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Higher ed a solid investment, study shows

Higher education in North Carolina got some good news with the release of an economic impact study last week, which put its collective economic impact during 2012-13 at $2 billion in the 11 western counties and $63.5 billion statewide.

“That is the power of public higher education. That is the return on investment that your community colleges and state universities provide,” said David Belcher, chancellor of Western Carolina University, at a standing-room-only presentation to the Asheville Chamber of Commerce last week. 

The study, completed by Idaho-based Economic Modeling Specialists International, looked at the ripple effects that bubble through a region when a college or university is present. Categories considered included visitor and student spending, the new businesses and higher incomes created by alumni, research and impacts from spending on construction and operations. 

“I think the real message here is the fact that higher education, regardless of sector, they all contribute and they all add a significant amount of human capital to the workforce,” said Aaron Olanie, director of economic impact studies for EMSI.

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To arrive at the numbers, Olanie said, EMSI gathered data on everything from the value of alumni-started businesses to the restaurant and hotel spending of parents coming to visit campus to the value of university research in a community. Then, out of that gross figure the analysts subtracted the impact they estimated tax dollars would have had in the community without a college or university present. 

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“We’re basically doing an intellectual exercise where we’re imaging a scenario without the university there,” Olanie said. 

For example, if Western Carolina University didn’t exist, people in the Cullowhee area would still receive some measure of benefit from state tax dollars spent in another way. EMSI created a model to estimate what that impact would be and backed it out of the total estimated impact of the university’s existence. 

According to the study, WCU adds $901.8 million of economic value statewide and $511.3 million in the 11-county area. In terms of local impact, the biggest punch came from alumni, whose effects on the region accounted for $266.7 million of the total, quite a bit more than the next-closest category, operations spending, which accounted for $166.7 million. 

As a university enrolling more than 10,000 students, WCU’s numbers were the highest of those in the western counties. But the contributions of smaller institutions of higher learning were by no means paltry. 

Southwestern Community College, for example, was shown to contribute $126.9 million to the 11-county region. For SCC as well, alumni — 90 percent of whom continue to live and work in the area after graduation — accounted for the bulk of that number, producing $109.2 million in economic impact.  

“It doesn’t surprise me that our alumni have such a positive effect on our region,” said SCC President Don Tomas. “Our alumni make up a large portion of our service-oriented jobs.”

Haywood Community College likewise put out $92.8 million in economic impact, $77.9 million of which came from its alumni. 

“I am extremely proud of the impact that Haywood Community College has had on the residents, workforce and economy of Haywood County,” said HCC President Barbara Parker. “Here at HCC, we work hard to provide a pipeline for employers and promote educational programs that directly correlate with the needs of our community.”

The numbers provide solid grounds for university workers to give themselves a pat on the back, but that’s not the extent of their importance. In a post-recession climate where funding is still tight, Belcher said, “This is a powerful piece of information.”

“It’s not just about, ‘Give us money,’” he said. “It’s about, ‘Invest in us in these specific, strategic ways, and we will turn that around.’”

Colleges and universities produce alumni who go on to start businesses and work in skilled positions. People with that education also have higher lifetime earnings and more disposable income to sink back into the regional economy. And even those who don’t stay in the area after graduation tend to return to visit their alma mater, spending tourism dollars when they do. 

During school, as well, students who are still learning about their fields bring value to the community through internships, volunteer efforts and work.  

The EMSI study showed that every state and local taxpayer dollar spent at WCU in 2012-13 returned $5.40 in tax revenues and savings in the public sector. For SCC, that number was $3.80. For HCC, it was $2.80.

The state Legislature has done some good things for WCU over the last few years, Belcher said. For example, they provided $1.4 million to expand the university’s engineering program to its Asheville campus. 

But at the same time, the university — like other institutions of higher learning in North Carolina — has taken what Belcher termed “big cuts,” losing $40 million since 2008 even as enrollment has increased by 34 percent between 2003 and 2013. 

“Higher education is alive and well in North Carolina because it’s been so strong,” said Rep. Joe Sam Queen, D-Waynesville, who attended the Asheville event. “The current funding is not competitive with the goals we have.”

With this study in hand, Belcher said, North Carolina’s colleges and universities will have a more convincing argument as to why they should receive funding. 

“Investing in us makes a huge difference locally,” he said. “It helps us to make that case.”

 

By the numbers

Western Carolina University contributed $511.3 million in economic impact, the equivalent of 10,475 new jobs, or 2.7 percent of the gross regional product of the university’s service region.

Southwestern Community College contributed $129.6 million in economic impact, the equivalent of 3,128 new jobs, or 5.4 percent of the gross regional product of the college’s service region.

Haywood Community College contributed $92.8 million in economic impact, the equivalent of 2,474 new jobs, or 6 percent of the gross regional product of Haywood County. 

Source: Economic Modeling Specialists International. Numbers based on the 2012-13 academic year. 

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