Students at UTSA 1604 Campus
IED releases UT System economic impact study
(March 11, 2005)--The UTSA Institute for Economic Development (IED) released March 9 a study on the economic impact of the University of Texas System on the Texas economy. The study analyzed the short-term economic impact of UT System institutions on their host regions by assessing FY2004 operational expenditures, capital purchases and construction, faculty/staff expenditures and student expenditures. Findings included a total economic impact on the Texas economy of $12.8 billion and 215,700 jobs in FY2004.
The study shows that UTSA, which enrolled more than 26,000 students in fall 2004, has an impact on the San Antonio area economy of approximately $600 million each year, while the university contributes more than $1.25 billion to the economy of Texas.
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"This study demonstrates that even by the most conservative standards, the UT System has a tremendous impact on the Texas economy. But I think we all realize that it is difficult to put a firm dollar figure to the System's contribution to Texas and its economy," said UT System Chancellor Mark G. Yudof. "The true wealth of Texas lies in education and research -- in the minds that we nurture and the advances they create for all of us. They are infinitely renewable resources that we are proud to help develop."
The institutions of the UT System have a huge employment impact on Texas. On average, for every on-campus job that exists, an additional 1.5 jobs are added because of institutional related spending, the study says. The combined employment impact of all 15 institutions on their host regions was 215,500 jobs.
The future earnings of graduates from the UT System institutions also have a profound effect on the state's economy. For every $1 dollar the state invests in UT System higher education, that dollar serves as a catalyst for, and ultimately results in, an additional $24 dollars of gross work-life incremental earnings that go into the Texas economy, according to the study. Graduates can look forward to increased incremental earnings from a college degree: a bachelor's degree recipient would typically add over $1 million beyond the baseline average for a high school degree.
"The UT System's economic impact exceeds $12.8 billion annually along with 215,700 jobs in Texas, and further contributes to our prosperity with 35,000 graduates every year," said Robert McKinley, lead investigator of the study. "With each successive class of new workforce entrants fulfilling their higher potential, and leading our knowledge-based industry growth, Texas can compete and win in the global marketplace."
Construction on UT campuses is another major factor impacting the state's economy. Capital expenditures in fiscal year 2004 contributed an estimated $2 billion in local regions. During the next six years, UT institutions are projected to spend an estimated $5 billion on construction projects, and with additional expenditures resulting from those purchased, the combined impact of that construction will be $7.7 billion.
A group of expert advisers worked with the study's research team in developing the report. Those advisers included Texas economist Ray Perryman and state demographer Steve Murdock, who is the Lutcher Brown Professor of Demography in the UTSA College of Business and director of the UTSA Institute for Demographic and Socioeconomic Research and the Texas State Data Center.
"The researchers have utilized a widely accepted methodology for assessing the impacts of a university, although one that does not fully capture all economic interactions. I consider this a significant but conservative assessment of the overall annual economic impacts of the University of Texas System," said Perryman. "When coupled with the long-term effects of improving the education of Texans, these results show that the University of Texas System has an important and significant impact on the economic development of the state of Texas."
The UT System has an annual operating budget of $8.5 billion (FY 2005). Student enrollment exceeded 182,000 in the 2004 academic year. The UT System confers one-third of the state's undergraduate degrees and educates three-fourths of the state's health care professionals annually. With more than 76,000 employees, the UT System is one of the largest employers in Texas.
Read the IED study executive summary and full report: http://www.iedtexas.org/iedSpotlight6.htm