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Appalachian’s economic impact on region tops $560 million

BOONE—Appalachian State University’s economic impact on the state’s Northwest region topped $560 million in fiscal year 2010-11.

A new report from Appalachian’s Center for Economic Research and Policy Analysis (CERPA) quantifies the total economic and tax revenue impacts of the university on the five-county region comprised of Watauga, Ashe, Avery, Caldwell and Wilkes counties.

The study reports that university-related activities in 2010-11 led to the creation of approximately 6,100 jobs in the region, $140 million in additional wages and salaries, and a total dollar impact on the regional economy of $560 million. This is an approximate 10 percent increase in contributions to the local economy from the 2006-07 when Appalachian’s economic impact was previously estimated.

The authors, Professor Michael McKee and Associate Professor Ash Morgan, report that the increased economic activity attributed to Appalachian resulted in $36 million in additional indirect business taxes to local governments in 2010-11.

The total impacts were driven in part by $152 million in student spending on housing, food, recreation, entertainment and transportation, and by nearly $75 million spent by people attending university events such as athletics, An Appalachian Summer Festival and summer camps.

The study also looked at the impact that the recent cuts in state appropriations had on the regional economy. The 17 percent reduction in appropriations during the past three years not only resulted in the loss of 353 jobs in the region, but there was $32 million in lost economic activity in the region and $9 million less in earnings in the region.

Todd Cherry, professor of economics and director of CERPA, stresses the local economic impacts of Appalachian are just by-products of the university pursuing its mission. “The economic impacts of operating a campus are worth noting, and are particularly important in a rural area, but the mission of a university is to create, disseminate and apply knowledge for the benefit of people and society at large,” Cherry said.

“People do better with a college education, but it goes well beyond a graduate getting a better job. Increased college attainment leads to better health outcomes, less criminal activity, less poverty, and more civic participation and voluntarism,” he said. “And these broader impacts lead to large net savings for governments and important welfare gains for society.”

In 2010, CERPA looked at the impact that research conducted at UNC campuses had on the state’s economy. The study highlights that UNC system graduate and research programs have been instrumental in the economic transformation of North Carolina.

About 60 years ago, the state had the second-lowest income per capita in the country. By 2000, North Carolina had climbed to 31st. The UNC system’s graduate and research programs helped create and attract higher skill and higher paying jobs. North Carolina is a leader in both university and private research and development. “It’s not only about the number of jobs, but also about the quality of jobs,” Cherry said.

McKee, a contributor to the 2010 study, agrees that investment in public universities was critical but also points out the “wisdom of the public-private effort to leverage the state’s world-class university system to create the Research Triangle Park.”

The study finds that UNC system’s graduate and research programs have been a good investment for the state. “Overwhelmingly a good deal,” said McKee. “Just the tax revenue associated with the activity of these graduate and research programs exceeds the costs to the state.”

Though the great recession has disproportionately hit North Carolina, Cherry believes the state is well positioned for the future. “There will be cycles, but states that invest in higher education and public research will do better over time,” Cherry said. “To not invest in these public assets limits the future by limiting workforce development and innovative activity.”

The report is available at http://cerpa.appstate.edu under “Economic and Tax Revenue Impacts Report.”

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