 2007 that were allocated (and reported) in a previous fiscal year. Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (www.selig.uga.edu), April 7, 2008.
27

ICAPP Intellectual Capital Partnership Program The Economic Development Program of the University System
of Georgia www.icapp.org
28