The Economic Impact of University System of Georgia Institutions on their Regional Economies in FY 2008 March 2009 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 2008 Executive Summary The statewide economic impact of the University System of Georgia's 35 institutions in fiscal year 2008 includes: $12.1 billion in output (sales); $7.3 billion in gross regional product (value added); $5.3 billion in labor income; and 108,405 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 1.6 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 (personal services), operating supplies and expenses, and other budgeted expenditures; spending by the students who attend the institutions; and spending by the institutions for capital projects. 2 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 2008 fiscal year--July 1, 2007 through June 30, 2008. 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. 3 2. Economic Impact Highlights In the simplest terms, the total economic impact of all 35 institutions on their host communities was $12.1 billion in FY 2008. 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 2008 total, $8.0 billion (66 percent) is initial spending by the institutions and students; $4.1 billion (34 percent) is the induced or re-spending (multiplier) impact. Dividing the FY 2008 total output impact ($12.1 billion) by initial spending ($8.0 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 that hosts the institution. In FY 2008, value added comprises $7.3 billion (61 percent) of the $12.1 billion output impact, with domestic and foreign trade comprising the remaining $4.8 billion (39 percent). The $7.3 billion value-added impact equals 1.8 percent of Georgia's state GDP in 2008. Labor income received by residents of the communities that host one or more institutions equals $5.3 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 2008, including multiplier effects, is 108,405 full- and part-time jobs. Approximately 39 percent of these positions are on campus (University System employees) 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 institution. The 108,405 jobs generated by the University System account for 2.6 percent of all the jobs in Georgia in 2008, or about one job in thirty-eight. 4 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. 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 5 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. Analytic Approach Estimating the economic impact of the University System of Georgia institutions on their regional economies in FY 2008 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 6 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 inflationadjusted dollars, but the amounts expressed in this report have been reinflated to 2008 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 from 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, 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 7 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 personal services and number of positions were obtained from the Board of Regents for FY 2008. 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 2008 were obtained from the Board of Regents for FY 2008. 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. 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 2008. 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 some previous editions of this study did not include the impacts of public/private ventures. The FY 2008 capital project impacts therefore are not directly comparable to those for FY 2004 or earlier fiscal years. 8 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 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 $3,816 for Summer 2007, $6,360 for Fall 2007, and at $6,360 for Spring 2008. 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 2008, 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. 9 4. Results This section describes the economic benefits that the University System of Georgia's 35 institutions conveyed to their host communities in FY 2008. 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 2008 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 that institution's students. Estimates of initial spending for FY 2008 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 2008, total initial spending for all 35 institutions was $8.0 billion. Spending originating from personal services accounted for 36 percent ($2.9 billion) of initial spending, spending due to operating expenses accounted for 24 percent ($1.9 billion) of initial spending, and students' personal expenditures accounted for 40 percent ($3.2 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 2008 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 $12.1 billion in FY 2008 (Table 1). This amount represents the combined impact of all 35 institutions on their host communities. Of the FY 2008 output impact, $8.0 billion (66 percent) was initial spending by the institutions and students, while $4.1 billion (34 percent) was the induced/re-spending impact or multiplier effect (i.e., the difference between output impact and initial 10 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 2008 was 1.51, obtained by dividing the total output impact ($12.112 billion) by initial spending ($8.041 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. 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 2008 are reported in the third column of Tables 1 and 2. The 35 institutions collectively generated a value-added impact of $7.3 billion in FY 2008. For all institutions combined, the value-added impact equaled 91 percent of initial spending and 61 percent of the $12.1 billion output impact (with domestic and foreign trade comprising the remaining 39 percent of the output impact). The $7.3 billion value-added impact reported for FY 2008 equals 1.8 percent of Georgia's gross state product. Labor Income Impact Collectively, the 35 University System institutions generated a labor income impact of $5.3 billion in FY 2008. The labor income received by residents of the communities that host University System institutions represents 72 percent of the value-added impact and 66 percent of the initial spending. Labor income for each institution is reported in the fourth column of Table 2. 11 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 108,405 jobs in FY 2008. 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 accounts for 2.6 percent of all the jobs held by Georgians, or about one job in 39. For all institutions combined, 13.5 jobs were generated for each million dollars of initial spending in FY 2008. Employment impacts in FY 2008 for the individual institutions are reported in the fifth column of Table 2. 12 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. 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. 13 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 2008 includes: $12.1 billion in output (sales); $7.3 billion in valued added (gross regional product); $5.3 billion in labor income; and 108,405 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. 14 Figure 1 Schematic representation of impact relationships Direct Expenditures Indirect & Induced Impacts (Multiplier Effects) Total Economic Impact 15 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 Impact 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. 16 Table 1 Total Economic Impact of all 35 Institutions of the University System of Georgia on their Regional Economies in the 2008 Fiscal Year Total for All Institutions in 2008 System Total Personal Services Operating Expenses Student Spending Initial Spending (current dollars) 8,040,726,392 2,920,067,946 1,914,666,398 3,205,992,048 Output Impact (current dollars) 12,112,060,651 5,716,566,661 2,450,306,233 3,945,187,757 Value Added Impact (current dollars) 7,336,916,224 4,168,432,917 874,501,986 2,293,981,321 Labor Income Impact (current dollars) 5,280,268,032 3,555,374,994 549,588,546 1,175,304,492 Employment Impact (jobs) 108,405 58,625 11,824 37,956 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 incl udes 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 are not comparable to previously published estimates. See the text for details. Source: Selig Center for Economic Growth, Terry College of Business, University of Georgia (www. selig.uga.edu), March 16, 2009. 17 Table 2 Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2008 Fiscal Year Institution Initial Spending (current dollars) Research Universities and Regional Universities Output Impact (current dollars) Georgia Institute of Technology Personal Services Operating Expenses Student Spending 1,230,577,646 578,595,899 411,068,763 240,912,984 2,047,259,498 1,169,849,754 558,565,998 318,843,746 Georgia State University Personal Services Operating Expenses Student Spending 833,452,859 289,291,144 214,461,859 329,699,856 1,312,676,376 584,911,102 291,413,758 436,351,516 Medical College of Georgia Personal Services Operating Expenses Student Spending 633,231,323 372,583,528 219,179,323 41,468,472 1,026,278,818 709,941,195 267,042,768 49,294,855 University of Georgia Personal Services Operating Expenses Student Spending 1,411,335,413 606,080,246 377,279,319 427,975,848 2,226,435,426 1,191,945,833 488,535,423 545,954,170 Georgia Southern University Personal Services Operating Expenses Student Spending 390,884,686 118,327,589 64,480,793 208,076,304 506,313,282 215,847,120 71,540,197 218,925,965 Valdosta State University Personal Services Operating Expenses Student Spending State Universities 242,796,569 71,344,883 34,269,030 137,182,656 326,149,842 132,268,432 38,637,480 155,243,930 Albany State University Personal Services Operating Expenses Student Spending 107,464,330 33,122,621 23,643,605 50,698,104 147,336,632 62,391,099 27,599,780 57,345,753 Armstrong Atlantic State University Personal Services Operating Expenses Student Spending 144,844,706 41,354,317 25,663,069 77,827,320 205,539,319 79,172,352 31,944,231 94,422,736 Value Added Impact (current dollars) Labor Income Impact (current dollars) Employment Impact (jobs) 1,280,214,058 863,626,462 226,936,128 189,651,468 809,745,929 431,803,065 118,396,596 259,546,268 630,603,837 513,809,757 88,677,852 28,116,228 1,364,039,558 869,215,209 173,422,865 321,401,48 4 286,836,607 151,729,294 16,259,896 118,847,417 191,738,192 94,414,574 9,382,222 87,941,396 966,944,786 727,603,090 140,986,849 98,354,847 571,951,191 363,792,983 73,555,334 134,602,874 512,360,051 443,231,929 54,788,971 14,339,151 1,016,539,584 738,840,862 112,861,428 164,837,294 202,419,102 133,586,510 9,996,585 58,836,007 132,140,744 82,248,871 5,986,068 43,905,805 15,294 9,851 2,711 2,732 11,379 6,226 1,415 3,738 8,693 6,802 1,389 502 19,415 12,126 2,375 4,914 5,470 2,383 315 2,772 3,317 1,443 167 1,707 84,410,405 44,739,588 7,207,048 32,463,769 122,622,083 57,417,243 10,400,376 54,804,464 60,272,302 38,892,944 4,687,284 16,692,074 83,746,409 49,421,445 6,480,175 27,844,789 1,597 811 138 648 2,012 928 159 925 (continued) Table 2 (continued) Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2008 Fiscal Year Institution Initial Spending (current dollars) Output Impact (current dollars) Augusta State University Personal Services Operating Expenses Student Spending 136,022,836 38,872,107 20,605,585 76,545,144 190,165,980 74,069,058 25,105,342 90,991,580 Clayton State University Personal Services Operating Expenses Student Spending 130,348,713 35,809,610 25,730,263 68,808,840 198,432,461 72,402,625 34,962,643 91,067,193 Columbus State University Personal Services Operating Expenses Student Spending 164,242,085 48,396,536 27,726,477 88,119,072 224,212,623 90,748,124 32,035,726 101,428,773 Fort Valley State University Personal Services Operating Expenses Student Spending 87,407,146 32,343,845 22,683,269 32,380,032 126,910,296 61,691,628 26,895,287 38,323,381 Georgia College & State University Personal Services Operating Expenses Student Spending 151,978,578 48,254,916 25,171,302 78,552,360 190,804,985 86,170,120 26,591,208 78,043,657 Georgia Southwestern State University 60,266,614 Personal Services 18,332,427 Operating Expenses Student Spending 13,099,219 28,834,968 77,171,033 33,275,300 14,204,886 29,690,847 Kennesaw State University Personal Services Operating Expenses Student Spending 432,055,384 122,491,810 61,381,110 248,182,464 659,533,635 247,663,373 83,405,513 328,464,749 North Ga. College & State University Personal Services Operating Expenses Student Spending 115,408,702 34,379,522 17,556,380 63,472,800 164,660,846 65,820,821 21,586,256 77,253,769 Savannah State University Personal Services Operating Expenses Student Spending 89,124,304 26,370,616 23,315,328 39,438,360 127,356,053 50,486,234 29,021,870 47,847,949 Value Added Impact (current dollars) 113,841,963 53,606,418 8,336,821 51,898,724 121,822,730 53,450,303 14,204,744 54,167,683 130,544,725 65,273,862 8,349,280 56,921,583 74,332,143 44,719,569 7,786,192 21,826,382 109,379,356 60,540,885 5,451,355 43,387,116 42,393,914 23,289,337 2,696,647 16,407,930 412,094,712 1 82,834,285 33,886,282 195,374,145 99,459,689 47,788,363 7,068,856 44,602,470 73,834,173 36,613,543 9,448,916 27,771,714 Labor Income Impact (current dollars) 77,861,906 46,242,944 5,150,845 26,468,117 81,948,432 45,031,745 8,824,871 28,091,816 91,634,685 56,878,250 5,586,608 29,169,827 54,784,476 38,629,295 4,987,222 11,167,959 78,352,091 53,605,012 3,179,340 21,567,739 30,594,380 20,558,573 1,792,464 8,243,343 276,412,361 154,037,420 21,052,267 101,322,674 68,399,933 41,019,870 4,699,981 22,680,082 51,512,290 31,514,822 5,887,348 14,110,120 Employment Impact (jobs) 1,974 917 131 926 1,674 724 170 780 2,388 1,192 148 1,048 1,283 747 130 406 1,960 940 93 927 778 349 58 371 5,880 2,661 405 2,814 1,559 679 106 774 1,168 555 144 469 (continued) 19 Table 2 (continued) Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2008 Fiscal Year Institution Initial Spending (current dollars) Output Impact (current dollars) Southern Polytechnic State University 105,132,117 Personal Services 30,315,999 Operating Expenses Student Spending 22,234,182 52,581,936 161,098,522 61,295,221 30,212,111 69,591,190 University of West Georgia Personal Services Operating Expenses Student Spending State Colleges 227,326,185 63,545,064 35,360,001 128,421,120 346,490,877 128,480,304 48,047,661 169,962,912 Abraham Baldwin Agricultural College Personal Services Operating Expenses Student Spending 70,341,318 16,616,427 12,928,035 40,796,856 87,000,067 30,464,269 14,244,549 42,291,249 Dalton State College Personal Services Operating Expenses Student Spending 77,781,620 19,025,724 12,170,168 46,585,728 96,010,983 34,506,214 13,072,478 48,432,291 Gainesville State College Personal Services Operating Expenses Student Spending 127,337,889 24,555,330 19,731,135 83,051,424 180,103,503 48,353,029 25,591,536 106,158,938 Georgia Gwinnett College Personal Services Operating Expenses Student Spending 34,535,383 16,180,439 9,041,360 9,313,584 57,326,734 32,714,857 12,285,526 12,326,351 Gordon College Personal Services Operating Expenses Student Spending 69,215,003 14,829,323 13,152,528 41,233,152 102,426,200 29,983,067 17,871,838 54,571,295 Macon State College Personal Services Operating Expenses Student Spending 127,251,812 27,892,516 29,526,496 69,832,800 170,379,108 52,971,135 34,879,217 82,528,756 Middle Georgia College Personal Services Operating Expenses Student Spending 79,891,516 17,076,394 23,921,178 38,893,944 97,118,775 30,929,284 25,731,562 40,457,929 Value Added Impact (current dollars) 98,918,631 45,250,405 12,274,684 41,393,542 215,465,542 94,848,923 19,520,971 101,095,648 Labor Income Impact (current dollars) 67,216,187 38,123,351 7,625,798 21,467,038 144,466,672 79,909,977 12,127,642 52,429,053 Employment Impact (jobs) 1,317 574 147 596 3,127 1,438 233 1,456 48,169,601 21,586,545 2,885,439 23,697,617 54,753,316 24,498,316 2,532,646 27,722,354 106,739,377 35,264,243 9,106,191 62,368,943 36,474,565 24,151,321 4,991,406 7,331,838 61,855,200 22,134,612 7,261,032 32,459,556 95,991,633 38,319,624 10,715,027 46,956,982 49,467,950 21,823,532 5,426,158 22,218,260 32,747,392 18,964,427 1,905,451 11,877,514 37,059,573 21,555,438 1,668,841 13,835,294 67,944,294 29,971,445 5,977,232 31,995,617 27,250,751 20,347,426 3,100,972 3,802,353 39,993,158 18,648,355 4,511,005 16,833,798 63,542,708 33,098,607 6,520,752 23,923,349 33,791,900 19,277,388 3,352,206 11,162,306 1,038 463 59 516 1,053 472 46 535 1,570 494 123 953 542 376 60 106 902 347 87 468 1,633 587 165 881 996 413 99 484 (continued) 20 Table 2 (continued) Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2008 Fiscal Year Institution Associate Degree Colleges Initial Spending (current dollars) Output Impact (current dollars) Atlanta Metropolitan College Personal Services Operating Expenses Student Spending 40,541,818 10,354,625 8,189,225 21,997,968 61,178,304 20,935,778 11,127,633 29,114,893 Bainbridge College Personal Services Operating Expenses Student Spending 51,399,412 11,074,820 10,742,960 29,581,632 61,145,963 19,943,908 11,633,609 29,568,446 Coastal Georgia Community College Personal Services Operating Expenses Student Spending 53,718,367 13,778,802 11,542,165 28,397,400 71,556,586 25,600,746 13,243,746 32,712,094 Darton College Personal Services Operating Expenses Student Spending 84,322,273 20,021,553 15,534,784 48,765,936 111,007,786 37,713,401 18,134,148 55,160,237 East Georgia College Personal Services Operating Expenses Student Spending 40,081,000 6,952,074 9,089,398 24,039,528 49,752,756 12,781,637 10,214,599 26,756,520 Georgia Highlands College Personal Services Operating Expenses Student Spending 77,591,993 17,036,195 12,835,446 47,720,352 100,388,020 31,793,221 14,702,599 53,892,200 Georgia Perimeter College Personal Services Operating Expenses Student Spending 359,010,102 82,604,255 49,647,679 226,758,168 534,587,745 167,015,643 67,461,962 300,110,140 South Georgia College Personal Services Operating Expenses Student Spending 37,538,009 8,308,068 8,654,069 20,575,872 46,618,428 15,200,724 9,415,433 22,002,271 Value Added Impact (current dollars) Labor Income Impact (current dollars) Employment Impact (jobs) 37,293,778 15,455,568 4,520,973 17,317,237 32,147,883 13,874,010 2,344,247 15,929,626 40,140,965 18,283,977 3,422,385 18,434,603 63,005,484 27,043,633 4,735,316 31,226,535 26,165,562 9,064,802 2,569,324 14,531,436 57,356,454 22,849,087 4,210,272 30,297,095 329,214,355 123,297,141 27,408,680 178,508,534 24,516,244 10,716,805 1,930,939 11,868,500 24,810,851 13,021,276 2,808,710 8,980,865 21,596,013 12,291,622 1,451,655 7,852,736 27,379,137 15,908,366 2,210,269 9,260,502 42,645,177 23,509,527 3,079,731 16,055,919 16,694,937 7,939,875 1,549,410 7,205,652 37,413,138 19,849,089 2,479,089 15,084,960 213,481,530 103,877,527 17,027,977 92,576,026 16,632,475 9,452,704 1,223,853 5,955,918 533 230 54 249 957 498 54 405 690 282 60 348 1,163 449 91 623 540 166 46 328 1,100 452 66 582 4,663 1,764 328 2,571 510 193 38 279 (continued) 21 Institution Table 2 (continued) Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2008 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 16,268,681 20,633,188 11,325,609 7,727,417 233 3,948,722 7,230,052 5,098,615 4,492,030 96 3,050,895 3,347,660 734,220 464,313 14 9,269,064 10,055,476 5,492,774 2,771,07 4 123 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 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), March 16, 2009. 22 Table 3 Institution On-Campus and Off-Campus Jobs that Exist Due to Institution-Related Spending in the 2008 Fiscal Year Off-Campus Jobs that Exist Due to Total Employment On-Campus Institution-Related Impact Jobs Spending System Total 108,405 41,770 66,635 Research Universities and Regional Universities 63,567 27,000 36,567 Georgia Institute of Technology Georgia State University Medical College of Georgia University of Georgia Georgia Southern University Valdosta State University 15,294 11,379 8,693 19,415 5,470 3,317 6,320 4,460 4,647 8,739 1,779 1,055 8,974 6,919 4,046 10,676 3,691 2,262 State Universities 26,715 9,228 17,487 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 State University of West Georgia 1,597 2,012 1,974 1,674 2,388 1,283 1,960 778 5,880 1,559 1,168 1,317 3,127 615 689 692 506 929 548 737 267 1,913 491 402 389 1,050 982 1,323 1,282 1,168 1,459 735 1,223 511 3,967 1,068 766 928 2,077 State Colleges 7,733 2,409 5,324 Abraham Baldwin Agricultural College Dalton State College Gainesville State College Georgia Gwinnett College Gordon College Macon State College Middle Georgia College 1,038 1,053 1,570 542 902 1,633 996 379 659 390 663 357 1,213 277 265 256 646 421 1,212 329 667 Associate Degree Colleges 10,389 3,133 7,256 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 533 957 690 1,163 540 1,100 4,663 510 233 166 448 213 330 129 361 1,260 150 76 367 509 477 833 411 739 3,403 360 157 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), March 16, 2009. 23 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 Associate Degree 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), March 16, 2009. 24 Institution System Total Appendix 2 Economic Impact of Capital Outlays in Fiscal Year 2008 Initial Spending (2008 dollars) Output Impact (2008 dollars) Value Added Impact (2008 dollars) 1,065,513,047 1,760,801,877 928 ,327,372 Labor Income Impact (2008 dollars) 694,063,390 Employment Impact (jobs) 16,267 Research Universities and Regional Universities 520,604,285 847,481,588 444,364,837 332,477,750 7,905 Georgia Institute of Technology Georgia State University Medical College of Georgia University of Georgia Georgia Southern University Valdosta State University State Universities 76,795,000 113,320,000 5,000,000 93,284,285 69,000,000 163,205,000 412,348,762 132,403,683 202,311,215 8,398,370 161,197,313 98,738,696 244,432,311 704,094,774 70,060,021 111,720,200 4,534,035 90,178,069 44,980,073 122,892,439 376,123,802 50,288,177 84,307,582 3,733,702 68,388,308 33,041,681 92,718,300 279,809,672 1,076 1,778 78 1,402 1,014 2,557 6,283 Albany State University 0 Armstrong Atlantic State University 24,260,000 Augusta State University 0 Clayton State University 42,450,000 Columbus State University 0 Fort Valley State University 55,095,000 Georgia College & State University 9,385,000 Georgia Southwestern State University 11,648,762 Kennesaw State University 156,325,000 North Ga College & State University 2,000,000 Savannah State University 35,675,000 Southern Polytechnic State University 20,605,000 State University of West Georgia 54,905,000 State Colleges 110,715,000 0 40,302,164 0 74,591,990 0 88,272,657 12,520,823 15,964,079 276,953,783 2,988,934 57,906,193 37,965,607 96,628,544 174,564,173 0 21,070,774 0 40,295,652 0 45,441,709 6,405,166 7,433,457 150,922,032 1,947,267 29,329,694 20,258,708 53,019,343 90,248,880 0 16,214,203 0 29,641,156 0 34,662,052 4,817,220 5,436,439 112,129,462 1,096,210 21,823,325 15,278,641 38,710,964 68,171,743 0 400 0 629 0 889 138 157 2,373 20 545 322 810 1,702 Abraham Baldwin Agricultural College 0 0 0 0 0 Dalton State College 7,240,000 10,160,808 5,056,307 3,918,654 112 Gainesville State College 5,435,000 9,431,579 5,269,603 3,998,536 81 Georgia Gwinnett College 34,500,000 61,970,968 34,256,576 25,861,540 545 Gordon College 0 0 0 0 0 Macon State College 27,200,000 44,280,970 23,018,754 17,742,789 465 Middle Georgia College 36,340,000 48,719,848 22,647,640 16,650,224 499 Associate Degree Colleges 21,845,000 34,661,342 17,589,853 13,604,225 377 Atlanta Metropolitan College 0 0 0 0 0 Bainbridge College 0 0 0 0 0 Coastal Georgia Community College 0 0 0 0 0 Darton College 21,845,000 34,661,342 17,589,853 13,604,225 377 East Georgia College 0 0 0 0 0 Georgia Highlands College 0 0 0 0 0 Georgia Perimeter College 0 0 0 0 0 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 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. 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), March 16, 2009. 25 ICAPP Intellectual Capital Partnership Program The Economic Development Program of the University System of Georgia www.icapp.org 26