Economic & Community Impact Analysis

1.2 - Results by Spending Type

University Spending

The impacts from university operational, auxiliary, and capital expenditure are summarized together as HSU University Impacts. Direct spending related to HSU’s educational mission totaled $199.7 million in 2017-18. This figure includes:

• $168.5 million28 in university operating expenses related to instruction, research, public service, academic support, student services, institutional support, student grants and scholarships, and other related needs.
• $25.7 million in auxiliary enterprise expenses related to campus organizations such as bookstores, campus restaurants, research institutes, etc. Approximately $16 million was attributed to campus dining services and roughly $9.7 million was categorized as housing and parking expenditure. This category captures a portion of on-campus food purchases and other student-related purchases. Therefore, to avoid double-counting the student spending analysis (more detail included in Appendix B), this category does not include the portion of on-campus spending by students.
• $5.5 million in annual construction and capital expenditures. To account for the high degree of variability in capital expenditure year to year, the spending input was developed using a 3-year average from academic years 2015/16 – 2017/18. HSU has already spent $5.5 million in 2018/19 and expects to spend an additional $33 million on capital projects over the course of 2018 and 2019.29 While not modeled in our analysis, this investment demonstrates HSU’s continued commitment to improving university facilities through capital spending projects.

For more information about the methodology used to calculate the direct spending inputs, see Appendix A.

University expenditures supported a total of 3,920 jobs in Humboldt County, as well as over $96 million in labor income and more than $293 million in industry activity. $110 million in industry activity is attributable to indirect and induced effects alone. University spending generates a total of $16.7 million in state and local tax revenue. Table 2 describes the impacts of university expenditures in terms of employment, labor income, and industry activity. University expenditures produce $16.7 million in state and local taxes, or approximately $2,148 generated per current student.

Table 2: University Spending Impact

Source: IMPLAN analysis. Note, numbers may not sum due to rounding. All output values are in 2018 dollars

The indirect and induced effects of spending can be characterized by each multiplier. For example, $1 of direct industry activity produces a total effect that is 1.60 times greater than the initial spending. Thus, for every dollar of direct industry activity, $1.60 is generated in the regional economy. Similarly, each dollar of direct labor income creates a total of $1.47 as a result of indirect and induced effects.

Student Spending

ICF developed an estimate of student spending on books and supplies, food, housing, transportation, and other miscellaneous spending. Total student spending for the 2017-18 academic year was approximately $101.7 million. For more information about the methodology used to calculate the direct student spending, see Appendix A.

This activity supported nearly 670 regional jobs, generated over $19 million in labor income and drove nearly $70 million in industry activity across the region. Total student spending generated more than $5.5 million in state and local tax revenue.

Table 3: Student Spending Impact

Source: IMPLAN analysis. Note, numbers may not sum due to rounding. All output values are in 2018 dollars

The direct industry activity associated with student spending in 2017-18 created a total effect that is 1.38 times greater than the initial spending. Thus, for every dollar of direct industry activity, $1.38 is returned to the region’s economy. Each dollar of direct labor income created a total of $1.45 as a result of indirect and induced effects.

Alumni Impacts

University and student expenditures alone tell us nothing about the long-term economic impact of a quality HSU education and an advanced degree. Students who attend a college or university and obtain a bachelor’s, master’s, or doctorate degree experience higher earning power over the course of their lifetimes than they would have without that degree. These increased earnings impact the regional economy when alumni spend their incremental wages in the local economy. The U.S. Census Bureau estimates that in the United States, bachelor’s degree holders earn, on average, nearly one million dollars more than high-school graduates30 over the course of their working life.

University education has a powerful economic impact not only on individual degree earners, but also on the economy as a whole. Close to 58,000 HSU alumni are still in the workforce. While an impressive 71% of HSU alumni remain within California, an equally impressive 23% of alumni are retained in the immediate Humboldt County region.31 In 2017-18, HSU degree holders living in Humboldt County earned $972.5 million in wages, and HSU degree holders statewide earned more than $3 billion. ICF estimated that $349.4 million in incremental wages per year can be attributed to HSU degrees in Humboldt, and over $909.3 million in incremental earnings can be attributed to degrees across the state of California. The enhanced earning power of alumni in Humboldt supports an additional 1,660 regional jobs, $65.1 million in labor income, and generates close to $207 million in industry activity. Additionally, HSU alumni generate $16.2 million in state and local tax revenue annually.

Based on our analysis, on average, a degree from HSU adds approximately $966,832 in wages over a life-time. 32