Making a $316.1 Million Mark on the Economy
The value of SPSCC influences both the lives of students and also the regional economy. The college serves a range of industries in the SPSCC Service Area, supports local businesses, and benefits society as a whole in Washington from an expanded economy and proved quality of life.
The benefits created by SPSCC even extend to the state and local government through increased tax revenues and public sector savings.
The purpose of this study is to investigate the economic impacts created by SPSCC on the business community and the benefits that the college generates in return for the investments made by its key stakeholder groups— students, taxpayers, and society. The region the college serves is defined as the SPSCC Service Area and consists of Thurston County. The following two analyses are presented:
- Economic impact analysis
- Investment analysis
All results reflect student and financial data for Fiscal Year (FY) 2014-15. Impacts on the regional business community are reported under the economic impact analysis. Results are measured in terms of added income. The return on investment to students, taxpayers, and society are reported under the investment analysis. Both analyses are described more fully in the following sections.
Economic Impact Analysis
The Economic Impact Analysis dissected the college’s operations spending, student spending, and the impact of alumni who remain in the region and purchase goods and services.
Combined, the total impact last fiscal year was $316.1 million. Broken down,
- $34 million comes from day-to-day operations spending, payroll, and benefits;
- $12.6 million comes from current students; and
- $269.4 million is generated from alumni working in the region.
Additionally, the report presented an Investment Analysis that proves significant ROI to students, taxpayers, and society as a whole.
The study states that, “For every one dollar students invest in SPSCC in the form of out-of-pocket expenses and forgone time and money, they receive a cumulative of $3.60 in higher future earnings, or a 15.4% average annual rate of return.”
Return for state and local taxpayers are nearly as strong as it is for students—SPSCC returns more to government budgets than it costs. For every one dollar of public money invested in SPSCC, taxpayers receive a cumulative value of $3.10 over the course of the students’ working lives; an average annual rate of return of 10.4%.
Though harder to quantify, the report shows that from a societal perspective, there is a statistical correlation between education and an increased state economic base. People who attend college typically have a higher quality of life, which generates social savings in areas of health and wellness, crime, and unemployment. When considered along with the economic impact numbers for students and alumni living and working in the region, the reports shows that for every dollar invested in education at SPSCC by students, taxpayers, or the college itself, an average of $9.60 in benefits will accrue to society in Washington State.
The results of this study demonstrate that SPSCC creates value from multiple perspectives. The college benefits local businesses by increasing consumer spending in the region and supplying a steady flow of qualified, trained workers into the workforce. It enriches the lives of students by raising their lifetime earnings and helping them achieve their individual potential. It benefits state and local taxpayers through increased tax receipts across the state and a reduced demand for government-supported social services. Finally, it benefits society as a whole in Washington by creating a more prosperous economy and generating a variety of savings through the improved lifestyles of students.