The most comprehensive economic impact study in Genesee Community College's history, released this morning, has concluded that the College is responsible for bringing more money into the public treasury than it takes out. Using rate-of-return analysis, independent researchers from an Idaho-based research organization found that taxpayers now earn a 19% real money rate of return on their investment in the College.
Most services funded by state and local governments are undertaken because taxpayers want them, but they are not profitable in the private marketplace and do not generate positive economic returns, said Dr. Kjell A. Christophersen, author of the study. Community colleges, however, bring higher incomes to the communities they serve - and with higher wages and salaries come higher tax receipts. "Genesee Community College is well beyond the break-even point," Dr. Christophersen told thirty community leaders at the College's Batavia Campus today. "Every public dollar invested in Genesee Community College in today's dollars brings a cumulative stream of new revenue, currently estimated at $6.30, back to taxpayers. The simplest way to put it is that Genesee Community College makes money for taxpayers. If this college had not been present in the Genesee-Livingston-Orleans-Wyoming region these last 39 years, local residents would be paying higher taxes today."
The study estimated that Genesee students earn $137 more per year for each credit hour of instruction received at Genesee. Former students with degrees earn, on average, $9,600 more in today's dollars, than individuals who did not attend Genesee. "These individuals pay a large portion of the area's taxes, and a significant part of their tax payments are directly attributable to the higher earnings accruing as a result of their education at Genesee," Dr. Christophersen said.
The study also examined what Dr. Christophersen termed "social avoidance costs" - public expenses that are minimized because of the College's presence in the community. Local taxpayers avoid almost $2.3 million in costs each year because college graduates take greater responsibility for their health and well-being, the study concluded. Genesee saves area taxpayers $429,000 annually in welfare and unemployment benefits; $995,000 in publicly funded treatment for diseases resulting from substance abuse; $494,000 in criminal justice costs; and $361,000 in health-related employee absenteeism.
The study was conducted by CCbenefits, Inc., a research organization Dr. Christophersen established to study the economic and social impact of higher education. Traditional economic impact studies simply measure the flow of college-related spending - college purchases, the portion of faculty and staff salaries spent locally, and student spending - within the region and the volume of local businesses and jobs supported through that spending. Dr. Christophersen's state-of-the-art model examines the effect of both short-term college-related spending and long-term economic contributions, including tax payments, of students and former students. The model estimates with great precision the income earned as a direct result of the skills students learn in college, the additional taxes they pay, and the public costs that decline as the result of a college-educated citizenry. The economic impact model has been field tested throughout the United States, and peer-reviewed and endorsed by independent economists.
Dr. Kjell Christophersen has 28 years experience as a senior economist developing and analyzing economic models in Africa, Asia, the Near East, Europe, the Caribbean, and the U.S. He has served as team leader on many assignments to carry out activities that include economic modeling, project appraisal, assessments, planning, design and evaluation, feasibility and recurrent cost studies, and training in economic and financial analysis.
One of the most surprising findings of the study was that Genesee Community College and its former students bring $501 million in annual local income to the Genesee-Livingston-Orleans-Wyoming region - 13% of all personal income in the region. "We have known for many years that our students and former students are an important part of the local economic infrastructure," said Genesee President Stuart Steiner. "Wherever you go locally, you meet business people, health care professionals, and service professionals who have attended Genesee. We did not realize the extent of the contributions these individuals make to our local economy. Clearly, Genesee Community College has become one of the most significant tools of economic growth in the region."
Since its founding in 1966, about 17,000 individuals have graduated from Genesee. Tens of thousands more individuals have completed coursework for credit or have completed customized business training offered by the College. The great majority of people who receive education from Genesee live and remain in Western New York. About 63% live in the GLOW region. "Genesee Community College gives these students the tools they need to make a good living, and these students then return a significant economic benefit to the region they call home," Dr. Christophersen said.
The study found that a Genesee Community College education pays off. The $9,600 "premium" that graduates earn is equivalent to a 23% rate of return on investment. "Consider the money that a student puts into his or her education, including lost wages during the period of education, and students begin to see a very tangible return soon after they complete their studies," Dr. Christophersen said. "A Genesee Community College education brings economic benefits to individuals and to the region as a whole far in excess of what anyone could earn through virtually any other type of conventional investment vehicle."
The economic impact study tells only part of the Genesee Community College story, according to Dr. Steiner. "We are very proud of these study results, and they clearly demonstrate the value of the College in financial terms," he said. "But Genesee Community College is about more than economic return. Almost forty years ago, we committed ourselves to giving students the tools they needed to live productive and satisfying lives, and to be good parents and good citizens. We believed then, and we believe now, that the ultimate value of Genesee Community College is not just about making a living. It's about making a life."
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Please note: Genesee's Office of External Affairs will be sending a hard copy of Genesee Community College's Economic Impact Statement through regular U.S. mail.