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The four public colleges and universities in Northern Colorado added $2.4 billion in income to the economy of Larimer and Weld counties and provided an impressive return on investment to the region in fiscal year 2015-16, according to the results of a new economic impact study released today.
The Northern Colorado Public Colleges and Universities (NoCoPCU) in the economic value study are Aims Community College, Colorado State University, Front Range Community College and the University of Northern Colorado. The study, conducted by Emsi, measured the overall regional economic impact of NoCoPCU, and also the return on investment for students and taxpayers in Weld and Larimer counties.
The regional economic impact part of the study considered a variety of factors, including the FY15-16 academic and financial reports from NoCoPCU, industry and employment data from the U.S. Bureau of Labor Statistics and U.S. Census Bureau, outputs of Emsi’s Social Accounting Matrix (SAM) model, and a variety of studies and surveys relating education to social behavior.
While CSU’s broader economic impact reaches across the entire state and beyond, this two-county regional look provides hard data about the importance of higher education to the Northern Colorado economy.
“While many people focus on what we invest in our state’s colleges and universities, higher education is actually a long-term revenue source for the state,” Colorado State President Tony Frank said. “Individual students certainly gain from their education, but our state and regional economies also benefit tremendously from the jobs, innovation and research generated by our campuses – and the educated workforce that our graduates represent. This study reinforces the importance of all those benefits to our Northern Colorado region.”
Highlights of the economic impacts of NoCoPCU for Larimer and Weld counties include:
● The net impact of institutions’ day-to-day operations in the Larimer and Weld economy (payroll, expenses and employee spending) during the analysis year was approximately $676.8 million in added income, or 9,986 jobs.
● NoCoPCU’s research spending generated $172.7 million, or 2,894 jobs for the region.
● The net impact of NoCoPCU’s construction spending in FY2015-16 was $78.9 million, or 1,354 jobs.
● Start-up companies generated $35.8 million, or 548 jobs.
● Spending by students – those who relocated or stayed in the region, and who wouldn’t be in the region if not for the institutions, added approximately $159.6 million, or 2,428 jobs.
● Contributions from alumni currently employed in the regional workforce amounted to $1.3 billion, or 22,467 jobs.
● This combined total equates to a $2.4 billion impact, or 39,677 jobs for Larimer and Weld counties’ economy during FY15-16.
The study also included an investment analysis that looked at the total $14 billion NoCoPCU received in FY 2015-16 through tuition and fees, government student aid, and other all other revenue, as provided by students, taxpayers and society.
The study indicates that in return for their investment in the institutions – $1 billion in fees, books and supplies, as well as foregone wages had they been working – students will receive a present value of $3.2 billion in increased earnings over their working lives. This translates to a return of $3.10 in higher future earnings for every $1 that students invest in their education. The average annual return for students is 10.9 percent. The study notes this “impressive return” far outpaces the average 7.2 percent return investors see in the U.S. stock market.
In FY15-16, state and local taxpayers in Colorado paid $231.4 million to support the operations of NoCoPCU. The net present value of the added tax revenue stemming from the students’ higher lifetime earnings, and the increased output of businesses, amounts to $1 billion in benefits to taxpayers.
Savings to the public sector add another $305 million in benefits due to the reduced demand for government-funded services in Colorado. For every dollar state and local taxpayers invest in NoCoPCU, they will receive $5.80 back over the course of the FY15-16 students’ working lives. This translates to a rate of return of 33.6 percent.
Society as a whole in Colorado will receive a present value of $11.8 billion in added state earnings over the course of the students’ working lives. Society will also benefit from $1.7 billion in present-value social savings related to reduced crime, lower unemployment, and increased health and well-being across the state.
For every dollar that society spent on NoCoPCU educations during the analysis year, society will receive a cumulative value of $6.30 in benefits, for as long as the FY15-16 student population remains active in the state workforce.
Emsi, a CareerBuilder company, is a leading provider of economic impact studies and labor market data to educational institutions, workforce planners and regional developers in the U.S. and internationally. Since 2000, Emsi has completed more than 1,700 economic impact studies for educational institutions in four countries.
The full Emsi report is available online.