Economic Impact of Wake Technical Community College on Wake County

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Economic Impact of Wake Technical Community
College on Wake County

• Fiscal Year 20022003 (FY03)
• July 1, 2002June 30, 2003
• sponsored by Wake County Economic Development
  Program, Greater Raleigh Chamber of Commerce
• prepared by Omega Associates, LLC

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What gives Wake County a Competitive EDGE in
economic development?
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What Brings Companies to Wake County?
Source Omega Associates Focus Groups, 2003
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Wake Techs Mission Workforce Development

• Wake County is distinctive in that 44 percent of
  its adult population has a four-year degree or
  more.
• As College for the Real World, Wake Tech
  provides education and skills training for the
  56 percent of Wake Countys adult population
  without a four-year degree, supportingthe
  workforce needs of business and industry.
• Wake Tech also provides real-world skills
  training for adults who have four-year degrees
  or more.

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Future Jobs Require More Education

• U. S. Labor Department projections report
• ... 7080 percent of all future jobs will
  require more than a high school education and
  less than a four-year college degree.

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College for the Real World Building a Stronger
Economy for Wake County

• Wake Tech offers high quality, affordable,
  accessible college-level education and workplace
  skills training for Wake County.
• A Wake Tech education empowers local citizens
  through real world higher education to
  achieve higher incomes and a better quality of
  life.
• Technical training offers local employees
  increased knowledge, improved skills and higher
  potential earnings.
• Trained workers are more productive and enable
  their employers to maximize output and
  profitability.
• Wake Technical Community College is a key to
  economic development in Wake County.

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Wake Technical Community CollegeRevenue Sources
FY03

• Primarily outside Wake County
• State (revenue and capital appropriations) 28.86
  million 48.71 percent
• Federal (grants and contracts) 7.04
  million 11.88 percent
• Primarily inside Wake County
• County (revenue and capital appropriations)
  8.60 million 14.51 percent
• Tuition and fees 7.88 million 13.30
  percent
• Other sources 6.88 million 11.60 percent
• Total Revenue 59.26 million
• Interest income capital and non-capital grants
  and gifts

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Our resources include people ...

• ... Students
• 15,238 curriculum students (unduplicated
  headcount)
• 36,205 continuing education students
  (unduplicated headcount)
• ... Employees
• 728 full-time faculty and staff
• 1,363 part-time faculty and staff
• ... Volunteers
• 12 trustees
• 22 foundation directors
• nearly 400 advisory committee members (59
  committees, serving 133 academic programs)

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Why do we need an economic impact study of Wake
Tech?
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Economic Impact Study Long-term Goals

• Quantify the annual economic impact of Wake
  Technical Community College on Wake County.
• Publicize the results of the economic impact
  study among various groups.
  
• Increase awareness among the general public of
  Wake Techs value to Wake County via news
  articles and community presentations.
• Increase support for Wake Tech among political,
  business and community leaders.

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Measures of Economic Impact Estimated in This
Study

• Traditional
• Direct Budget Expenditures
• Indirect Multiplier Effect
• Innovative
• Individual Education-Enhanced Earnings
• Dynamic Attraction for Area Investments

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The First Traditional Measure of Economic Impact

• Direct Expenditures
• Presents actual operational and capital budget
  expenditures of Wake Tech for FY03

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Wake Techs Impact Direct Expenditures FY03

• College Operational Expenditures 56.46 million
• Salaries and benefits paid
• Goods and services purchased
• Capital Expenditures 9.09 million
• Construction, buildings and equipment
• Total Direct Impact 65.55 million

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The Second Traditional Measure of Economic Impact

• Indirect Multiplier Factor
• Estimates indirect expenditures of Wake Tech
  employees and other entities that create a
  multiplier or ripple effect in the local
  economy

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Wake Techs Impact Indirect Multiplier FY03

• The multiplier or ripple effect occurs when
  college and employee expenditures re-circulate
  through the local economy, producing additional
  jobs, salaries, spending and tax revenue.
• For this study, Omega Associates used a
  conservative .73 multiplier, based on standard
  national averages that vary across the country,
  depending on the industrial base and spending
  habits in each individual community.
• Multipliers that have been used in other impact
  studies in the United States have ranged from
  .43 to 1.32.
• Total Indirect Multiplier Impact 47.86 million

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The First Innovative Measure of Economic Impact

• Education-Enhanced Earnings
• Estimates the value of a Wake Tech education on
  the potential annual income of students who
  attended in FY03

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Higher Education Pays!

• According to the U.S. Department of Labor
• High school graduates earn an average of 7,500
  per year MORE than non-graduates.
• Adults with some college earn an average of
  5,800 per year MORE than adults who have only
  completed high school.
• Associate degree graduates earn an average of
  7,200 per year MORE than high school graduates.

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U.S. Average Earnings By Educational Level
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Fast Returns on Student Investments

• Workers with some college earn about 5,800
  more each year than workers who never attended
  college.
• Academic costs (tuition, fees, books and
  supplies) for one year at Wake Tech are estimated
  at 1,766 per student. Financial aid offsets
  these costs in many cases.
• One-Year Return on Student Investments
  3.28 per 1.00 Invested

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Wake Techs ImpactEducation-Enhanced Earnings
for Curriculum Programs FY03

• Wake Tech enrolled 15,238 students (unduplicated
  headcount) in curriculum programs. Based on
  national estimations, these students will earn
  88.38 million MORE than they would have earned
  if they didnt attend college.
• The 820 students who earned associate degrees
  will add an additional 1,402 per college
  graduate, or 1.15 million, MORE to that total
  each year.
• Education-Enhanced Earnings Impact for
  Curriculum Programs 89.53 million

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Wake Techs Impact Education-Enhanced Earnings
for Continuing Education Programs FY03

• Wake Tech enrolled 36,205 students (unduplicated
  headcount) in continuing education programs.
• These programs include GED and adult basic
  skills, English as a Second Language,
  occupational training and public service classes
  for firefighters, law enforcement officers and
  emergency medical technicians.
• The average earnings increase for a continuing
  education student is 300 annually.
• Education-Enhanced Earnings Impact for
  Continuing Education Programs 10.86 million

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Education-Enhanced Earnings Summary FY03

• For FY 2003 curriculum students and graduates,
  89.53 million in additional earnings
• For FY 2003 continuing education students,
  10.86 million in additional earnings
• Education-Enhanced Earnings Total Impact
  100.39 Million

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The Second Innovative Measure of Economic Impact

• Dynamic Investment Attraction
• Estimates the portion of annual economic
  development investments in Wake County that would
  not have occurred if Wake Tech were not present

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Investments in Wake County New and Existing
Businesses
Source Greater Raleigh Chamber of Commerce
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Wake Techs Impact Dynamic Attraction FY03

• Wake Techs presence offering training,
  education, and other quality of life benefits
  is a major attraction for new and existing
  business and industry choosing to invest in Wake
  County for new locations or expansions.
• Community leaders estimate that the colleges
  attraction strength ranges from 5 percent to 80
  percent.
• For this study, Omega Associates used a
  conservative average of 18 percent, which is
  multiplied by the average annual industrial
  investment in Wake County.
• Dynamic Investment Attraction Impact 83.06
  million

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Wake Techs Economic Impact A Summary

• Direct Expenditures 65.56 million
• Indirect Multiplier Effect 47.86 million
• Education-Enhanced Earnings 100.39 million
• Dynamic Investment Attraction 83.06 million
• Wake Technical Community Colleges Estimated
  Cumulative Economic Impact on Wake County for
  FY03
• 296.86 million
• variance due to rounding

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Community Leaders SpeakWhat Are Wake Techs
Best Benefits?
Source Omega Associates Focus Groups, 2003
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What Brings Companies to Wake County?
Source Omega Associates Focus Groups, 2003
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Examples of Other Impactors Not Quantified in
This Study

• Indirect public benefits of college education
  include
• improved health
• reduced health-related absenteeism
• reduced crime
• lower incarceration rates
• reduced victim costs
• reduced welfare / unemployment
• While these factors have acknowledged value, no
  attempt is made in this study to quantify their
  value.

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How Will Wake County Use These Study Results?

• Publicize the results, increase awareness and
  build support for Wake Tech
• ATTRACT NEW BUSINESS AND INDUSTRY
• EXPAND EXISTING BUSINESS AND INDUSTRY

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Wake Tech Deserves Your Support

• Every 1 in expenditures at Wake Tech returns an
  average of 4.53 to Wake County.
• State and county government investments totaled
  only 37.46 million. (This excludes tuition
  revenue of 7.88 million.)
• Wake Tech offered a return on investment of an
  estimated 7.92 for every 1 of state and county
  public money.
• In FY03, Wake Technical Community College had an
  estimated economic impact on Wake County of
  296.86 million.

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Selected Sources Utilized in This Study

• Reports from U.S. Census, Labor, and Commerce
  and from the American Association for Community
  Colleges
• Focus meetings with key community leaders
• Focus Group 1 North Raleigh, Morrisville, RTP
  (02/17/2004)
• Focus Group 2 East Raleigh, Knightdale,
  Rolesville, Wake Forest, Wendell, Zebulon
  (02/17/2004)
• Focus Group 3 South and West Raleigh, Apex,
  Cary, Fuquay-Varina, Garner, Holly Springs
  (02/18/2004)
• Data from the Greater Raleigh Chamber of
  Commerce, from the Wake County Economic
  Development Program and from Wake Technical
  Community College

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Where do we go from here?