Destination University Economic Impact Report
Transcript of Destination University Economic Impact Report
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A Report of the Economic Impact
of
the
Creation
of
a
DestinationUniversity as Part of the Conversion of the University of Houston Victoriafrom a Two Year Upper Level
Institution to a Four Year Resident
Campus
April 21, 2010
Prepared for:
Victoria Economic Development Corporation700 N. Main Street, Suite 104Victoria, Texas 77901
Prepared by:
Impact DataSource
4709 Cap
Rock
DriveAustin, Texas 78735
(512) 892 0205Fax (512) 892 2569www.impactdatasource.com
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Executive Summary ......................................................................................................... 3
The Report:
Introduction .................................................................................................................. 8
Description of the University .....................................................8
Construction of the Initial Expansion Campus ...........................10
Types of Impacts that the University's Expanded Operations as a ............................... 12 Four Year Resident Campus will Provide
Direct Impact of the Operations of the Expanded University ... 13
The Direct, Indirect and Induced Economic Impact of the .........16 Operations of the Expanded University
Taxable Spending Expected in the Region .................................16
Spending on Motel Rooms ........................................................ 20
Table of Contents
Page 2
Residential and Commercial Property to be Added to Local Tax Rolls ......................... 20
Summary of the Economic Impact of the Operations of the Expanded ....................... 22 University
Additional Revenues for Local Taxing Districts and the State .......................................23
Return on Investment in Funding to Construct the Initial Campus .............................. 28 at the University of Houston Victoria
Socioeconomic Benefits of Higher Education ................................................................ 30
Conclusion .................................................................................. 37
Conduct of this Analysis ............................................................. 38
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This report presents the results of an economic impact analysis performed by Impact DataSource, an Austin, Texas economic consulting and research firm. The purpose of the analysis was to determine the economic impact of the creation of a destination university as part of the conversion of the University of Houston Victoria from a two year upper level institution to a four year resident campus.
In addition, this report addresses the social benefits to the region through the creation of a more highly educated workforce. This report represents a snapshot of the first 10 years of the Universitys expanded operation.
The economic impact of the University's expanded operations was projected for ten years, 2015 2024.
The University
The University of Houston Victoria currently serves junior, senior and graduate level students. In thefall 2010, the University will accept freshmen for the first time. This change is due to legislation
being passed and signed by Governor Perry in the most recent legislative session.
Coursework is also offered over the internet through distance education, and at two teaching centers: UHS Cinco Ranch and UHS Sugar Land. UHV now serves an expanded area of 15 counties, offering 33 Bachelors and Masters Degree Programs and has 3,658 students in the fall 2009. Of those 3,658 students, 503 are students taking face to face classes in Victoria. Since the mid 1990s, student growth from Victoria County tapered to about 1.5% annual growth. All new enrollments have been, essentially, from the Katy/Sugar Land area or through online distance learning offerings.
Executive Summary
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Planned Expansion
To accommodate projected growth in enrollment to 4,084 in Victoria and total enrollment of 9,360 by academic year 2019 20, an estimated 630,000 square foot of space will be needed based on predictionsby the Texas Higher Education Coordinating Board's Space Prediction Model of square footage.Currently, the University has 169,000 square feet of space.
Economic Impact of the University's Construction Activities
The University's planned $103.5 million construction ($71.5 million for academic classrooms and offices and $32 million of private funding for 800 beds of student housing will have a significanteconomic impact on the economy of Victoria and Victoria County over the nearly two year construction
period.
The University's construction activities will create $157.7 million in direct and indirect economic output or revenues for businesses in the region, create and support an average of 974 jobs each year over the construction period and create and support $80.5 million in salaries for workers in the region.
Economic Impact of the University's Expanded Operations over the Ten Years of its Expansion
The direct economic impact of the operations of the University over the ten years of its expansion will be
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$1.05 billion. This will include payments that the University will make for employee, faculty and staff salaries, purchases of goods and services and other expenditures. The direct spending by the University will generate another $1.724 billion in indirect sales or economic output in businesses and other organizationsin the region. In total, the economic impact of the operations of the University over ten years of the expansion will be $2.78 billion.
While the
University
will
employ
933
individuals
by
2024,
the
Universitys
spending
during
its
operations will support another 839 jobs in the region. In total, the University's operations over theten years of the expansion will support 1,772 jobs in the region.
Similarly, while the salaries of the Universitys employees, staff and faculty, along with financial aid availableto students, will total $865 million over ten years, the Universitys spending will support another $654million in salaries for workers in related spin off jobs supported in the region. Therefore, total salaries and financial aid supported by the University's operations over ten years will be $1.5 billion.
This economic output and related jobs and salaries supported by the University will be responsible forsignificant retail sales in the region, spending on lodging and residential and commercial property added
to local tax rolls. Some of these economic impacts are shown below.
Number of direct and indirect jobs to be created 1772Number of workers moving to the community 467Number of new residents in the region 1518
Summary of the Economic Impact of the University'sExpanded Operations over the Ten Years of the Expansion
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um er o new s u en s n pu c sc oo s n e reg onSalaries to be paid to direct and indirect workers
Taxable sales
in
the
communityRoom nights at local motels 88,210
Lodging sales at local motels $11,158,831Residential property added to local tax rolls, including construction of apartments to meet the needs of
off campus students and housing for new workers moving to the region
Commercial property, including retail, added to local tax rolls $21,905,270in the region
$1,519,555,860
$449,342,194
$86,308,831
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The economic activity generated by the University will translate into substantial revenues for local taxingdistricts and the State of Texas. These additional revenues over ten years are shown below.
City of
Victoria: Sales taxes $6,740,133
Property taxes $4,273,193 Hotel occupancy taxes $748,137 Total $11,761,463Victoria County: Sales taxes $2,246,711 Property taxes $2,276,386 Total $4,523,097Victoria County Navigation District $202,728Victoria County Road and Bridge $364,381Victoria ISD $8,763,027Victoria College $1,016,291Victoria County Ground Water District $63,270
Total additional revenues for local taxing districts $26,694,257
State of Texas sales tax collections $28,083,887
Additional Revenues for Local Taxing Districts and the State of Texas over Ten Years of the Expansion
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o a revenues or e a e an ocataxing districts
Return on Investment in Funding to Construct the Initial Campus at University of Houston Victoria
What is the return on investment for the cost of constructing the initial UHV expansion campus?
The return on investment can be measured by comparing the cost of constructing the campus tothe increase in gross area product, salaries, and taxable sales generated from the operations of the campus, along with the increase in residential property and commercial property added to local taxrolls by the campus expansion, among others. The earnings of a higher educated workforce in thethe region and their spending would also greatly expand the return on this investment.
, ,
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The returns on investment for ten years are shown below.
Initial investment to construct the campus:
State funds
to
construct
the
initial
campus $71,580,000Costs of student housing funded by outside sources $32,000,000
Total initial costs $103,580,000
Increases from the operations of the campus:
Gross area product, in millions of dollars $2,780Taxable sales in the area, in millions of dollars $435Personal income including salaries of direct and indirect workers $1,520
and financial aid available to students, in millions of dollarsValue of residential and commercial property added to tax rolls, in millions of dollars $108Revenues for the state and local taxing districts, in millions of dollars $55
Number of direct and indirect jobs 1,772
Dollar returns for each dollar invested to construct the campus:
Gross area product $39Taxable sales in the area $6
Ten Year Returns on Initial Investment of Costs to Construct the Initial Campus
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ersona ncome nc u ng sa ar es o rec an n rec wor ersand financial aid available to students
Value of
residential
and
commercial
property
added
to
tax
rolls $1.51Revenues for the state and local taxing districts $0.77
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Socioeconomic Benefits of Higher Education
Many studies have been conducted to describe the socioeconomic benefits resulting from higher education, such as the benefits from UHV. The 1998 study from the Institute for Higher Education Policy titled "Reaping the Benefits" and the March 2007 Perryman Group "A Tale of Two States And One Million Jobs!!, An Analysis of the Economic Benefits of Achieving the Future Goals of the Closing
the Gaps
Initiative
of
the
Texas
Higher
Education
Coordinating
Board"
document
the
most
significant
private and public economic and social benefits that result from higher education. The table below summarizes these types of benefits.
Details of this analysis are on the following pages, beginning with an introduction to this study.
Increased Charitable Giving/Community Service Improved Quality of Life for Offspring
Public Private
Economic
Increased Tax Revenues Higher Salaries and Benefits Greater Productivity Employment Increased Consumption Higher Savings Levels Increased Workforce Flexibility Improved Working Conditions Decreased Reliance on Government Financial Personal/Professional Mobility
Support
Increased Quality of Civic Life Better Consumer Decision Making Social Cohesion/Appreciation of Diversity Increased Personal Status Improved Ability to Adapt and Use Technology More Hobbies, Leisure Activities
Social
Reduced Crime Rates Improved Health/Life Expectancy
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Introduction
This report presents the results of an economic impact analysis performed by Impact DataSource, an Austin, Texas economic consulting and research firm. The purpose of the analysis was to determine the economic impact of the creation of a destination university as part of the conversion of the University of Houston Victoria from a two year upper level institution to a four year resident campus. In addition, this report addresses the social benefits to the region through the creation of a more highly educated workforce. This report represents a snapshot of the first 10 years of the Universitys expanded operation.
Construction of the initial campus is expected to be completed by 2015 a construction period of about one and three quarters years.
The economic impact of the University's expanded operations was projected for ten years, 2015 2024.
The analysis focused on determining following the impacts:
Construction of the required buildings for initial construction, The university's increase revenues and spending over the next 10 years, Increased enrollment over the next 10 years, and
A Report of the Projected Economic Impact of the University of Houston Victoria
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Increase acu ty require to serve stu ents over t e next 10 years.
In addition, some of the many socioeconomic benefits of higher education are discussed.
A description of the University and its proposed expansion is next.
Description of the University
About the University
The University of Houston Victoria currently serves junior, senior and graduate level students. In the
Beginning as an effort by local community leaders in the late 1960s to bring a higher learning institution to Victoria, legislation was passed in 1971 officially establishing an off campus learning center serving junior, senior
and graduate level students. In April of 1983, the University of Houston Victoria Center, as it was then known, was granted permanent degree granting status in the State of Texas. At the same time, the institution was renamed as the University of Houston Victoria, becoming a separate institution within the UH Systems family of campuses. Like other area Texas public colleges and universities, UHV operates under the jurisdiction of the Texas Higher Education Coordinating Board and is accredited through the Southern Association of Colleges and Schools.
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fall 2010, the University will accept freshmen for the first time. This change is due to legislationbeing passed and signed by Governor Perry in the most recent legislative session.
Space Projections
The space required by UHV in Victoria is shown below.
2009 10 2010 11 2011 12 2012 13 2013 14 2014 15
Teaching Space 8,889 23,266 39,576 54,662 68,962 94,554 Library Space 28,922 32,504 36,473 40,410 44,243 49,922 Research Space 2,529 3,480 4,556 5,600 6,584 8,231 Office Space 93,918 112,725 132,760 152,844 172,739 202,441 Support Space 12,083 15,478 19,203 22,816 26,328 31,963 Total Predicted Space 146,342 187,453 232,568 276,331 318,855 387,110
Current Space In Victoria 168,790 168,790 168,790 168,790 168,790 168,790
Space Required by UHV in Victoria
Coursework is also offered over the internet through distance education, and at two teaching centers: UHS Cinco Ranch and UHS Sugar Land. UHV now serves an expanded area of 15 counties, offering 33 Bachelors and Masters Degree Programs and has 3,658 students in the fall 2009. Of those 3,658 students, 503 are students
taking face
to
face
classes
in
Victoria.
Since
the
mid
1990s,
student
growth
from
Victoria
County
tapered
to
about 1.5% annual growth. All new enrollments have been, essentially, from the Katy/Sugar Land area or through online distance learning offerings.
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Current Deficit in Victoria 22,448 (18,663) (63,778) (107,541) (150,065) (218,320)
Estimated Headcount In Victoria 503 804 1,144 1,473 1,783 2,311 All Locations 3,658 4,140 4,652 5,171 5,689 6,420
2015 16 2016 17 2017 18 2018 19 2019 20
Teaching Space 112,190 129,504 146,635 163,322 177,138 Library Space 54,439 58,967 63,555 68,160 72,409 Research Space 9,425 10,598 11,768 12,918 13,908 Office Space 225,117 247,794 270,471 293,100 313,373 Support Space 36,105 40,218 44,319 48,375 51,915 Total Predicted Space 437,277 487,081 536,747 585,876 628,742
Current Space In Victoria 168,790 168,790 168,790 168,790 168,790 Current Deficit in Victoria (268,487) (318,291) (367,957) (417,086) (459,952)
Estimated Headcount In Victoria 2,686 3,056 3,422 3,780 4,084 All Locations 7,007 7,599 8,198 8,801 9,360
Source: UHV
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All space assumptions shown above were calculated by UHV based on the Texas Higher Education Coordinating Board's space prediction model of square footage.
Teaching space includes all rooms used for instruction; library space reading/study rooms, stack space, and associated service areas; research space all non class (research) laboratories and service rooms;office space all offices, conference rooms, and associated service areas; and support space all
data processing/computer
rooms,
shops,
storage,
vehicle
storage,
and
associated
service
areas.
Teaching space was calculated based on number of full time students in Victoria; library space on thevolumes of books, number of full time students served from Victoria, 50% of the number of full time students served from online, number of faculty, staff space needed, and additional library space needed; research space on the number of full time students served from Victoria and 50% of the number of full time students served from online; office space based on total student population served at all locations (staff serve all students from the Victoria location); and support staff on thetotal predicted teaching, library, research, and office space for Victoria.
To accommodate this projected growth an expansion campus is projected A discussion of the
construction of the initial expansion campus is next.
Construction of the Initial Expansion Campus
Size and Costs of the Constructing the Campus and Construction Period
The size and cost of the proposed expansion for the initial campus are shown below.
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Total square feet of academic space to be constructed 375,000 (based
on
2015
enrollment
needs)
Cost of proposed construction:Academic classrooms and offices $71,580,000Student housing (800 beds) to be paid for with private funding $32,000,000Total construction costs
Source: University of Houston Victoria
Types of Construction Impacts that the Expansion will Provide
The expansion will provide economic impacts from the construction activities. These impacts may becharacterized as direct, indirect and induced.
The direct economic impact during construction will come from the University's spending on construction and from construction workers and their salaries. From the direct construction spending and the spending
$103,580,000
Size and Cost of the Initial Campus
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of construction workers, indirect and induced benefits or spin off benefits will be created and supported in the region.
Indirect sales, jobs and salaries will be supported in businesses and organizations in the region, such aslumber companies, concrete companies, subcontractors, etc. that supply goods and services to the firmsconstructing the facilities. In addition, induced sales, jobs and salaries will be supported in businesses
or organizations
in
the
region,
such
as
restaurants,
gas
stations,
banks,
book
stores,
grocery
stores,
apartment complexes, convenience stores, computer stores, service companies, etc. that supply goodsand services to construction workers and their families and, in turn, to workers in indirect jobs and their families.
To estimate the indirect and induced economic impact of the construction activities on the Victoria area,regional economic multipliers were used. Regional economic multipliers for Texas and areas of the state are included in the US Department of Commerces Regional Input Output Modeling System (RIMS II).
Three types of regional economic multipliers were used in this analysis:
An output mul t plier, An employment mul t plier and An earnings mul t plier.
The multipliers show (1) the estimated sales or output in businesses or organizations in the region for eachdollar of spent on construction by the University, (2) the number of indirect and induced jobs created for every one direct construction job, and (3) the amount of salaries paid to these workers for every dollar to bepaid to a construction worker.
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The following indirect multipliers for construction activities were used in this analysis:
Output multiplier 0.5232 Employment multiplier 1.0569 Earnings multiplier 0.9453
Economic Impact of Construction Activities
The expansion construction activities will have a substantial economic impact on the economy of Victoria and Victoria County.
Contractors in the region will work on the project and they will hire workers and pay salaries. Plus, this activity will create spin off or indirect revenues, jobs and salaries in other businesses in the region. In total, the project's development and construction activities will have the impact on the region's economyeach year, as shown on the following page.
Indirect and InducedMultipliers Used in this Analysis
For Construction Activities
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Direct Indirect Total
Economic output or revenues for businesses in the region $103,580,000 $54,193,056 $157,773,056Average number of construction jobs to be supported each year 474 500 974Salaries to be paid to construction workers $41,432,000 $39,165,670 $80,597,670
As shown above, the University's construction activities will create $157.7 million in economic outputor revenues for businesses in the region, create and support an average of 974 jobs each year overthe construction period and create and support $80.5 million in salaries for workers in the region.
In addition to the economic impact from the construction activities, the economic activities createdby the expansion of the University operations, along with the permanent jobs that the University will fill,will also generate substantial economic impacts for the region. These economic impacts are discussed next.
Types of Impacts that the University's Expanded Operations as a Four Year Resident Campuswill Provide
Victoria and Victoria County will receive substantial economic benefits from the University's operations as a four year resident campus.
These economic impacts include the following:
Economic Impact from the Expansion's Construction Activities
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xpen ures o e n vers y an revenues or us nesses an o er organ za ons n e reg on, Taxable sales at the university,
Jobs, Worker salaries or personal income,
Local worker and student spending, and Visitor spending, and New residential and commercial property in the community to be added to local tax rolls.
As with construction impacts, these economic impacts may be characterized as direct, indirect and induced.
The direct economic impact will come from the operations of the University, its employees and staff and students. From the spending of the University, its employees and staff, and students, indirect and inducedbenefits or spin off benefits will be supported in the region.
Indirect sales, jobs and salaries will be supported in businesses and organizations in the region, such as air conditioning service firms, office supply firms, etc. that supply goods and services to the University. In addition, induced sales, jobs and salaries are supported in businesses or organizations in the region, suchas restaurants, gas stations, banks, book stores, grocery stores, apartment complexes, convenience stores,computer stores, service companies, etc. that supply goods and services to the Universitys employeesand staff and students and their families and, in turn, to workers in indirect jobs and their families.
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The following indirect multipliers for the University's operations were used in this analysis:
Output multiplier 1.6321 Employment multiplier 0.8993 Earnings multiplier 0.7559
The multipliers show (1) the estimated sales or output in businesses or organizations in the region for eachdollar of operating budget at the University, (2) the number of indirect and induced jobs created for every onedirect job at the University and (3) the amount of salaries paid to these workers for every dollar to be paid todirect job employee of the University and every dollar of financial assistance available to students at the University.
The economic impact of the University's expanded operations is discussed next.
Direct Impact of the Operations of the Expanded University
The proposed expansion campus expects to open in the third quarter of 2015.
Projected Operating Budget
Indirect and InducedMultipliers Used in this AnalysisFor Operations of the Expanded
University
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With the expansion, the University expects to have the following annual operating budget:
Year 1 2015 $53.1Year 2 2016 $64.4Year 3 2017 $75.0Year 4 2018 $84.9Year 5 2019 $98.6Year 6 2020 $109.8Year 7 2021 $122.4
Year 8 2022 $135.6Year 9 2023 $149.3Year 10 2024 $163.2
Total $1,056.3
The University's Projected Operating Budget(Shown in Millions of Dollars)
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Projected Faculty and Staff and Payroll
With the expansion, the University expects to have the following number of faculty and staff:
EstimatedAnnual Number of Payroll
Faculty and (In MillionsStaff of Dollars)
Year 1 2015 390 $20.8Year 2 2016 473 $26.7Year 3 2017 550 $32.8Year 4 2018 621 $39.2Year 5 2019 686 $46.0Year 6 2020 746 $53.0Year 7 2021 801 $60.3Year 8 2022 850 $68.0Year 9 2023 894 $76.1
Year 10 2024 933 $84.5
Total $507.4
Number of Faculty and Staff and Payroll(Shown in Millions of Dollars)
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Projected
Number
of
Students
Living
in
Victoria
and
Victoria
County
and
Enrolled
at
the
University
With the expansion, the University expects to have the following number of students living in Victoria and Victoria County and enrolled at the University:
Year 1 2015 2,311 Year 2 2016 2,686 Year 3 2017 3,056 Year 4 2018 3,422
Year 5 2019 3,780 Year 6 2020 4,084 Year 7 2021 4,412 Year 8 2022 4,766 Year 9 2023 5,148
Year 10 2024 5,562
Number of Students
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Projected Number of Out of Town Visitors to the University
With the expansion, the University expects to have the following number of out of town visitors to the campus for conferences, sporting events, and other events:
Year 1 2015 6,720 Year 2 2016 8,400 Year 3 2017 10,560 Year 4 2018 12,320 Year 5 2019 14,080 Year 6 2020 19,800 Year 7 2021 22,400 Year 8 2022 24,640 Year 9 2023 27,600
Year 10 2024 29,900
Projected Financial Aid Received by Students
With the expansion, students at the University will receive the following financial aid and revenues from other sources that the students could spend in the community:
Estimated Number of Out of Town Visitors to the
Campus
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Year 1 2015 $16.9Year 2 2016 $21.1Year 3 2017 $25.3Year 4 2018 $29.5Year 5 2019 $33.7Year 6 2020 $37.9Year 7 2021 $42.1Year 8 2022 $46.3Year 9 2023 $50.5
Year 10 2024 $54.7
Total $358.0
Estimated Student Aid Received by Students (Shown in
Millions of Dollars)
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The Direct, Indirect and Induced Economic Impact of the Operations of the Expanded University
As discussed above, the University will have a larger operating budget, more faculty and staff, and larger payrolls and more financial aid and other resources for students.
These expanded operations will generate the following direct and indirect economic activity in the region
over the
ten
years
of
the
expansion.
Jobs at theUniversity
When ExpansionCompleted
Direct 933Indirect and induced 839Total 1772
As shown above, the direct economic impact of the operations of the University over the first ten yearsfollowing the expansion will be $1.056 billion. This will include payments that the University will make for employee, faculty and staff salaries, purchases of goods and services and other expenditures. Thedirect spending by the University will generate another $1.724 billion in indirect sales or economic
$1,724
EconomicOutput
Economic Output, Jobs, and Annual Salaries and Student Financial AidSupported by the University Over First Ten Years Following the Expansion
(Shown in
Millions
of
Dollars) Financial Aid & Resources
$654,155,860$1,519,555,860$2,780
$1,056.3 $865,400,000
Salaries and Student
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ou pu n us nesses an organ za ons n e reg on. n o a , e econom c mpac o e operations of the University over the ten years following the expansion will be $2.78 billion.
While the University will employ 933 individuals, the Universitys spending during its operations will support another 839 jobs in the region. In total, the University's operations over the ten years of theexpansion will support 1,772 jobs in the region.
Similarly, while the salaries of the Universitys employees, staff and faculty, along with financial aid available students, will total $865 million over ten years, the Universitys spending will support another$654 million in salaries for workers in related spin off jobs supported in the region. Therefore, total salaries and financial aid supported by the University's operations over first ten years following the expansion will be $1.5 billion.
Taxable Spending Expected in the Region
The University's construction activities and its expanded operations will generate the taxable spendingin the region on which sales taxes will be collected by the City of Victoria and Victoria County.
Taxable Spending During Construction at the University
During construction, construction workers and workers in indirect and induced jobs will spend an estimated
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30% of their salaries on taxable goods and services. In addition, an estimated 60% of this taxable spending will be in Victoria.
Therefore, taxable spending in Victoria during the University's construction activities is shown below.
Direct and indirect construction salaries
Workers' taxable spending in Victoria
Total taxable spending in Victoria duringconstruction
Taxable Spending by Workers During the First Ten Years of the University's Expanded Operations
During the first ten years of the University's expanded operations, the University's direct workers and workers in indirect and induced jobs will spend an estimated 30% of their salaries on taxable goodsand services. In addition, an estimated 80% of this taxable spending will be in Victoria. This estimatedspending subject to the City and County's sales tax is shown below.
Taxable Spending in Victoria During Construction
$80,597,670
$14,507,581
$14,507,581
Taxable Direct and Indirect Workers' Spending in Victoriaand the Spending of Student Financial Aid and Resources
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u en o a u en sFinancial Aid Financial Aid and
and Resources
and
Workers' Workers'and Direct Indirect Direct and Taxable
Workers' Workers Indirect SpendingSalaries Salaries Salaries in Victoria
Year 1 2015 $37,700,000 $28,497,430 $66,197,430 $15,887,383Year 2 2016 $47,800,000 $36,132,020 $83,932,020 $20,143,685Year 3 2017 $58,100,000 $43,917,790 $102,017,790 $24,484,270Year 4 2018 $68,700,000 $51,930,330 $120,630,330 $28,951,279Year 5 2019 $79,700,000 $60,245,230 $139,945,230 $33,586,855Year 6 2020 $90,900,000 $68,711,310 $159,611,310 $38,306,714
Year 7 2021 $102,400,000 $77,404,160 $179,804,160 $43,152,998Year 8 2022 $114,300,000 $86,399,370 $200,699,370 $48,167,849Year 9 2023 $126,600,000 $95,696,940 $222,296,940 $53,351,266
Year 10 2024 $139,200,000 $105,221,280 $244,421,280 $58,661,107
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Taxable Spending by Out of Town Visitors During the University's Operations
During the University's operations, out of town visitors to the campus will spend money in Victoria eating out and shopping in the community. This estimated spending subject to the City and County's sales tax is shown below.
EstimatedTaxable Total
Estimated Spending Taxable Number of by Each Spending
Out of Out of Out of Town Town Town
Visitors Visitors Visitors
Year 1 2015 6,720 $65 $436,800Year 2 2016 8,400 $67 $562,380Year 3 2017 10,560 $69 $728,202Year 4 2018 12,320 $71 $875,056Year 5 2019 14,080 $73 $1,030,066Year 6 2020 19,800 $75 $1,491,986Year 7 2021 22,400 $78 $1,738,540Year 8 2022 24,640 $80 $1,969,766Year 9 2023 27,600 $82 $2,272,586
Year 10 2024 29,900 $85 $2,535,827
Taxable
Spending
by
Out
of
Town
Visitors
in
Victoria
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Total 176,420 $13,641,207
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Total Taxable Spending
From construction and from the University's first ten years of expanded operations, the following taxable spending will be generated in Victoria:
Sales in the Students andUniversity's Workers'Book Store, Spending Out of Town Total
From Cafeteria, in the Visitors' TaxableConstruction Etc. Area Spending Spending
Initial construction: $14,507,581 $14,507,581
Operations:Year 1 2015 $2,500,000 $15,887,383 $436,800 $18,824,183
Year 2 2016 $3,600,000 $20,143,685 $562,380 $24,306,065Year 3 2017 $4,200,000 $24,484,270 $728,202 $29,412,471Year 4 2018 $4,800,000 $28,951,279 $875,056 $34,626,335Year 5 2019 $5,400,000 $33,586,855 $1,030,066 $40,016,921Year 6 2020 $6,000,000 $38,306,714 $1,491,986 $45,798,700Year 7 2021 $6,600,000 $43,152,998 $1,738,540 $51,491,539Year 8 2022 $7,200,000 $48,167,849 $1,969,766 $57,337,615Year 9 2023 $7,800,000 $53,351,266 $2,272,586 $63,423,851
Total Taxable Spending in Victoria and Victoria County
From Operations
Page 19
ear 2024 , , , , , , , ,
Total $14,507,581 $56,500,000 $364,693,406 $13,641,207 $449,342,194
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Spending on Motel Rooms
During construction and during the University's operations the following amounts will be spent on motelrooms in Victoria:
EstimatedEstimated NumberNumber of Room Estimated Total
of Room Nights from Nightly Spending onNights During Out of Town Room MotelConstruction* Visitors* Rate Rooms
During Construction 3,889 $100 $194,434
Operations:
Year 1 2015 3,360 $100 $336,000Year 2 2016 4,200 $103 $432,600Year 3 2017 5,280 $106 $560,155Year 4 2018 6,160 $109 $673,120Year 5 2019 7,040 $113 $792,358Year 6 2020 9,900 $116 $1,147,681Year 7 2021 11,200 $119 $1,337,339Year 8 2022 12,320 $123 $1,515,205
Spending on Motel Rooms in Victoria to be Generated by the University
Page 20
ear , , ,Year 10 2024 14,950 $130 $1,950,636
Total 3,889 88,210 $10,687,671
* The estimated number of room nights above assumes double occupancy for motel guests.
Residential and Commercial Property to be Added to Local Tax Rolls
As a result of the University's expansion, new residential property will be constructed for some new directand indirect workers who move to the community and for new students. This property will be added tolocal tax rolls, along with new commercial property constructed in the region as a result of growth at
the University and new residents.
The expected growth in faculty and staff in the first year will be from 300 to 390.
Overall, over ten years, the University projects that about 443 University employees (70% of the 633new professional staff and faculty hired during this period) will move to the community to take a job at the university.
Further, an estimated 40% of new direct and indirect workers may move to Victoria. Also, about 60% of
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new students not living on campus will be from outside the region.
New residential property will be built for many of these new students or require that new residential propertybe built for them. The estimated average taxable value of this new residential property in the first year will be $160,000 (with some single family and some multi family properties being built) with average annual increases in the value of new residential and commercial property of 3%.
Therefore, the following commercial and residential property will be added to local tax rolls each year:
TotalEstimated Value of
Value of Number of Value of New Retail and New New Residential
Commercial Residential Residential and CumulativeProperty Properties Properties Commercial Value of
to be to be Added to be Added Property NewAdded to to Tax to Tax Added to Property Tax Rolls Rolls Each Rolls Each Tax Rolls on Tax
Each Year Year Year Each Year Rolls
Year 1 2015 $7,033,477 68 $10,939,968 $17,973,445 $17,973,445Year 2 2016 $1,673,296 63 $10,391,754 $12,065,050 $30,038,495Year 3 2017 $1,654,080 58 $9,929,759 $11,583,839 $41,622,334Year 4 2018 $1,652,401 54 $9,430,692 $11,083,093 $52,705,427
Value of New Property Added to Local Tax Rolls Each Year
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Year 5 2019 1,667,699 49 8,892,744 10,560,443 63,265,870Year 6 2020 $1,643,446 46 $8,454,948 $10,098,393 $73,364,263
Year 7 2021 $1,636,729 42
$7,982,880 $9,619,609 $82,983,872
Year 8 2022 $1,646,990 37 $7,325,381 $8,972,371 $91,956,243Year 9 2023 $1,655,013 33 $6,775,230 $8,430,242 $100,386,485
Year 10 2024 $1,642,140 30 $6,185,477 $7,827,616 $108,214,101
Total $21,905,270 481 $86,308,831 $108,214,101
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Summary of the Economic Impact of the Operations of the Expanded University
In summary, the operations of a residential University will have the following economic impact onVictoria and Victoria County over the ten years of the expansion:
Number of new direct and indirect jobs to be created 1772Number of workers moving to the community 467Number of new residents in the region 1518Number of new students in public schools in the region 350Salaries to be paid to direct and indirect workersTaxable sales in the communityRoom nights at local motels 88,210 Lodging sales at local motels $11,158,831Residential property added to local tax rollsCommercial property, including retail, added to local tax rolls $21,905,270
$86,308,831
$449,342,194
Expanded
Operations
over
the
Ten
Years
Following
the
Expansion
$1,519,555,860
Summary of the Economic Impact of the University's
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Additional Revenues for the City, County, School District, Area Taxing Districts and the State
The economic impacts of the University's expansion from construction activities and from itsoperations translate into additional revenues for the City of Victoria, Victoria County, VictoriaIndependent School District, and other taxing districts in the region.
Tax Rates Used in this Analysis
Tax and other rates used to calculate these revenues are shown below.
Sales tax rates:
City of Victoria 1.5%Victoria County 0.5%State of Texas 6.25%
Total 8.25%
Property tax rates:
City of Victoria 0.6450Victoria County Navigation District 0.0306
Tax Rates Used in this Analysis
Page 23
c or a oun y oa an r ge .Victoria County 0.3436
Victoria ISD 1.3227Victoria College 0.1534
Victoria County Ground Water District 0.00955
City of Victoria hotel occupancy tax rate 7%
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The City of Victoria will receive the following additional revenues from sales, property and hotel occupancytaxes from the University during construction and over the first ten years of the expansion:
HotelSales Property Occupancy
Taxes Taxes Taxes Total
During construction $217,614 $13,610 $231,224
Operations:Year 1 2015 $282,363 $115,929 $23,520 $421,811Year 2 2016 $364,591 $193,748 $30,282 $588,621Year 3 2017 $441,187 $268,464 $39,211 $748,862Year 4 2018 $519,395 $339,950 $47,118 $906,463Year 5 2019 $600,254 $408,065 $55,465 $1,063,784Year 6 2020 $686,981 $473,199 $80,338 $1,240,518Year 7 2021 $772,373 $535,246 $93,614 $1,401,233Year 8 2022 $860,064 $593,118 $106,064 $1,559,246Year 9 2023 $951,358 $647,493 $122,370 $1,721,221
Year 10 2024 $1,043,954 $697,981 $136,545 $1,878,479
Total $6,740,133 $4,273,193 $748,137 $11,761,463
Additional Revenues for the City of Victoria
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Additional Revenues for Victoria County
Victoria County will receive the following additional revenues from sales and property taxes duringconstruction and ten years of the expansion from the University:
Sales PropertyTaxes Taxes Total
During construction $72,538 $72,538
Operations:Year 1 2015 $94,121 $61,757 $155,878Year 2 2016 $121,530 $103,212 $224,743Year 3 2017 $147,062 $143,014 $290,077Year 4 2018 $173,132 $181,096 $354,228Year 5 2019 $200,085 $217,382 $417,466Year 6 2020 $228,994 $252,080 $481,073Year 7 2021 $257,458 $285,133 $542,590Year 8 2022 $286,688 $315,962 $602,650Year 9 2023 $317,119 $344,928 $662,047
Year 10 2024 $347,985 $371,824 $719,808
Total $2,246,711 $2,276,386 $4,523,097
Additional Revenues for the Victoria County
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Additional Revenues for Other Local Taxing Districts
Other local taxing districts will receive the following property tax collections from additional residential and commercial property added to local tax rolls over the ten years of the expansion of theUniversity:
GroundNavigation Road and Victoria Victoria Water
District Bridge ISD College District Total
Property tax rate $0.0306 $0.055 $1.3227 $0.1534 $0.00955
Year 1 2015 $5,500 $9,885 $237,735 $27,571 $1,716 $282,408Year 2 2016 $9,192 $16,521 $397,319 $46,079 $2,869 $471,980Year 3 2017 $12,736 $22,892 $550,539 $63,849 $3,975 $653,991Year 4 2018 $16,128 $28,988 $697,135 $80,850 $5,033 $828,134Year 5 2019 $19,359 $34,796 $836,818 $97,050 $6,042 $994,065Year 6 2020 $22,449 $40,350 $970,389 $112,541 $7,006 $1,152,736Year 7 2021 $25,393 $45,641 $1,097,628 $127,297 $7,925 $1,303,884Year 8 2022 $28,139 $50,576 $1,216,305 $141,061 $8,782 $1,444,862Year 9 2023 $30,718 $55,213 $1,327,812 $153,993 $9,587 $1,577,323
Year 10 2024 $33,114 $59,518 $1,431,348 $166,000 $10,334 $1,700,314
Total $202,728 $364,381 $8,763,027 $1,016,291 $63,270 $10,409,697
Additional
Property
Tax
Collections
by
Other
Local
Taxing
Districts
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Additional Sales Tax Collections for the State of Texas
The State of Texas will collect the following sales taxes as a result of the University's expansion over the ten years of its expansion:
During construction $906,724
Operations:
Year 1 2015 $1,176,511Year 2 2016 $1,519,129Year 3 2017 $1,838,279Year 4 2018 $2,164,146Year 5 2019 $2,501,058Year 6 2020 $2,862,419Year 7 2021 $3,218,221Year 8 2022 $3,583,601Year 9 2023 $3,963,991
Year 10 2024 $4,349,808
Total $28,083,887
Additional Sales Tax Collections for
the
State
of
Texas
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Total Revenues for All Local Taxing Districts and the State of Texas
In total, local taxing districts and the State of Texas will receive the following revenues from theUniversity from construction and over the ten years of its expansion:
City of Victoria: Sales taxes $6,740,133 Property taxes $4,273,193 Hotel occupancy taxes $748,137 Total $11,761,463Victoria County: Sales taxes $2,246,711 Property taxes $2,276,386 Total $4,523,097Victoria County Navigation District $202,728Victoria County Road and Bridge $364,381Victoria ISD $8,763,027Victoria College $1,016,291Victoria County Ground Water District $63,270
Total additional revenues for local taxing districts $26,694,257
Additional Revenues for Local Taxing Districts and the State During
Construction and over the First Ten Years of the Expansion
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State of Texas sales tax collections $28,083,887
Total revenues for the State and localtaxing districts
Return on Investment in Funding to Construct the Initial Campus at the University of Houston Victoria
What is the return on investment for the initial UHV campus?
The return on investment can be measured by comparing the cost of constructing the campus to
the increase in gross area product generated from the operations of the campus, the increase insalaries generated by the operations of the campus, the increase in taxable sales generated from the operations of the campus, the increase in residential property and commercial property addedto local tax rolls by the campus expansion, among others. The earnings of a higher educated areaworkforce and their spending would also greatly expand the return on this investment.
$54,778,144
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The returns on investment for ten years are shown below.
Initial investment to construct the campus:
State funds
to
construct
the
initial
campus $71,580,000Costs of student housing funded by outside sources $32,000,000
Total initial costs
Increases from the operations of the campus:Gross area product, in millions of dollars $2,780Taxable sales in the area, in millions of dollars $435Personal income including salaries of direct and indirect workers $1,520
and financial aid available to students, in millions of dollarsValue of residential and commercial property added to tax rolls, in millions of dollars $108Revenues for the state and local taxing districts, in millions of dollars $55
Number of direct and indirect jobs 1,772
Dollar returns for each dollar invested to construct the campus:
Gross area product $39Taxable sales in the area $6Personal income including salaries of direct and indirect workers $21
$103,580,000
Ten Year Returns on Initial Investment of Costs to Construct the Initial Campus
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an nanc a a ava a e o s u en sValue of residential and commercial property added to tax rolls $1.51
Revenues for
the
state
and
local
taxing
districts $0.77
A discussion of some to the many socioeconomic impacts of higher education and results of other studies of the benefits of higher education, such as provided by universities like UHV is next.
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Socioeconomic Benefits of Higher Education
Many studies have been conducted to describe the socioeconomic benefits resulting from higher education. The 1998 study from the Institute for Higher Education Policy titled "Reaping the Benefits"and the March 2007 Perryman Group "A Tale of Two States And One Million Jobs!!, An Analysis of the Economic Benefits of Achieving the Future Goals of the Closing the Gaps Initiative of the Texas
Higher Education
Coordinating
Board"
document
the
most
significant
private
and
public
economic
and
social benefits that result from higher education. The table below summarizes these benefits.
Some socioeconomic benefits are discussed next.
Social
Reduced Crime Rates Improved Health/Life Expectancy Increased Charitable Giving/Community Service Improved Quality of Life for Offspring Increased Quality of Civic Life Better Consumer Decision Making Social Cohesion/Appreciation of Diversity Increased Personal Status Improved Ability to Adapt and Use Technology More Hobbies, Leisure Activities
Public Private
Economic
Increased Tax Revenues Higher Salaries and Benefits Greater Productivity Employment Increased Consumption Higher Savings Levels Increased Workforce Flexibility Improved Working Conditions Decreased Reliance on Government Financial Personal/Professional Mobility
Support
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n v ua ene s o g er uca on
From the
individuals
perspective,
education
can
lead
to
notable
enhancement
in
quality
of
life
through such avenues as a broader world view, better health, greater civic involvement, and otherdifficult to measure improvements.
In addition to these benefits, the economic gains to individuals are substantial, such as the following:
There is a clear correlation between education level and income level, with many of the most financially rewarding occupations requiring college degrees.
There is also a negative relationship between education level and the likelihood of being unemployed.
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Education and Earnings
As education increases, individual earning potential rises. The average income for Texans, for example, with bachelors degrees was $59,557 in 2009, slightly higher than the national average. The difference in average earnings between persons with a bachelors degree and those with a high school diploma was $29,519, as shown below.
$20,002
$30,777 $38,174
$58,474
$82,491
$20,262
$30,038 $37,320
$59,557
$83,857
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
Less than high school graduate
High school graduate or equivalent
Some college or associates degree
Bachelor's degree Graduate or professional degree
Average Annual Earnings, Age 25+, by Educational Attainment
US Texas
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Earnings
Gap
Likely
to
Grow
Several trends are contributing to increasing differences in the average earnings of those with variouslevels of education.
The shift to a knowledge based economy emphasizing technology has increased the educational requirements of many industries.
A decrease in the relative importance of labor unions and high paying manufacturing jobs for thosewith low levels of education (partly a consequence of global competition) has further widened thegap between earnings for those with a high school diploma and those with some form of higher
educations
According to The Big Payoff: Educational Attainment and Synthetic Estimates of Work Life Earnings, US Census Bureau, US Department of Commerce, issued July 2002 and The Value of Higher Education: Individual and Societal Benefits (With Special Consideration for the State of Arizona), Arizona StateUniversity, School of Business Productive and Prosperity Project (P3), October 2005:
In the early 1980s, the average earnings of a fulltime male worker between the ages of 35 and 44 with a bachelors degree were 38% higher than one with a high school diploma. In the
$20,002
$30,777 $38,174
$58,474
$82,491
$20,262
$30,038 $37,320
$59,557
$83,857
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
$70,000
$80,000
$90,000
Less than high school graduate
High school graduate or equivalent
Some college or associates degree
Bachelor's degree Graduate or professional degree
Average Annual Earnings, Age 25+, by Educational Attainment
US TexasSource: Current Population Survey , US Census 2009
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early 2000s, the difference had climbed to 94%.
Education and Unemployment Relationship
Education is also correlated with greater opportunity and the ability to maintain employment.
Nationally, 6.24%
of
adults
age
25
and
older
with
only
a
high
school
diploma
were
unemployed
in
2008 compared to only 3% of those with a bachelors degree. In Texas, for example, the difference was slightly less.
9.58%
6.24%
4.71%
2.99%
2.03%
6.00%
4.80%
3.76%
2.48%1.94%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
'
Unemployment, Age 25+, by Educational Attainment
Page 32
Societal Benefits of Higher Education
The benefits to society of higher education are undeniable and span a broad spectrum.
They include economic improvements that translate into greater opportunities for all citizens.
With higher education, the Texas workforce is more productive, and the state is more competitive
for future desirable corporate locations and other growth.
In addition, a more educated populace tends to require less social assistance. Lowerunemployment and higher earnings contribute to reducing the need for unemployment benefits and various social services programs. Higher education levels also translate into lower rates of incarceration.
Finally, there are other gains from increasing education levels, including enhanced volunteerism,more active participation in and support of public and philanthropic initiatives, better levels of
9.58%
6.24%
4.71%
2.99%
2.03%
6.00%
4.80%
3.76%
2.48%1.94%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
Less than high school graduate
High school graduate or equivalent
Some college or associates degree
Bachelor's degree Graduate or professional degree
Unemployment, Age 25+, by Educational Attainment
US TexasSource: American Community Surveys , US Census 2008
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community health, and a greater pace of discovery and innovation to sustain social and economic progress.
Increased Productivity and Capacity
Increased lifetime earnings of graduates are an indication of their enhanced contribution to the
economy. The
additional
compensation
can
only
occur
as
a
result
of
the
greater
value
added
createdby educated workers.
The improvement in the productivity and capacity of the individuals attending the institutions hasfar reaching economic benefits. The National Bureau of Economic Research estimated that a 10%increase in the average educational level of workers resulted in a 4.9% to 8.5% rise in productivityin manufacturing and 5.9% to 12.7% productivity improvement in non manufacturing industries asincluded in "Beyond the Incidence of Training: Evidence from a National Employers Survey", workingPaper No. 5231, National Bureau of Economic Research (Cambridge, Massachusetts), 1995, Appendix D.
Enhanced levels of academic research funding lead to important discoveries which are oftencommercialized into products and services that expand output and productivity in fundamental ways. This process ultimately increases the overall capacity of the economy to meet human needs.
Higher Tax Receipts
With higher earnings, the amount of taxes paid rises. In addition to the effect on income taxes, higher incomes translate into more spending for various goods and services subject to sales taxes and other
Page 33
c arges. roper y ax co ec ons are a so en ance as earn ngs are spen on ous ng an o er rea estate assets.
$436
$2,003
$3,488
$7,338
$11,162
$345 $1,608
$2,941
$7,411
$10,685
$0
$2,000
$4,000
$6,000
$8,000
$10,000
$12,000
Less than high school graduate
High school graduate or equivalent
Some college or associates degree
Bachelor's degree Graduate or professional degree
Federal Tax Liability*, Age 25+, by Educational Attainment
US TexasSource: Current Population Survey , US Census 2009
* After tax credits are deducted
Source: Current Population Survey , US Census 2009
* After tax credits are deducted
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Reduced Social Services Costs
Not only does higher education lead to individual improvement in quality of life, it can also translateinto social and economic gains through the reduction of social services costs and dependency on government provided assistance programs. In every state, a larger percentage of those with just high school diplomas report receiving public aid than those with bachelors degrees, according to "The
Investment Payoff:
A
50
State
Analysis
of
the
Public
and
Private
Benefits
of
Higher
Education,
Institutefor Higher Education Policy, February 2005.
Research by the Institute for Higher Education Policy suggests that a one percentage point increase in high school or higher education in the population leads to an approximately 4 percentage point decrease in welfare dependence and almost 2 percentage point decrease in poverty. The same study,Welfare and the Culture of Poverty, The CATO Journal 16(1), suggests that increased education also reduces unemployment. These findings are consistent with other academic research as well.
Statistics show that a large proportion of welfare recipients have low education levels, reducing their ability to find employment and decreasing their earning potential as included in Testimony of NOWLegal Defense and Education Fund on Welfare Reform: Success in Moving Toward Work, submitted to the US House 21st Century Competitiveness Subcommittee of the Education and the Workforce Committee, October 16, 2001.
Public Assistance and Education Level
As education level rises, the percentage of persons receiving public assistance falls.
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3.01%
1.59%
1.30%
0.46%0.32%
1.68%
1.06%
0.80%
0.26% 0.18%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
Less than high school graduate
High school graduate or equivalent
Some college or associates degree
Bachelor's degree Graduate or professional degree
Percent Receiving Public Assistance, Age 25+, by Educational Attainment
US TexasSource: American Community Surveys , US Census 2008
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Incarceration Cost and Education Level
In general, locations with more educated populations have lower crime rates.
The chances of being incarcerated are much higher for persons with lower levels of education. According to one study, Education Pays 2004: The Benefits of Higher Education for Individuals and
Society, Trends
in
Higher
Education
Series,
College
Board,
Revised
Edition
2005,
2%
of
adults
who
had not finished high school were incarcerated, as were 1.2% of those with a high school diploma. By contrast, only 0.1% of those with college degrees were incarcerated.
Better Health
Health care costs are based on an individuals attitude about exercise and food as well as their abilityto obtain health insurance and cover medical expenses.
More education and the corresponding likelihood of a better paying job translates into a greater abilityto finance health care expenses. A larger proportion of people with bachelors degrees (93%) reportbeing in excellent, very good, or good health compared to those with just a high school diploma (82%),according to "The Investment Payoff : A 50 State Analysis of the Public and Private Bene ts of Higher Education, Institute for Higher Education Policy, February 2005. Also, see Mississippis Mandate: Why the Investment in Education Pays off in Mississippi, Institute for Higher Education Policy, May 2006.
Volunteerism and Citizenship
Page 35
On the most basic level, education can help instill civic values and acceptable norms for our society
contributing to
more
activism
and
social
cohesion
according
to
"Mississippis
Mandate:
Why
the
Investment in Education Pays off in Mississippi", Institute for Higher Education Policy, May 2006.
Some 38% of Texans with a bachelors degree reported volunteering in 2004, compared to 22% of thosewith high school diplomas "The Investment Payoff: A 50 State Analysis of the Public and Private Benefitsof Higher Education, Institute for Higher Education Policy, February 2005
Texans with a bachelors degree were also more likely to have voted in the 2000 presidential election(78% compared to 51% of those with a high school diploma).
More on Closing the Gaps Study
The Texas Higher Education Coordinating Board, which has the responsibility for overseeing manyaspects of college and university policy within the state, has been focused on the educational challenges of the economic and demographic realities confronting Texas for many years.
In an effort to develop a strategy for dealing with these issues, the THECB undertook a comprehensiveprogram to address the underlying patterns in college attendance and other relevant issues. As an outgrowth of this Closing the Gaps endeavor, specific goals related to the number of Texans
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attending college and completing various programs by 2015 were developed. Similar objectives were established for federal research funding. These targets have subsequently been revised to reflect more recent patterns.
The Closing the Gaps initiative represents both (1) a well grounded and realistic assessment of theimportance of improving Texas higher education attendance, graduation rates, and research
participation and
(2)
measurable
milestones
to
achieve
the
needed
outcomes.
As discussed earlier, The March 2007 Perryman Group "A Tale of Two States And One Million Jobs!!, An Analysis of the Economic Benefits of Achieving the Future Goals of the Closing the Gaps Initiativeof the Texas Higher Education Coordinating Board" documents the benefits of closing the gaps by providing more funding for higher education in Texas.
Some of the economic and fiscal impacts in that study are discussed below.
Employment
By 2030, if the Closing the Gaps objectives are achieved, an additional 1,023,281 Texans will be employed relative to projected gains under a baseline scenario
Gross State
Product
Annual output (gross state product in constant (2006) dollars) could be expected to be some $194.5
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on o ars g er os ng e aps goa s are me an un er ase ne con ons. ver e entire analysis period (2006 2030), Texas enjoys cumulative net gains from this initiative of about $1.9
trillion.
Total Expenditures
Annual expenditures (a measure of all dollars changing hands in the economy would be nearly $489.6 billion higher (in constant 2006 dollars) by 2030 with successful implementation of Closing the Gaps.
Personal Income
Annual personal income in the state would be almost $122 billion higher by 2030 (in constant 2006 dollars) if the Closing the Gaps targets are reached.
Fiscal Impacts
of
Achieving
the
Goals
of
"Closing
the
Gaps
The economic benefits associated with a more educated workforce and greater research activity translate into fiscal gains for the State and local governments as well. This increase stems from gainsin production, income, sales, and other aggregates which stimulate tax collections as well as reduced
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public assistance social costs associated with the improved outcomes.
By 2030, the net annual fiscal gains arising from achieving the goals of Closing the Gaps include approximately $8.7 billion in State resources and $7.5 billion in local revenues (in constant 2006 dollars). Over the entire 2006 2030 period, the State sees an incremental net benefit of more than $85.3 billion, while local entities receive about $73.5 billion. These amounts are several times as large as the
estimated costs
of
this
initiative.
Over the implementation period through 2015, the cumulative State revenues are approximately equalto requisite outlays. Beyond that point, the State receives substantially more than is needed to maintain the patterns established by Closing the Gaps(much of the initial spending is for constructionof new facilities for the expanded enrollments). Over the entire 2006 2030 period, the State generates about $8.08 in revenues for every $1 in spending.
Social Returns
The social return on public spending is also extremely impressive. In 2015, the annual returns perdollar of State outlays include $11.92 in total expenditures, $4.77 in gross state product, and $3.02 in personal income. By 2030, these gains escalate to $46.36 in spending, $18.41 in output, and $11.54 in income.
In 2015, the annual gains per dollar of cumulative public (State and local) and private spending include $6.21 in total expenditures, $2.49 in gross state product, and $1.57 in personal income. By 2030, theannual payoff per dollar of cumulative outlays totals $24.15 in total expenditures, $9.60 in gross
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s a e pro uc , an . n persona ncome.
Conclusion
In conclusion, a residential / destination university has the potential to greatly improve the quality of life throughout the Victoria region. As stated in the report, a greater educated populous will help reduce per capita social costs related to crime, medical care and general poverty by better preparing individuals to earn high wages and, therefore, positioning them for greater success.
In addition to the individual benefits, a destination university in Victoria has the potential to bring tremendous economic benefits to all levels of business and government through increases in employment opportunities, expanded markets, and increasing tax base. Most notable is the
estimated $1.5 Billion of direct and indirect salaries created over the first 10 years through increasedemployment at the University and related spin off activity. The impact to local tax coffers of over $26 Million will greatly improve the financial position of local governments and help stabilize tax rate growth while providing new revenues to provide traditional and expanded services.
Finally, a destination campus has the potential to bring thousands of new students to the Victoria region, some of whom will choose to stay and become part of the educated workforce the area will need in order to stay competitive in a global environment.
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8/7/2019 Destination University Economic Impact Report
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A discussion of the conduct of this analysis is next.
Conduct of this Analysis
Impact DataSource conducted this analysis using data, rates and information supplied by the University and
local taxing
districts.
In
addition,
Impact
DataSource
used
some
estimates
and
assumptions.
Impact DataSource is a 16 year old Austin economic consulting, research and analysis firm. The firm has conducted over 2,500 economic impact analyses of numerous projects in Texas and 26 other states. Inaddition, the firm has developed economic impact analysis computer programs for several clients, includingthe New Mexico Economic Development Department.
Some of the economic impact analyses conducted by the firm include those for the following collegesand universities:
Weatherford College, Weatherford, Texas,
Southwestern Baptist Theological Seminary, Fort Worth, Texas,
North Dakota State University, Fargo, ND,
Minnesota State University Moorhead, MN,
Concordia College, Moorhead, MN,
Del Mar College, Corpus Christi, Texas
Texas A&M University Central Texas, in Killeen Texas,
Santa Fe College, Santa Fe, New Mexico,
Navarro College Midlothian, Texas campus,
an nge o tate n vers ty, an nge o, exas,
Texas Christian University, Fort Worth, Texas,
East
Williamson
County
Higher
Education
Center,
Taylor,
Texas
(a
proposed
campus
housing
facilities and classes for three colleges),
Belhaven University, Jackson, Mississippi, and
Texas A&M University, Corpus Christi.
The firms principal, Jerry Walker, performed this economic impact analysis. He is an economist and has Bachelor of Science and Master of Business Administration degrees in accounting and economics from Nicholls State University, Thibodaux, Louisiana.