Community colleges generate nearly $6 billion for Colorado

STATEWIDE – A third-party analysis of the economic impact of the Colorado Community College System (CCCS) reveals $5.8 billion in added income to the state in fiscal year 2015-16, equal to approximately 2.0 percent of the Gross State Product of Colorado.

The study also shows that the Colorado Community College System supports nearly 100,000 jobs in the state.

CCCS colleges’ 138,000 students and 7,776 faculty, adjunct instructors, and staff, along with the colleges’ operations spending contributed over $650 million through living expenses and on items such as housing, groceries, dining out, clothing, and other household and leisure expenses.

“As the primary source of higher education for Colorado residents, our colleges create value in many ways and are important drivers of the state’s economic vitality,” said Dr. Nancy McCallin, CCCS president. “We educate Coloradans for high paying careers that significantly increase their standards of living.

We are also employers and buyers of goods and services, and the living expenses of our students and employees benefit local businesses.”

The study was conducted by Emsi, 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.

“Our investigation discovered benefits created by CCCS colleges that extended to the state and local government through increased tax revenues and public sector savings, as well as, positive return-on-investments to students, taxpayers, and society,” said Hannah Ruffridge, Emsi assistant director.

The following are additional highlights from the report:

·  CCCS colleges’ $5.8 billion in added income is comparable to the entire Transportation & Warehousing industry in the state

·  For every dollar spent by CCCS students, $4.30 is gained in lifetime earnings (14.8 percent average annual return rate after adjusting for inflation)

·  For every dollar spent by state and local taxpayers for CCCS operations, $5.70 is returned to government due to added tax revenue and a reduced demand for government-funded services in Colorado (13.5% average annual return rate after adjusting for inflation)

·  For every dollar spent by society on education provided by CCCS colleges, society will receive a cumulative value of $11.30 in benefits

The full economic impact report is on the CCCS website: www.cccs.edu/economic-impact along with links to separate reports for each Community College in the System that correlate to the specific region.

Following is information on the economic value of Trinidad State Junior College, which has campuses in Alamosa and Trinidad:

Trinidad State Junior College (TSJC) creates a significant positive impact on the business community and generates a return on investment to its major stakeholder groups—students, taxpayers, and society.

Using a two-pronged approach that involves an economic impact analysis and an investment analysis, this study calculates the benefits to each of these groups. Results of the analysis reflect Fiscal Year (FY) 2015-16.

IMPACT ON

BUSINESS

COMMUNITY

During the analysis year, TSJC and its students added $62.1 million in income to the TSJC Service Area economy, approximately equal to 1.4 percent of the region’s total gross regional product (GRP). By comparison, this impact from the college is nearly as large as the entire Arts, Entertainment, & Recreation industry in the region. The economic impacts of TSJC break down as follows:

Operations spending impact

• TSJC employed 290 full-time faculty, adjunct instructors, and staff in FY 2015-16.

Payroll amounted to $10.7 million, much of which was spent in the TSJC Service Area to purchase groceries, clothing, and other household goods and services.

The college spent another $7.7 million to support its day-to-day operations.

• The net impact of college payroll and expenses in the TSJC Service Area during the analysis year was approximately $13.4 million in income.

Construction spending impact

• TSJC commissioned contractors to build or renovate its facilities during the analysis year, generating a short-term infusion of spending and jobs in the regional economy.

• The net impact of TSJC’s construction spending in FY 2015-16 was $171.3 thousand in added income for the TSJC Service Area.

Student spending impact

• Around 24 percent of students attending TSJC originated from outside the region.

Some of these students relocated to the TSJC Service Area. In addition, a number of students would have left the region if not for TSJC. These relocated and retained students spent money on groceries, transportation, rent, and so on at regional businesses.

IMPACTS CREATED BY TSJC IN FY 2015-16

ADDED INCOME JOBS

$13.4 million 

Operations spending impact

$171.3 thousand

Construction spending

impact

$2.7 million 

Student spending impact

$45.8 million 

Alumni impact

$62.1 million 

Total impact

• The expenditures of relocated and retained students during the analysis year added approximately $2.7 million in income to the TSJC Service Area economy.

Alumni impact

• Over the years, students have studied at TSJC and entered or re-entered the workforce with newly-acquired skills. Today, thousands of these former students are employed in the TSJC Service Area.

• The accumulated contribution of former students currently employed in the regional workforce amounted to $45.8 million in added income during the analysis year.

RETURN ON INVESTMENT TO STUDENTS,

TAXPAYERS, AND SOCIETY

Student perspective

• TSJC’s FY 2015-16 students paid a total of $4.9 million to cover the cost of tuition, fees, and supplies. They also forwent $9.3 million in money that they would have earned had they been working instead of learning.

• In return for the monies invested in the college, students will receive a present value of $75.2 million in increased earnings over their working lives. This translates to a return of $5.30 in higher future earnings for every $1 that students invest in their education. The average annual return for students is 16.8 percent.

Taxpayer perspective

• In FY 2015-16, state taxpayers in Colorado paid $9.9 million to support the operations of TSJC. The net present value of the added tax revenue stemming from the students’ higher lifetime earnings and the increased output of businesses amounts to $21.9 million in benefits to taxpayers. Savings to the public sector add another $2.1 million in benefits due to a reduced demand for government-funded services in Colorado.

• Dividing benefits to taxpayers by the associated costs yields a 2.4 benefit-cost ratio, i.e., every $1 in costs returns $2.40 in benefits. The average annual return on investment for taxpayers is 6.2 percent.

Social perspective

• The economic base in Colorado will grow by $251.9 million over the course of the students’ working lives. Society will also benefit from $6 million 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 TSJC educations during the analysis year, society will receive a cumulative value of $8.30 in benefits, for as long as the

FY 2015-16 student population at TSJC remains active in the state workforce.