The economic impact of University System of Georgia institutions on their regional economies in fiscal year 2009: a needs assessment study

The Economic Impact of University System of Georgia Institutions
on their Regional Economies in FY 2009
April 2010
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
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The Economic Impact of University System of Georgia Institutions on their Regional Economies in FY 2009
Executive Summary The statewide economic impact of the University System of Georgia's 35 institutions in fiscal year 2009 includes: n $12.7 billion in output (sales); n $7.6 billion in gross regional product; n $5.7 billion in income; and n 112,336 full- and part-time jobs (2.8 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 off-campus 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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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 input-output 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 2009 fiscal year--July 1, 2008 through June 30, 2009.
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.
Economic Impact Highlights
In the simplest terms, the total economic impact of all 35 institutions on their host communities was $12.7 billion in FY 2009. 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 2009 total, $8.4 billion (66 percent) is initial spending by the institutions and students; $4.3 billion (34 percent) is the induced or re-spending (multiplier) impact. Dividing the FY 2009 total output impact ($12.7 billion) by initial spending ($8.4 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 2009, value added comprises $7.6 billion (60 percent) of the $12.7 billion output impact, with domestic and foreign trade comprising the remaining $5.1 billion (40 percent). The $7.6 billion value-added impact equals 1.9 percent of Georgia's state GDP. Labor income received by residents of the communities that host one or more institutions equals $5.7 billion, and represents 75 percent of the value-added impact.
The collective or rolled-up employment impact of all 35 institutions on their host communities in FY 2009, including multiplier effects, is 112,336 full- and part-time jobs. Approximately 38 percent of these positions are on campus (University System employees) and 62 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 112,336 jobs generated by the University System account for 2.8 percent of all the jobs in Georgia in 2009, or about one job in thirty-six.
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n Short-Term Economic Impact Of a College or University n

Methodology

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 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 re-spending, 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

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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.
n Analytic Approach n
Estimating the economic impact of the University System of Georgia institutions on their regional economies in FY 2009 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 modeling system was used to build regional economic models that are specific to each institution.
The geographic areas corresponding to the regional models that were built for each institution, which include the labor force directly involved in their economic spheres, are reported in Appendix 1. These geographic areas are based on an analysis of commuting patterns data obtained from Census 2000 (Residence County to Workplace County Flows for Georgia, U.S. Census Bureau, Internet Release Date: March 6, 2003).
For analytical purposes, all dollar amounts were converted to inflation-adjusted dollars, but the amounts expressed in this report are in 2009 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-to-people 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, 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.
n Initial Spending by the Institutions n
Institution-specific data on expenditures for personnel services and number of positions were obtained from the Board of Regents for FY 2009. 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 (non-personnel services) for FY 2009 were obtained from the Board of Regents for FY 2009. 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.
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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 2009. 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 2009 capital project impacts therefore are not directly comparable to those for FY 2004 or earlier fiscal years.
The Medical College of Georgia is opening clinical campuses in Albany and Savannah, which eventually will generate significant economic impacts for their host communities. Although these campuses are in their earliest stages of development, and students are not yet enrolled, Appendix 3 documents the economic impact that the two campuses had on their host communities in FY 2009, and provides base levels of economic impact that may be useful for future reference.
n Students' Personal Expenditures n
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 2008, $6,360 for Fall 2008, and at $6,360 for Spring 2009.
The final step in estiating students' personal expenditures was to multiply the number of semesters of student spending by the average spending per semester. For FY 2009, 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.
Results
This section describes the economic benefits that the University System of Georgia's 35 institutions conveyed to their host communities in FY 2009. 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 2009 dollars.
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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 2009 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 2009, total initial spending for all 35 institutions was $8.4 billion. Spending originating from personnel services accounted for 37 percent ($3.1 billion) of initial spending, spending due to operating expenses accounted for 23 percent ($1.9 billion) of initial spending, and students' personal expenditures accounted for 40 percent ($3.4 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 2009 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 $12.7 billion in FY 2009 (Table 1). This amount represents the combined impact of all 35 institutions on their host communities. Of the FY 2009 output impact, $8.4 billion (66 percent) was initial spending by the institutions and students, while $4.3 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 2009 was 1.51, obtained by dividing the total output impact ($12.7 billion) by initial spending ($8.4 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 have the largest budgets, staffs, and enrollments--had the largest economic impacts. Thus, for the most part, institutions with large initial spending will rank highly on the various indicators of economic impact, including value-added, labor income, and employment impact described in the 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 2009 are reported in the third column of Tables 1 and 2.
The 35 institutions collectively generated a value-added impact of $7.6 billion in FY 2009. For all institutions combined, the value-added impact equaled 90 percent of initial spending and 60 percent of the $12.7 billion output impact (with domestic and foreign trade comprising the remaining 40 percent of the output impact). The $7.6 billion value-added impact reported for FY 2009 equals 1.9 percent of Georgia's gross state product.
Labor Income Impact
Collectively, the 35 University System institutions generated a labor income impact of $5.7 billion in FY 2009. The labor income received by residents of the communities that host University System institutions represents 75 percent of the value-added impact and 68 percent of the initial spending. Labor income for each institution is reported in the fourth column of Table 2.
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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 112,336 jobs in FY 2009. Approximately 38 percent of these positions are on-campus jobs at one of the institutions of the University System of Georgia, and 62 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 2.8 percent of all the jobs held by Georgians, or about one job in 36. For all institutions combined, 13.4 jobs were generated for each million dollars of initial spending in FY 2009.
Employment impacts in FY 2009 for the individual institutions are reported in the fifth column of Table 2.
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 universityrelated 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 universityrelated 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.
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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 2009 includes: n $12.7 billion in output (sales); n $7.6 billion in valued added (gross regional product); n $5.7 billion in labor income; and n 112,336 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 and Induced Impacts (Multiplier Effects)

=

^



Total Direct 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

$6.25

Initial 1st

2nd

3rd

4th

5th

6th

7th

Impact

Initial Direct or Indirect Impact: $100 First Round of Re-spending: $50 re-spent locally,
Second Round of Re-spending: $25 re-spent locally, Third Round of Re-spending: $12.50 re-spent locally;
Fourth Round of Re-spending: $6.25 re-spent locally; Fifth Round of Re-spending: $3.12 re-spent locally; Sixth Round of Re-spending: $1.56 re-spent locally;
Seventh Round of Re-spending: $.78 re-spent locally; ____

$50 leakage* $25 leakage $12.50 leakage $6.25 leakage $3.12 leakage $1.56 leakage $.78 leakage ____

Total Economic Impact: $200 Total Leakage: $100

*Leakage indicates amounts spent outside area and not 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 2009 Fiscal Year

Total for All Institutions
in 2009
System Total Personal Services Operating Expenses Student Spending

Initial Spending (current dollars)
8,374,791,691 3,101,862,388 1,885,447,231 3,387,482,072

Output Impact (current dollars)
12,657,003,870 6,075,247,564 2,411,512,439 4,170,243,867

Value Added Impact
(current dollars)
7,579,161,791 4,294,485,757
860,062,079 2,424,613,955

Labor Income Impact
(current dollars)
5,697,082,591 3,914,701,313
540,145,087 1,242,236,191

Employment Impact (jobs)
112,336 60,585 11,629 40,122

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.
Expenditures and impacts for both the Medical College of Georgia and the University 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) April 20, 2010.

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Table 2
Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2009 Fiscal Year


Institution

Initial Spending (current dollars)

Output Impact (current dollars)

Value Added Impact
(current dollars)

Labor Income Impact
(current dollars)

Employment Impact (jobs)

Research Universities and Regional Universities

Georgia Institute of Technology Personal Services Operating Expenses Student Spending

1,291,776,005 631,555,950 412,083,383 248,136,672

2,165,277,349 1,276,928,495
559,944,694 328,404,160

1,365,510,311 942,675,942 227,496,266 195,338,103

1,036,840,896 794,202,077 141,334,840 101,303,979

15,870 10,339
2,718 2,813

Georgia State University Personal Services Operating Expenses Student Spending

867,064,903 309,811,827 211,191,484 346,061,592

1,371,377,312 626,401,432 286,969,938 458,005,942

851,450,448 462,432,752 116,591,146 272,426,550

603,314,784 389,598,414
72,433,674 141,282,696

11,100 5,784 1,393 3,923

Medical College of Georgia Personal Services Operating Expenses Student Spending

638,683,115 382,971,876 212,754,527
42,956,712

1,040,014,657 729,735,739 259,214,946 51,063,972

643,339,485 528,135,771
86,078,437 29,125,277

523,626,798 455,590,095
53,182,941 14,853,762

9,176 7,308 1,348
520

University of Georgia Personal Services Operating Expenses Student Spending

1,406,436,089 633,529,302 336,907,163 435,999,624

2,238,376,140 1,245,928,406
436,257,891 556,189,843

1,254,594,875 772,302,566 154,865,116 327,427,193

1,177,293,489 908,581,504 100,784,277 167,927,708

19,582 12,455
2,121 5,006

Georgia Southern University Personal Services Operating Expenses Student Spending

404,137,256 126,578,616
59,074,832 218,483,808

526,316,751 230,898,215
65,542,389 229,876,147

301,998,013 162,309,433
14,896,694 124,791,886

213,838,887 142,901,547
9,158,489 61,778,851

5,935 2,737
288 2,910

Valdosta State University Personal Services Operating Expenses Student Spending

252,535,578 75,645,587 35,233,711
141,656,280

340,273,321 140,241,639
39,725,131 160,306,551

200,561,502 100,105,931
9,646,333 90,809,238

138,699,055 87,206,872 6,154,577 45,337,606

3,391 1,456
172 1,763

State Universities

Albany State University Personal Services Operating Expenses Student Spending

109,078,589 33,950,861 22,703,520 52,424,208

149,751,789 63,951,205 26,502,396 59,298,188

86,347,857 45,858,312
6,920,491 33,569,054

61,626,770 39,865,472
4,500,914 17,260,384

1,585 783 132 670

Armstrong Atlantic State University Personal Services Operating Expenses Student Spending

151,657,562 43,869,127 25,748,251 82,040,184

215,571,118 83,986,928 32,050,264 99,533,926

129,114,840 60,908,862 10,434,898 57,771,080

88,280,566 52,426,827
6,501,685 29,352,054

2,078 944 159 975

(continued)

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Table 2 (continued)
Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2009 Fiscal Year


Institution

Initial Spending (current dollars)

Output Impact (current dollars)

Value Added Impact
(current dollars)

Labor Income Impact
(current dollars)

Employment Impact (jobs)

Augusta State University Personal Services Operating Expenses Student Spending

137,791,633 40,477,981 18,106,212 79,207,440

193,345,474 77,128,977 22,060,168 94,156,329

116,850,387 55,820,990 7,325,599 53,703,798

80,068,085 48,153,319
4,526,069 27,388,697

2,000 926 115 959

Clayton State University Personal Services Operating Expenses Student Spending

134,329,827 38,607,241 24,447,338 71,275,248

205,609,909 78,059,092 33,219,384 94,331,433

127,231,891 57,626,116 13,496,487 56,109,288

86,033,462 48,549,856
8,384,858 29,098,748

1,697 728 161 808

Columbus State University Personal Services Operating Expenses Student Spending

173,112,559 49,077,141 32,361,106 91,674,312

234,936,001 92,024,324 37,390,669
105,521,008

135,154,858 66,191,816 9,744,907 59,218,135

94,545,284 57,678,134
6,520,440 30,346,710

2,472 1,209
172 1,091

Fort Valley State University Personal Services Operating Expenses Student Spending

104,067,383 35,209,109 29,553,474 39,304,800

148,717,141 67,156,744 35,041,210 46,519,187

85,319,762 48,681,169 10,144,439 26,494,154

62,105,429 42,051,371
6,497,729 13,556,329

1,535 873 169 493

Georgia College & State University Personal Services Operating Expenses Student Spending

158,940,453 51,114,754 26,468,579 81,357,120

200,068,929 91,277,009 27,961,666 80,830,254

114,797,439 64,128,853 5,732,307 44,936,279

82,462,949 56,781,924
3,343,197 22,337,828

2,065 1,008
97 960

Georgia Southwestern State University 61,825,652

78,513,990

44,009,974

31,245,485

822

Personal Services

18,161,277

32,964,643

23,071,909

20,366,640

350

Operating Expenses

10,761,551

11,669,902

2,215,407

1,472,583

48

Student Spending

32,902,824

33,879,445

18,722,658

9,406,262

424

Kennesaw State University Personal Services Operating Expenses Student Spending

457,512,458 133,522,519
61,961,755 262,028,184

700,949,927 269,966,115
84,194,502 346,789,310

439,779,604 199,298,994
34,206,834 206,273,776

296,135,620 167,908,894
21,251,414 106,975,312

6,000 2,620
409 2,971

North Georgia College & State Univ. Personal Services Operating Expenses Student Spending

118,254,141 37,068,926 15,505,495 65,679,720

169,974,247 70,969,786 19,064,613 79,939,848

103,923,072 51,526,702 6,243,093 46,153,277

71,848,328 44,228,728
4,150,943 23,468,657

1,614 719 94 801

Savannah State University Personal Services Operating Expenses Student Spending

94,463,037 28,351,064 23,640,101 42,471,872

136,445,455 54,277,778 29,426,131 52,741,546

79,555,813 39,363,241
9,580,535 30,612,037

55,404,175 33,881,603
5,969,356 15,553,216

1,254 591 146 517

(continued)

14

Table 2 (continued)
Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2009 Fiscal Year


Institution

Initial Spending (current dollars)

Output Impact (current dollars)

Value Added Impact
(current dollars)

Labor Income Impact
(current dollars)

Employment Impact (jobs)

Southern Polytechnic State University 107,707,480

Personal Services

32,452,963

Operating Expenses

17,634,189

Student Spending

57,620,328

165,836,887 65,615,900 23,961,581 76,259,406

103,535,146 48,440,090 9,735,194 45,359,862

70,382,768 40,810,653
6,048,109 23,524,006

1,399 630 116 653

University of West Georgia Personal Services Operating Expenses Student Spending

238,207,070 67,603,682 35,070,516
135,532,872

363,715,813 136,686,328
47,654,306 179,375,179

226,962,237 100,906,916
19,361,158 106,694,163

152,374,664 85,013,820 12,028,356 55,332,488

3,341 1,573
231 1,537

State Colleges



Abraham Baldwin Agricultural College Personal Services Operating Expenses Student Spending

71,205,319 17,025,353 13,517,942 40,662,024

88,259,994 31,213,986 14,894,530 42,151,478

48,754,184 22,117,784
3,017,102 23,619,298

33,261,793 19,431,137
1,992,397 11,838,259

1,009 433 62 514

College of Coastal Georgia

56,206,260

74,408,461

41,001,838

Personal Services

13,772,540

25,589,111

18,275,667

Operating Expenses

13,668,712

15,683,795

4,052,931

Student Spending

28,765,008

33,135,555

18,673,240



Dalton State College

88,396,540

108,627,435

61,609,136

Personal Services

20,974,632

38,040,872

27,007,812

Operating Expenses

14,265,028

15,322,653

2,968,592

Student Spending

53,156,880

55,263,910

31,632,732

27,899,009 15,901,136
2,617,493 9,380,380
41,506,411 23,763,479
1,956,100 15,786,832

704 281
71 352
1,143 479 54 610

Gainesville State College Personal Services Operating Expenses Student Spending

139,398,846 26,688,965 20,127,361 92,582,520

197,001,796 52,554,468 26,105,444
118,341,884

117,167,729 38,352,188 9,289,054 69,526,487

74,340,431 32,575,691
6,097,262 35,667,478

1,838 651 125
1,062

Georgia Gwinnett College Personal Services Operating Expenses Student Spending

51,042,129

83,077,205

52,916,870

38,539,297

787

21,678,000

43,830,249

32,357,115

27,260,787

505

10,870,521

14,771,016

6,001,220

3,728,331

72

18,493,608

24,475,940

14,558,535

7,550,179

210

Gordon College Personal Services Operating Expenses Student Spending

73,606,590 15,854,975 12,837,295 44,914,320

108,943,554 32,056,810 17,443,495 59,443,249

66,109,971 23,665,525
7,087,004 35,357,442

42,677,700 19,938,145
4,402,888 18,336,667

1,052 458 85 509

Macon State College Personal Services Operating Expenses Student Spending

140,884,507 28,330,285 42,534,438 70,019,784

186,797,559 53,802,509 50,245,311 82,749,739

101,439,308 38,921,044 15,435,548 47,082,716

66,998,972 33,618,085
9,393,479 23,987,408

1,738 616 238 884

(continued)

15

Table 2 (continued)
Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2009 Fiscal Year


Institution

Initial Spending (current dollars)

Output Impact (current dollars)

Value Added Impact
(current dollars)

Labor Income Impact
(current dollars)

Employment Impact (jobs)

Middle Georgia College Personal Services Operating Expenses Student Spending

76,021,449

94,904,433

50,729,687

34,915,562

973

18,344,023

33,225,252

23,443,555

20,708,402

404

17,977,034

19,337,558

4,077,818

2,519,446

75

39,700,392

42,341,623

23,208,314

11,687,714

494

Two-year Colleges



Atlanta Metropolitan College

47,478,527

71,098,264

43,058,490

28,365,752

627

Personal Services

11,331,809

22,911,524

16,914,137

14,250,117

264

Operating Expenses

9,827,766

13,354,106

5,425,552

3,370,691

65

Student Spending

26,318,952

34,832,634

20,718,801

10,744,944

298

Bainbridge College Personal Services Operating Expenses Student Spending

60,559,575

70,824,164

35,983,612

23,714,016

804

11,314,539

20,375,603

14,174,318

12,557,679

257

14,702,604

15,921,529

3,208,291

1,986,707

74

34,542,432

34,527,032

18,601,003

9,169,630

473

Darton College Personal Services Operating Expenses Student Spending

88,990,811 21,034,904 15,618,195 52,337,712

117,054,058 39,622,190 18,231,516 59,200,352

66,686,803 28,412,393
4,760,741 33,513,669

45,027,588 24,699,414
3,096,267 17,231,907

1,157 398 91 668

East Georgia College

48,633,858

59,941,799

31,796,844

Personal Services

7,866,668

14,463,151

10,257,341

Operating Expenses

9,643,894

10,837,738

2,726,064

Student Spending

31,123,296

34,640,910

18,813,439



Georgia Highlands College

80,552,326

104,385,577

60,720,310

Personal Services

17,982,425

33,559,090

24,118,179

Operating Expenses

10,176,221

11,656,541

3,337,995

Student Spending

52,393,680

59,169,946

33,264,136



Georgia Perimeter College

387,201,721

574,922,604

352,590,728

Personal Services

86,584,429

175,063,069

129,238,046

Operating Expenses

56,554,836

76,847,501

31,221,869

Student Spending

244,062,456

323,012,034

192,130,813



South Georgia College

38,443,440

48,131,840

25,983,536

Personal Services

9,053,827

16,565,190

11,678,780

Operating Expenses

7,485,773

8,144,353

1,670,263

Student Spending

21,903,840

23,422,297

12,634,493

19,957,307 8,984,421 1,643,931 9,328,955
39,479,282 20,951,553
1,965,476 16,562,253
227,920,347 108,882,726
19,396,968 99,640,653
17,700,155 10,301,209
1,058,633 6,340,313

668 195
49 424
1,185 494 52 639
4,954 1,814
373 2,767
529 200
33 296

(continued)

16

Table 2 (continued)
Total Economic Impact of University System of Georgia Institutions on their Regional Economies in the 2009 Fiscal Year


Institution
Waycross College Personal Services Operating Expenses Student Spending

Initial Spending (current dollars)

Output Impact (current dollars)

Value Added Impact
(current dollars)

Labor Income Impact
(current dollars)

Employment Impact (jobs)

18,589,003

23,552,918

12,575,233

8,651,476

253

4,465,211

8,175,736

5,765,510

5,079,583

104

4,432,424

4,863,572

1,066,694

674,567

21

9,691,368

10,513,610

5,743,029

2,897,326

128

Notes:
The impacts of spending on Output, Value Added, Labor Income, and Employment were estimated using the IMPLAN Professional System 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.
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), April 20, 2010.

17

Table 3
On-Campus and Off-Campus Jobs that Exist Due to Institution-Related Spending in the 2009 Fiscal Year







Total Employment

On-Campus

Institution

Impact

Jobs

Off-Campus Jobs That Exist Due to Institution-Related
Spending

System Total

112,336

42,666

69,670



Research Universities and

65,053

27,520

37,533

Regional Universities



Georgia Institute of Technology

15,870

6,485

9,385

Georgia State University

11,100

3,893

7,207

Medical College of Georgia

9,176

5,092

4,084

University of Georgia

19,582

8,914

10,668

Georgia Southern University

5,935

2,091

3,844

Valdosta State University

3,391

1,045

2,346



State Universities

27,864

9,459

18,405



Albany State University

1,585

582

1,003

Armstrong Atlantic State University

2,078

690

1,388

Augusta State University

2,000

692

1,308

Clayton State University

1,697

492

1,205

Columbus State University

2,472

943

1,529

Fort Valley State University

1,535

657

878

Georgia College & State University

2,065

793

1,272

Georgia Southwestern State University

822

269

553

Kennesaw State University

6,000

1,805

4,195

North Georgia College & State University

1,614

516

1,098

Savannah State University

1,254

427

827

Southern Polytechnic State University

1,399

432

967

State University of West Georgia

3,341

1,161

2,180



State Colleges

9,244

2,944

6,300



Abraham Baldwin Agricultural College

1,009

347

662

College of Coastal Georgia

704

212

492

Dalton State College

1,143

388

755

Gainesville State College

1,838

502

1,336

Georgia Gwinnett College

787

373

414

Gordon College

1,052

361

691

Macon State College

1,738

447

1,291

Middle Georgia College

973

314

659



Two-Year Colleges

10,176

2,743

7,433



Atlanta Metropolitan College

627

195

432

Bainbridge College

804

205

599

Darton College

1,157

273

884

East Georgia College

668

153

515

Georgia Highlands College

1,185

398

787

Georgia Perimeter College

4,954

1,285

3,669

South Georgia College

529

153

376

Waycross College

253

81

172

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), April 20,2010.

18

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 20, 2010.
19

Appendix 2
Economic Impact of Capital Outlays in Fiscal Year 2009


Institution

Initial Spending (2009 dollars)

Output Impact (2009 dollars)

Value Added Impact
(2009 dollars)

Labor Income Impact
(2009 dollars)

Employment Impact (jobs)

System Total

676,585,000

1,124,351,195

597,310,327

442,136,591

9,992



Research Universities and

227,015,000

378,266,137

203,398,137

152,003,501

3,389

Regional Universities



Georgia Institute of Technology

16,400,000

29,458,666

16,284,287

12,293,603

259

Georgia State University

26,650,000

47,870,330

26,461,965

19,977,103

421

Medical College of Georgia

74,150,000

116,858,885

61,288,438

47,350,586

1,188

University of Georgia

101,740,000

171,775,096

94,192,565

68,423,109

1,405

Georgia Southern University

4,000,000

5,951,504

2,405,441

1,860,961

57

Valdosta State University

4,075,000

6,351,656

2,765,441

2,098,139

59



State Universities

251,525,000

415,711,912

220,715,887

162,816,824

3,690



Albany State University

0

0

0

0

0

Armstrong Atlantic State University

31,925,000

51,146,965

25,427,776

18,530,066

466

Augusta State University

0

0

0

0

0

Clayton State University

6,900,000

12,579,368

6,158,190

4,595,919

98

Columbus State University

34,095,000

50,627,113

26,009,864

20,343,338

533

Fort Valley State University

2,850,000

4,292,744

2,624,951

1,618,264

36

Georgia College & State University

0

0

0

0

0

Georgia Southwestern State University

0

0

0

0

0

Kennesaw State University

4,500,000

7,395,429

4,797,472

2,731,705

42

North Georgia College & State Univ.

80,660,000

130,945,032

69,673,849

51,986,807

1,182

Savannah State University

1,900,000

2,868,897

1,847,331

1,042,790

19

Southern Polytechnic State University

78,795,000

138,254,590

74,570,501

54,754,273

1,163

State University of West Georgia

9,900,000

17,601,774

9,605,953

7,213,662

151



State Colleges

162,370,000

281,452,493

150,476,651

109,955,224

2,357



Abraham Baldwin Agricultural College

6,000,000

8,854,932

3,568,461

2,725,652

85

College of Coastal Georgia

1,000,000

1,653,960

875,106

717,825

16

Dalton State College

0

0

0

0

0

Gainesville State College

2,400,000

4,538,130

2,599,928

2,087,689

36

Georgia Gwinnett College

135,570,000

236,096,323

126,315,889

91,873,389

1,957

Gordon College

13,200,000

23,710,630

13,106,863

9,894,850

208

Macon State College

4,200,000

6,598,518

4,010,404

2,655,819

55

Middle Georgia College

0

0

0

0

0



Two-Year Colleges

35,675,000

48,920,653

22,719,652

17,361,042

556



Atlanta Metropolitan College

0

0

0

0

0

Bainbridge College

21,265,000

28,963,188

13,698,467

10,691,492

351

Darton College

0

0

0

0

0

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

14,410,000

19,957,465

9,021,185

6,669,550

205

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 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), April 20, 2010.

20

Appendix 3 Medical College of Georgia's Albany and Savannah Clinical Campuses:
Economic Impact of FY 2009 Expenditures
The Medical College of Georgia is opening clinical campuses in Albany and Savannah, which eventually will generate significant economic impacts for their host communities. Although these campuses are in their earliest stages of development, and students are not yet enrolled, this appendix documents the economic impact that the two clinical campuses had on their host communities in FY 2009, and provides base levels of impact that may be useful for future reference.
In FY 2009, total expenditures at the Albany clinical campus was $131,872, including $123,647 personnel expense and $8,225 operating expense (according to the Assistant Vice Chancellor for Fiscal Affairs/Budget Director, Board of Regents, University System of Georgia).
The economic impact accruing to Albany in FY 2009 includes: n $131,872 in initial expenditures and 3 on-campus jobs, n $242,507 in output (sales), n $169,520 in gross regional product (value added), n $146,819 in income, and n 4 jobs.
Total expenditures at the Savannah clinical campus was $226,534, including $205,901 personnel expense and $20,633 operating expense (according to the Assistant Vice Chancellor for Fiscal Affairs/Budget Director, Board of Regents, University System of Georgia).
The economic impact accruing to Savannah in FY 2009 includes: n $226,534 in initial expenditures and 2 on-campus jobs, n $419,878 in output (sales), n $294,240 in gross regional product (value added), n $251,277 in income, and n 3 jobs.
Although the initial economic impacts are quite small, they will grow rapidly once students are enrolled at these MCG branch campuses.
21