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 1 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. 2 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. 3 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 4 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. 5 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. 6 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. 7 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. 8 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. 9 Figure 1 Schematic Representation of Impact Relationships Direct Expenditures + Indirect and Induced Impacts (Multiplier Effects) = ^ Total Direct Economic Impact 10 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. 11 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. 12 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) 13 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