Higher Education Has Major Impact on Valley Economy
From: Public Affairs
A recently released study sanctioned by Grow by Degrees, a campaign of the Virginia Business Higher Education Council, provides an unprecedented look at the large impact of Virginia's public colleges, universities and community colleges on Virginia's economic output, job creation and state tax revenues.
The study demonstrates that for every dollar the state spends on the public higher education system, it generates $13.31 of economic activity and $1.39 in increased tax revenues that flow back to the state. Regional data in the study was highlighted yesterday at a briefing held at James Madison University.
The study is the first comprehensive analysis of the economic impact of Virginia's public higher education system. The study also measured the projected impact of the proposal by the VBHEC campaign to award 70,000 cumulative additional associate, bachelor's and graduate degrees in Virginia by 2020.
The study's key Shenandoah Valley findings are that public higher education is responsible for:
- $2.29 billion in annual contribution to the state's gross domestic product
- 10 percent of total GDP in Virginia attributed to higher education
- 10,221 jobs created by higher education operations
- $250 million in annual tax revenues generated for Virginia
"The valley makes a huge contribution to the investment in Virginia's future, as well as a tangible financial impact on existing revenues for the commonwealth," said VBHEC member Jay Poole. "There are many unique workforce initiatives through higher education partnerships in the valley and we want to continue to promote these opportunities."
The economic impact study is based on 2007 data and all numbers are expressed in 2007 dollars. The study measured the impact of higher education expenditures as well as the economic benefits that flow from investing in human capital (the increased earning power and spending by college graduates). The full study is available at www.growbydegrees.org
. Among other findings:
- $1.58 billion in Virginia GDP is generated by the spending that higher education produces in Virginia by persons and entities located outside the state (34,833 Virginia jobs)
- $588 million in Virginia GDP is generated by higher education research and development programs (12,927 jobs - $72 million in state tax revenues)
The economic impact study clearly shows that higher education spending has a positive impact on all Virginians. Further, if Virginia can reach Grow by Degrees' goal of awarding 70,000 cumulative additional degrees over the next decade, the economic results will be compelling:
About the Grow by Degrees coalition:
- $18 billion more in Virginia GDP
- $16 billion in increased personal income for Virginians
- $1.9 billion in new tax revenues for state government
The coalition is comprised of business, community, education and economic development leaders and organizations from through Virginia. Though they reflect a variety of perspectives and backgrounds, coalition members share a conviction that Virginians, regardless of income, should have access to the broader economic horizons opened by a college education. They also share a belief that only a sustained program of investment and innovation in higher education - embodied in state law and in the business plans of our education institutions - will make Virginia a national and international leader in attracting new business investment, research grants and excellent job opportunities in the new economy.
About the Virginia Business Higher Education Council:
VBHEC was founded in 1994 by Virginia business leaders on the principle that the prosperity of Virginia and the well-being of its citizens is fundamentally tied to access to a strong system of public colleges and universities. A nonprofit, nonpartisan partnership between Virginia's business community and higher education leadership, VBHEC's mission is to enhance the performance of Virginia's public colleges, universities and community colleges and their funding by state government so they can produce the greatest possible positive impact on Virginia's economy. VBHEC is committed to educating the public about higher education's crucial role in Virginia's economy and it strives to secure the support needed for the commonwealth's colleges, universities and community colleges to rank among the nation's best.
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Nov. 3, 2009