April 5, 1999            

Contact: Bob Bruce, (503) 725-5714
Source: Chancellor Joe Cox, (541) 346-5700

   
Study Shows OUS Universities Return $2 for Each $1 Invested

EUGENE - Oregon's public universities return $2 for every $1 of state investment, according to a new study done by an independent research firm.

The study, done by ECONorthwest of Portland, says Oregon's seven public universities provide a net statewide economic impact of nearly $600 million a year. That's more than double the $297 million in tax dollars the State of Oregon appropriates to higher education annually.

"The figures really show the significance of our public universities to the Oregon economy," said Chancellor Joe Cox of the Oregon University System, which commissioned the report.

"In the past, we've only had anecdotal information on the value of our universities to the state. This study gives us objective information to use as a baseline performance indicator. We intend to use the information to measure the continuing performance of our system and its campuses."

The new study looked at three distinct indicators. It analyzed spending by the universities, their students and vendors. It also projected a rate of return for additional investment, and calculated what the state and individuals gain from the "knowledge benefit" of a higher education.

In calculating total economic activity, ECONorthwest found that OUS employees, students, visitors and vendors generated about $1.5 billion in sales, accounted for about $1 billion in income for Oregon workers, and supported more than 26,300 full-time jobs in fiscal year 1998.

They arrived at net impacts by not counting state appropriations.

The study shows a net impact of $596 million in sales, $443 million in income to workers, and a net of 12,200 non-university new jobs added to the Oregon economy by the state's public universities.

Researchers said 70 percent of the public universities' direct spending for goods and services, 87 percent of capital expenditures, and 98 percent of wages and salaries stay in Oregon.

They also estimated a twofold payback on future investments of state tax dollars. Additional resources, the report says, would help to retain the state's best and brightest students, attract more in the way of federal and public grants and contracts, attract talented non-resident students, and increase out-of-state visitor spending.

"Each $1 million incremental increase in state appropriations would yield an additional $2 million in new, net economic output," the report said.

On an individual basis, the study said students who enter OUS schools will yield a sizeable "knowledge benefit" to Oregon because of their higher education.

For study purposes the researchers looked the Class of 1977. They projected that the 17,000 students in the Class of 1977 will earn $3.1 billion more over their lifetime from their college experience. They are also projected to add $1.3 billion more to spending for goods and services because of increased earning power and higher levels of consumption. Thus, their total economic impact as college-educated is estimated at $4.4 billion over their lifetime.

Assuming that 62 percent remain in Oregon - the same percentage of OUS graduates that traditionally remain here - state coffers also will grow as the Class of 1997 remits higher taxes. The study estimates they will add $247 million more to the Oregon's tax revenue over their lifetime. According to the study, that's a return of 130 percent more than Oregon invested in their education.

That's a return Oregon will accrue year after year with successive graduating classes.
 

 

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