UVM commencement May 2016. UVM photo.
Vermont Business Magazine According to a new study, the University of Vermont created $1.33 billion in economic value for the state of Vermont in 2014-15. The university also supported 11,287 jobs throughout the state and generated $78.8 million in state and local taxes. The University of Vermont (UVM) is a powerhouse for economic and community activity across the State of Vermont,” concludes the study, which was conducted by Tripp Umbach, a Pittsburgh-based research firm that specializes in economic impact analysis.
UVM created economic value, the study reports, in three ways: through its spending in the state, through the employment opportunities it offers, and through state and local tax revenue generated from spending, research activities and the visitors the university attracts to the region.
“We have long known that The University of Vermont is a powerful driver of the Vermont economy,” said Tom Sullivan, president of the University of Vermont. “This study shows quantitatively, and authoritatively, just how large that contribution is. We’re very proud of the role UVM plays in the state’s economy and have every confidence our impact will only grow in the future.”
UVM spending impacts
UVM’s spending in Vermont takes three forms: direct, indirect and induced. Direct expenditures are for goods and services purchased by the university, its faculty, staff, students and visitors.
Indirect and induced spending are “multiplier effects” when businesses in the state that receive direct payments from the university and the employees who received salaries from these companies re-spend the money within the state, creating the need for even more jobs.
UVM’s direct expenditures totaled $556.1 million. Indirect spending was $770.6 million, bringing the total to $1.3 billion in economic activity.
UVM employment impacts
UVM also employs 4,400 faculty, staff and students. Their spending not only has a direct impact on the Vermont economy, it supports many other additional jobs in the state and region. These include jobs created by supply and equipment vendors, contractors and laborers for the construction and renovation of university facilities, and jobs created in the community at hotels, restaurants and retail stores in support of the university’s workforce and its visitors.
Combining UVM’s direct employees with jobs created by university spending results in the 11,287 figure cited in the report.
UVM tax impacts
It’s a common misperception that public universities don’t generate tax revenue.
Through UVM’s local spending, as well as its direct and indirect support of jobs, the university generates a significant amount of tax revenues that contribute to the local and state tax base.
Its employees, students and the visitors the university attracts to the state also spend locally and create tax revenue, bringing the total to $78.8 million in state and local taxes.
First study to show economic impact of UVM research
The study looked at a variety of subsets of the university’s contribution to the state economy.
A critical one is the effect UVM’s large research enterprise – UVM is the state’s only research university – has on economic activity in the state.
The new study is the first to gauge the economic impact of UVM research.
In 2014, UVM reported $128 million in research and educational grants and contracts, 84 percent of which came from out of state. As a result of its research activities, $157.9 million was generated in the state, according to the study. UVM’s innovative research efforts also supported 809 jobs in Vermont and added $5.3 million in state and local taxes.
UVM research also affects the Vermont economy via new product development and technology commercialization, according to the study.
The study also broke out the impact of UVM’s Robert Larner, M.D. College of Medicine and the College of Nursing and Health Sciences. The economic contributions of both were calculated separately from those contributed by the University of Vermont Medical Center.
The College of Medicine generated $403.3 million in economic activity, supported 2,616 jobs and generated $18.8 million in state and local taxes. The College of Nursing and Health Sciences had an economic impact of $38.2 million, supported 419 jobs and produced $28 million in state and local taxes.
Community work adds $15 million
The report also calculated the impact of university employees and students who are active in the Vermont community through community service, local fund raising and cultural events.
Calculating the value of the hours contributed and of donations made, the report concluded that university faculty, staff and students provided a community impact of $15 million in fiscal year 2014.
The presence of the university is felt through donations made to community organizations such as the United Way or YMCA, as well as time donated for volunteer activities such as Habitat for Humanity or tutoring services for adolescents.
Finally, the study gauged UVM’s economic impact via the larger earning power its undergraduate and graduate students have once they earn their degrees. Comparing the earning power of the 2,319 UVM undergraduates who earned degrees in 2014, 60 percent of whom stay in state, with their earning power if they had only a high school degree, the report concludes that the additional wage premium amounted to $30.8 million. A similar calculation with the 586 UVM students who earned advanced degrees in 2014 found that the additional dollars in salary came to $5.9 million.
“We are confident that the report presents a highly accurate picture of UVM’s impact on the state’s economy,” said Richard Cate, the university’s vice president for finance.
Founded in 1990, Tripp Umbach is a nationally recognized consulting firm that provides comprehensive services ranging from research and strategic planning to economic impact analyses for medical schools, hospitals, non-profit organizations, communities and corporations throughout the world. The firm has completed more than 150 economic impact studies over the past 25 years for clients in North America, Australia and Europe. Since 1995 Tripp Umbach has completed national studies of the economic impact of all 130 medical schools and 400 teaching hospitals for the Association of American Medical Colleges (AAMC).
The cost for the study was $25,000, which was privately funded.
Source: UVM 10.19.2016