APRIL 2013

Study reveals SJR State economic impact: $163 million

A message of academic success and economic progress recently resonated from Florida's Capitol building as the results of a new economic study were announced. SJR State President Joe Pickens, J.D., together with State Board of Education member John Padget and Division of Florida Colleges Chancellor Randy Hanna, reported the multi-billion dollar impact that Florida's 28 colleges have on the state. The report also revealed the $163.5 million boost to Clay, Putnam and St. Johns counties, thanks to St. Johns River State College, its graduates and annual business operations.

Each year, Florida's public colleges, known as the Florida College System (FCS), produce graduates who are better prepared to become high-income earners. According to a new economic study released by the Council of Presidents for the FCS, the colleges and their graduates add $26.6 billion per year to the state's economy.

Pickens, who also serves as the Chair of the Florida Council of Presidents, said during the press conference that the FCS plays a vital role in shaping Florida's future. "Florida's colleges are providing exactly the kind of boost our state needs," Pickens said. "We are grateful to our state leaders for their wise investments that touch the lives of so many Floridians."

Economic Growth Analysis

SJR State affects the local economy in three ways: through its local purchases, including wages paid to faculty and staff; through the spending of students who come from outside the region; and through the increase in the skill base of the local workforce.

Student Productivity Effect

Benefits of higher education are most obvious from a student's perspective. The study revealed that for every dollar students invest in SJR State, they receive a cumulative $6.10 in higher future income over the course of their working careers. Compared to someone with a high school diploma, associate's degree graduates earn $9,200 more per year, on average, over the course of a working lifetime.

Every year students leave SJR State and join or rejoin the regional workforce. Their added skills translate to higher income and a more robust SJR State service area economy. Based on SJR State's historical enrollment and credit production over the past 29-year period, it is estimated that the accumulated contribution of SJR State instruction received by former students (both completers and non-completers) annually adds some $137.1 million in income to the SJR State service area.

College Operations Effect

SJR State creates income through the earnings of its faculty and staff, as well as through its own operating and capital expenditures. Adjusting for taxes and other monies withdrawn from the local economy in support of SJR State, it is estimated that the SJR State service area economy receives a net of $24.8 million in added labor and non-labor income due to SJR State operations each year.

According to the study, taxpayers experience a return of $3.30 for every dollar of their investment in SJR State. From the perspective of society as a whole, the study also estimates that Florida taxpayers experience additional benefits through avoided social costs amounting to $1.9 million per year due to improved health, reduced crime and reduced welfare and unemployment.

Student Spending Effect

Students from outside the region (nearly 12%) spend money for room and board, transportation, entertainment, and other miscellaneous personal expenses. These expenditures create jobs and incomes for local businesses. The spending of SJR State's non-local students generates approximately $1.6 million in added income in the SJR State service area economy each year.

Total Effect

The results of this study demonstrate that SJR State is a sound investment from multiple perspectives. The college enriches the lives of students and increases their lifetime incomes. It benefits taxpayers by generating increased tax revenues from an enlarged economy and reducing the demand for taxpayer-supported social services. Finally, it contributes to the vitality of both the local and state economies.

The Council of Presidents and the FCS Foundation commissioned Economic Modeling Specialists International (EMSI) to conduct the economic impact study of the Florida system. EMSI has been conducting economic impact studies for colleges and universities and economic development groups from across the United States since 2000. In addition to examining impacts created by the accumulated skills and higher productivity of students in the workforce, EMSI also looked at the impact of Florida's college and student spending.

"At its core, the Florida College System is about providing access to high-quality education and job training that responds to community and state needs," said Florida College System Chancellor Randy Hanna. "The results from the economic impact study confirm something we already knew: the Florida College System is an important economic development engine for the state."

Reacting to the study, Governor Rick Scott said, "This study comes on the heels of today's announcement that we've added more than 280,000 private-sector jobs over the last two years, and as we continue to focus on greater economic growth, students will have even more opportunities to find a job in the Sunshine State. Moreover, this report is great news in support of our goal to create more jobs and strengthen education. Florida colleges continue to step up and provide students with an even more affordable, high-quality education."

An Education in Florida’s College System Pays Big Dividends

By Joe Pickens, J.D.
President, St. Johns River State College
Chair, FCS Council of Presidents

Parents have long told their children about the value of a college education, and Florida's colleges certainly agree. Now, for the first time, we have detailed research to prove what we have always believed: An education from one of Florida's public colleges is a value that can't be beat, for students and taxpayers alike.

Florida's 28 state and community colleges, collectively the Florida College System (FCS), open their doors to high school graduates who want more - more job skills, more knowledge, a more affordable way to obtain higher education. There are many ways to measure success, and we are proud of a new study that shows just how well FCS schools succeed in one of the key measurements, dollars and cents.

FCS commissioned Economic Modeling Specialists International (EMSI) to conduct a detailed analysis. These experts determined that our member schools pump an additional $26.6 billion per year into the state's economy by producing well-educated graduates who are better prepared to become high-income earners.

Local colleges play such a vital role in the life of a community. Especially in locations that are too far a drive from a traditional four-year university, our colleges provide outstanding educational opportunities for the next generation of leaders. They also provide jobs within the community and a highly skilled workforce to handle the essential jobs of the future.

We clearly are doing something right. Last year our member colleges awarded 106,000 degrees and certifications, and 93 percent of our students choose to remain in Florida and contribute to economic growth. Thanks to the education they receive at FCS schools, our bachelor's degree graduates earn average starting salaries 13.3 percent higher than the average Florida salary and associate in science graduates start 8.2 percent above the average salary. Our job placement rates are extraordinary, as within a year seven out of every eight of our graduates find a good job or further their education.

A good education system benefits our entire state. The EMSI study identifies social benefits from education, including reduced incidences of absenteeism, alcohol abuse and smoking, lower probability of committing crime, and fewer welfare and unemployment claims. The EMSI analysts estimated that the 2011-12 student population at the Florida College System will generate social savings to the Florida public equal to $158.6 million a year.

According to the study, Florida College System students enjoy an attractive 16.8 percent average rate of return on their educational investment. Compare that to state government's rate of return of 9.4 percent on its investments, and it's easy to see the bargain that FCS schools represent.

All these numbers add up to a single conclusion: The Florida College System is living up to its mission of helping to bolster the economic foundation of our state and enrich the lives of our fellow Floridians. Beyond just the numbers, our schools are producing skilled workers for essential fields such as nursing, teaching and business.

All of us in the Florida College System are proud to be associated with one of the finest win-win situations Florida has going for it. Clearly, an investment in the Florida College System is an investment in Florida's future.