The study also considered the secondary impact of these expenditures , known as the multiplier effect . This phenomenon explains how the original stimulus to the economy from institutional expenditures is re-spent multiple times in the economy by the institutions ’ constituents , such as their faculty , staff and students .
“ Every school is going to have operational expenditures to teach students and manage the operations of the university ,” says Bowen . “ That was the primary impact of the schools . Then , the incomes of the people who work for the university are going to be spent in the local economy . So you have this multiplier effect of all those dollars that get spent in the local economy — the businesses , restaurants , landlords , banks and everything that ’ s used by the university or by the people who work for the university . Their dollars get spent again in the local economy , so you get this spillover effect from the impact on the local economy from the university ’ s spending .”
Recognizing Value
As the largest university in the state in terms of its enrollment and employment , WVU ’ s Morgantown campus made the greatest economic impact . WVU spent approximately $ 815 million in direct expenditures , of which $ 186 million came from state appropriations . Combined with student expenditures , WVU ’ s operating budget generated an additional $ 578 million in secondary impact , totaling nearly $ 1.3 billion .
Pierpont Community & Technical College had the largest economic impact of the two-year institutions at nearly $ 34 million . Direct expenditures totaled about $ 21 million , while $ 8 million came from state appropriations .
“ The smaller schools , particularly two-year schools , are more heavily reliant on state funding than a large university like WVU ,” says Bowen . “ The most recent audited financials put the state ’ s share of WVU ’ s budget at about 15 percent . Most of the other schools are much higher — between 25 and 50 percent in some cases . Reducing state support at these schools is likely to have a bigger impact on their bottom lines .”
Concord University , a four-year institution located in Athens , WV , is one such smaller school that has been directly impacted by the budget cuts . The impact of a decrease in funding can be felt all across the campus , from administrators looking at new hires and new programs to the students who see changes in their tuition rates .
“ It is difficult to offer new things or update curriculum or hire new people who are super qualified when the budget keeps getting cut ,” says Kendra Boggess , president of Concord University . “ Our biggest challenge is finding ways to cut things . You cannot cut your way to success . It ’ s never been done . It ’ s never going to be done in any industry . You have to invest to grow to be able to build more of whatever the enterprise is you are doing .”
Creating Opportunity
Despite these cuts , another lasting impact from higher education ’ s presence in West Virginia is job creation . At 2.86 percent , higher education is one of the only industries in the state that has had growing employment opportunities since 2012 , behind federal health care and social assistance at 11 percent , transportation and warehousing at 5.17 percent , private educational
services at 5.05 percent and administrative , support , waste management and remediation services at 3 percent . In contrast , industries like mining , quarrying and oil and gas extraction ; arts , entertainment and recreation ; and construction have decreased anywhere from 14.33 percent to 39.89 percent during the same timeframe .
Another recent BBER study has also illuminated the value of an educated workforce . Analyzing West Virginia college graduates ’ contributions to the state ’ s economy , the study found that the 6,300 graduates from the class of 2010 employed in-state at the time of the study will generate nearly $ 6 billion in revenue over 20 years . However , it cost just $ 1.4 billion to educate them .
Education is the foundation for the state ’ s economy because it not only builds a strong workforce but also creates opportunity in which that workforce can succeed . Despite the farreaching impact of West Virginia ’ s higher education institutions , the financial significance is overlooked as state leadership focuses on an urgent budget shortfall that can ’ t easily be fixed . As West Virginia tries to diversify its industry portfolio in order to jumpstart the economy , it ’ s important that acts to balance the budget , such as making cuts to education , do not hinder the areas seeing success in the state . At the end of the day , West Virginia ’ s success comes down to the education of its people .
“ We have to have an educated population ,” says Boggess . “ We need educated people in this state to lift the state and be able to draw more businesses here . No business or industry wants to come to a place where there is not an educated population . Education is the key to getting rid of the despair we see . To bring industry here , you have to be able to show them there is an educated workforce that can learn .” •
Congratulations !
We are proud of you ,
Jan Pattishall ,
on being inducted into the Young Guns Class of 2018 .
Phillips , Gardill , Kaiser & Altmeyer , pllc
61 Fourteenth Street Wheeling , WV 26003 ( 304 ) 232-6810 info @ pgka . com www . pgka . com
WWW . WVEXECUTIVE . COM FALL 2017
57