Future of Kansas rests on economic impact of FHSU and other Regents institutions

As the Kansas Legislature struggles to write a fiscal year 2012 budget with $500 million less in resources than were available in the current year, representatives of the state's higher education system caution than cuts would actually hurt the economy in future years.

"Through research, education and workforce training, the seven state universities, 19 community colleges and six technical colleges collectively are one of the key engines driving the economy," Dr. Edward H. Hammond, Fort Hays State University president, said during a news conference today on the Hays campus. "Although the pressures to control spending are real, legislators must realize that cuts to higher education will be counter-productive for Kansans."

President Hammond cited a recent study, "The Impact of the Kansas Board of Regents System to the State's Economy," to show how critical higher education is to a healthy economy. The study, published in March, was conducted by the Goss Institute for Economic Research, Denver.

"The study shows that each tax dollar the state spends for the Regents system results in $11.94 in Kansas economic activity," the president said. "That is almost a 12:1 return. It would be hard to imagine a better investment for the state or for any other entity in today's economic environment."

He said the Regents system produced approximately $7.3 billion in overall impacts, $3.4 billion in wages and salaries, and $485 million in state and local tax collections. The study showed that the payback period -- the number of years required to recover taxpayer support -- was less than five years for most occupations of graduates. In other words, most graduates from Regents institutions pay back as much in taxes in five years or less than the state spent in tax dollars to educate them.

Also, spending by Regents institutions supported an average of 95,327 jobs with a total payroll in 2010 of $3.4 billion. The average salaries or wages for the direct and indirect jobs was $35,430.

"According to the Bureau of Labor Statistics, unemployment rates in January 2011 were 16.5 percent for workers without a high school diploma, 10.7 percent for workers with a high school diploma, 8.5 percent for workers with an associate degree and just 4.5 percent for workers with at least a bachelor's degree," the president said.

In addition, from 1994 to 2009 workers with a bachelor's degree or higher enjoyed wage growth of 92.6 percent, compared to 50.0 percent for workers with an associate degree, 50.3 percent for workers with a high school diploma and 52.6 percent for workers without a high school diploma.

"The facts are clear," he said. "By elevating the education level in our state, the Regents system is boosting income and lowering joblessness for Kansans."

The study also showed direct benefits for the Kansas counties where Regents institutions are located.

"The presence of the 32 institutions increases the attractiveness of the home community," the president said. "The study examined U.S. Census data for the past four decades and concluded that of the 41 Kansas counties that suffered population losses in each of those decades, 37 did not have a Regents institution. In the case of FHSU, the just-released 2010 Census data showed that Ellis was the only county in northwest Kansas that did not lose population since the 2000 Census. The population grew to 28,452 from 27,505 a decade ago."

Dr. Hammond said the presence of Regents institutions also encourages the startup or relocation of other businesses to Kansas. "The study shows that between the years 2000 and 2008, counties with state universities added 13.7 high-tech companies per 100,000 population, and counties with community and technical colleges added 2.8 high-tech firms per 100,000 population," he said. "By comparison, the median county with no Regents institution saw no change in the number of high-tech firms."

President Hammond said the Regents institutions also draw people from out of state. "Only 10 percent of all Kansas residents come from outside the state, but nearly a fifth of students attending a Regents institution come from outside Kansas," he said.

The Regents study addressed the individual impacts of each of the institutions, including FHSU. With an enrollment of 11,883 on the 20th day of the fall 2010 semester, FHSU had an operating budget of $85,608,180 for the period of the study, fiscal year 2010. Using a multiplier formula that measures initial spending and the spillover effect of those dollars, FHSU had a total economic impact of $256,372,573. It had an employment impact of 3,833 jobs. During the year studied, FHSU directly employed 987 individuals. The FHSU impact on wages and salaries was $110,180,951. And, the FHSU contribution to the income of self-employed individuals was $12,691,283.
"The study measured an additional impact, which it labeled volunteerism, that has special significance for FHSU," the president said. "It defined volunteerism as volunteer services that students, faculty and staff provide to local non-profits, individuals and businesses. Because of the great emphasis FHSU places on civic involvement, the residents of Ellis County and western Kansas receive a disproportionate share of those benefits. The study showed a volunteerism impact of $13,071,300 for FHSU, which is significantly greater than the other two regional universities in the Regents system. By
comparison, Emporia State had a volunteerism impact of $6,888,200, and Pitt State had a volunteerism impact of $7,842,000."

"A university education is widely recognized as an investment that pays a lifetime of dividends, in the form of better jobs and higher incomes," President Hammond said. "But it does more than that. A university education alters the path of people's lives. It helps them fulfill their aspirations to become artists, business and organizational leaders, teachers, health care professionals, and more. And most important in these difficult economic times, higher education stokes the economic furnace to create a brighter future in Kansas."

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