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BGSU delivers solid economic benefit to state, study finds BOWLING GREEN, O.—In addition to providing a college education to about 20,000 students a year, a new study has found that
Bowling Green State University is also an economic engine that pumps more than $700 million annually into the Ohio economy.
Economist Dr. Michael Carroll of the University’s Center for Regional Development (formerly the Center for Policy Analysis
and Public Service), examined BGSU’s economic impact on the state and presented his findings Friday to the University’s Board
of Trustees.
According to his report, “Measuring Bowling Green State University’s Impact on Ohio’s Economy,” BGSU generated more money
in tax revenues than it received in state appropriations in 2002.
That year, BGSU received $84.6 million in state appropriations. During that time, BGSU economic activity generated $85.9 million
in tax revenues. The total economic impact of the University on Ohio’s economy was $704 million. “Thus, for every dollar BGSU
receives in state support it generates more than $8 in economic activity,” Carroll found.
The University takes state appropriations, couples them with tuition and grant revenues, and produces the $704 million impact,
Carroll states. If that figure were calculated nationwide, it would come to $1.3 billion in revenue for the United States
from BGSU.
Using the University’s audited financial statements from 2002—the most recent figures—Carroll, an assistant professor of economics
in the College of Business Administration, measured such aspects of the University’s financial activities as expenditures
for payroll, capital improvements, maintenance of the physical plant including local utilities, and purchases of tangible
goods and services (direct impact). In addition, if Bowling Green purchased any of those goods or services from Ohio suppliers,
a further state benefit was derived and included in the tally (indirect impact).
He also looked at student, employee and visitor spending, and tax revenues generated by BGSU for local, state and federal
governments. In addition, he calculated the economic impact of the dollars earned by employees of the University and the businesses
with which it deals for consumer spending (induced impact).
The results were impressive. Particularly in rural areas, “universities are significant economic engines in themselves,” Carroll
writes in the executive summary of the report.
While universities’ main business is and must always be education, an important by-product is their contribution to the financial
well-being of their communities and the state. Another beneficial by-product is the educated workforce they create that is
so important if states are to compete in today’s global economy, Carroll told the board.
The $704 million figure is conservative. Carroll’s report did not attempt to measure the economic impact of faculty earnings
from private consulting, patent and book royalties or the economic impact of faculty and staff expertise used by businesses
and public sector organizations. Nor did he include the added value of student earning capacity, though it has been estimated
by others that having a four-year degree enables graduates to earn $1 million more than others over a lifetime.
With its workforce of more than 1,500 faculty and staff, BGSU is among the region’s largest employers. The University paid
$142,014,217 in gross salaries (excluding benefits) in 2002. After subtracting taxes and other deductions from gross pay,
it was assumed, based on Bureau of Labor Statistics regional guidelines, that 85 percent of the gross pay on average was available
for consumption.
Carroll allocated that amount ($120,712,084) into categories such as health care, food, clothing and housing, based on the
BLS Consumer Expenditure Survey. It was assumed that most of those dollars were spent in Ohio.
The combination of the direct, indirect and induced impacts of employee spending totaled $167,587,856 added to Ohio’s economy,
and supports 1,439 jobs in the state.
Likewise, the money the University spends on capital improvements and operations in turn generates additional revenue for
the state. For example, the $179,357,100 that BGSU spent on capital improvements and operations in 2002 then generated $52,708,701
through the purchase of labor and raw materials from local sources.
“An additional $89,868,118 of economic activity was created as the employees of the construction firms and local suppliers
spent the wages earned as a result of University contracts,” the report says. Thus, the total impact from capital improvements
and operations was $321,933,819.
This represents 5,472 full-time jobs created as a result of capital improvements and operations activities—some directly,
others from business-to-business activity and the rest from employee spending of those industries.
University students also spend money locally and contribute to the economy. Carroll looked at resident undergraduates, off-campus
undergraduates and off-campus graduate students.
It was calculated that the three groups together spent $136,508,950, which had an economic impact of $190,931,168 on Ohio’s
economy and generated 1,636 Ohio jobs.
Carroll also looked at visitor spending, which he said is harder to estimate. He used two other studies, from Boston and Notre
Dame, as guidelines. From shopping to lodging, food and entertainment, BGSU visitors spent $14,872,825 locally in 2003. Just
as in the other cases, that spending then generated another $24,409,611 in economic activity and supported 1,636 jobs, mostly
in Wood County.
Businesses impacted by the University range from farming to retail stores, health providers, all types of food services, construction
industries to transportation concerns and many more.
(Posted December 17, 2004 )
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