System generates $6.7B annual impact; returns $11 for every tax dollar
HARRISBURG, Pa. - Pennsylvania's State System of Higher Education, which comprises the commonwealth's 14 public universities, generates more than $6.7 billion annually in economic activity, and, in addition to its own 12,000 employees, supports about 62,000 external jobs statewide, many with the hundreds of small businesses that thrive in and around the campus communities, according to a new study released today.
In the simplest terms, the state system produces nearly $11 in economic impact for every $1 invested by the commonwealth through its annual appropriation.
Slippery Rock University has a total direct economic impact of $227,279,453, and an overall total economic impact of $333,284,522.
"That's a tremendous return on investment," said system Chancellor Frank Brogan. "Taxpayers should be pleased. This is a benefit that goes beyond the high-quality, high-value education the universities provide to students, the vast majority of whom remain in Pennsylvania after graduation, providing the lifeblood of the state's economy."
That is only part of the story.
Nearly 90 percent of the students who attend the state system universities are Pennsylvania residents; almost 80 percent of those will stay here after receiving their degrees to live, to work and to raise their families. Nearly 520,000 state system university alumni live in Pennsylvania. They are community and civic leaders who serve their neighbors and the commonwealth in every walk of life.
"The connection between the state system and Pennsylvania's economic vitality is unmistakable," said Guido Pichini, chairman of the state system's board of governors. "From the direct impact the universities have in their communities, where they are the economic engines that drive their local economies, to the ripple effect across the state, their impact on the state's economic climate is tremendous."
Most of the 14 state system universities are situated in rural communities and small towns; seven rank among the Top 10 employers in their respective home counties. Counting branch campuses, the state system has a direct presence in 21 of Pennsylvania's 67 counties.
"As a result of a large geographic reach across the state, the state system plays a key role in stimulating the economies of the counties that each university resides in," the study, which was conducted by Baker, Tilly, Virchow, Krause, LLP, concludes.
"The state system directly impacts the regional economies by injecting millions of dollars into Pennsylvania's economy on local, county and state levels. Additionally, the presence of the state system universities enhances workforce development and therefore impacts employment opportunities, not only for the students, but for those who reside in the surrounding communities." To view the complete study, visit: http://www.passhe.edu/FactCenter/Documents/EconomicAndEmploymentImpactReport.pdf.
The total economic impact of the state system itself is $4.4 billion, most of which comprises spending by the universities, their nearly 110,000 students and approximately 12,000 faculty and staff. Another $2.3 billion is generated through jobs that exist because of the presence of the universities. Each university has an average economic impact of $310.2 million and supports about 4,400 external jobs.
Students, faculty and staff of the universities pay a combined $61.1 million in state income and sales taxes; those whose jobs are supported by the state system pay another $121 million.
When all of the figures are combined, the total economic and employment impact is about $6.7 billion. The system will receive $412.8 million from the state this year to support the universities' daily operations and another approximately $65 million for capital construction.
None of the figures include the impact of the system's more than half- a-million alumni living in Pennsylvania on the state's economy, either in terms of the number of jobs they hold, the number of businesses they operate or the income and sales tax revenue they generate for the commonwealth. The total impact, with alumni included, would be much higher.
The state system helps support the state's economy in other ways, as well.
The universities contribute significantly to workforce development in the commonwealth, maintaining relationships with almost 350 local businesses, helping to provide them with the tools and resources they need to be successful.
A Pennsylvania resident with a degree from a state system university earns 71 percent more than a high school graduate, helping to provide the skilled workforce Pennsylvania needs to maintain a strong economy.
Karl E. Schwab