Colleges Boost Economy

Studies suggest ASU campus will have huge impact


A 6,000-student Arizona State University campus in Payson would likely have an economic impact on Rim Country of $100 million to $150 million annually, based on studies of the impact of other colleges.

College campuses can have enormous economic benefits — both direct and indirect, according to studies of campuses elsewhere.

For instance, the 25,000-student Northern Arizona University generated total spending of $610 million annually in Coconino County, according to an economic impact study by researchers from the Bank One Center for Business outreach based at NAU. In addition, direct and indirect spending by NAU and its students had a $71 million impact on Maricopa County, a $15 million impact in Yuma where NAU has a branch campus and $74 million in the rest of the state.

ASU’s proposed Payson campus would have about a quarter as many students as NAU. Moreover, Payson has roughly one-quarter the population as Flagstaff, with its 65,000 residents. As a result, the NAU study suggests the campus here would generate perhaps a quarter of the annual impact locally — or about $150 million annually.

Another study of a 6,000-student community and technical college in Minnesota came up with roughly similar estimates — with a total annual economic impact on the region of $119 million, including both direct and indirect effects. Direct spending accounted for $27 million, with spin-off benefits accounting for the rest.

That study by Economic Modeling Specialists Inc. concluded that the college accounted for 2.3 percent of the region’s economic activity.

The ASU campus planned for Payson would likely fall somewhere in between the two impacts, since it would offer more advanced degrees than the Minnesota Community College, but lack the graduate degrees of the NAU campus.

Other elements of the still-evolving plan for an ASU campus here would likely increase its economic impact, including plans for a $50 million solar energy power generating plant, a 500-room conference hotel that would draw national academic conferences and a research park that would have a solar cell assembly plant and other businesses.

The ASU project faces increasingly urgent deadlines, starting with the expiration of federal incentives crucial to the solar cell power generating facility. ASU hasn’t yet signed a binding commitment to build the campus here, but Payson Mayor Kenny Evans said plans are nearly finalized and he expects all parties to sign the final agreements before December.

The twin studies of the economic impact of colleges on rural communities underscores the stakes for Rim Country, with its high unemployment and heavy dependence on tourism and construction — both seasonal activities that have been hard-hit by the recession.

The study of the economic impact of Brainerd Lakes College in Minnesota concluded that spending on the college provided a handsome rate of return for both students and government.

In the course of 30 years, the higher pay students received as a result of their degree generated $93 million in added regional income, the study concluded.

Students recovered the cost of their degrees in higher wages within 10 years. The researchers estimated that students got $5 in economic benefits for every $1 spent on their education. That worked out to an annual rate of return of 15.5 percent.

Moreover, the higher wages earned as a result of the additional schooling boosted local tax revenues by $16 million annually.

In addition, the students reaped all kinds of other advantages — which saved the state a lot of money down the road. For instance, students who got a college degree had lower rates of smoking and alcohol abuse and were less likely to collect unemployment or welfare. They were also less likely to commit crimes.

As a result of the increased education level of its residents due to the degrees awarded by the 6,000-student college, the state saved $760,000 on those social programs annually. All told, taxpayers saw a 5.2 percent rate of return on the money spent on the college.

The study of the economic impact of NAU found a similarly broad array of benefits.

For instance, NAU students spent $169 million — $108 million of it in Coconino County. NAU and its employees spent $279 million — $265 million of it in Coconino County.

Visitors to the NAU campus spent $41 million.

All told, NAU accounted for more than 10 percent of the jobs in Coconino County — or 14 percent of all jobs when the spinoff effects of spending by NAU employees was included.

NAU employed 8,287 people, with another 4,250 positions created by businesses providing services to the campus, students and employees.


Dan Varnes 5 years, 5 months ago

College campuses can also have enormous economic costs — both direct and indirect...

Any honest discussion will include the COSTS and not just the potential financial gains.


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