Given their declining enrollment and declining budget, as well as the fact Shawnee State University is one of the smallest four-year public schools in Ohio, just how important is it to the economy of southern Ohio and Portsmouth and Scioto County in particular?
According to a just released economic impact study commissioned by SSU and completed in August, for the fiscal year 2016-17, the school had a total financial impact of $164.4 million and directly or indirectly was responsible for 2,610 jobs.
The study argues that first number represents approximately 1.9 percent of the region’s total gross regional product (GRP). The number of jobs supported by SSU represents one out of every 42 positions available in the SSU service area.
In breaking down the overall number, the study states SSU employed 579 full-time and part-time employees for its day-to-day operations in FY 2016-17. Payroll for these employees amounted to $33.6 million, much of which was spent in the SSU Service Area to purchase groceries, clothing and other household goods and services. The university spent another $26.6 million to support its day-to-day operations. The net impact of university payroll and expenses in the service area during the analysis year was approximately $41.4 million in income.
Around 35 percent of students attending SSU originated from outside the region. Some of these students relocated to the area. In addition, a number of students would have left the region if not for SSU. These relocated and retained students spent money on groceries, transportation, rent and so on at regional businesses. The expenditures of relocated and retained students during the analysis year added approximately $5.5 million in income to the service area economy.
The study states SSU visitors accounted for an additional approximately $176,000 in income in the service area. The impact of former students currently employed in the regional workforce amounted to $99.3 million in added income during the analysis year.
The SSU study claims the university generates more in tax revenue than it takes. These benefits to taxpayers consist primarily of taxes state and local governments will collect from the added revenue created by SSU. As SSU students earn more, they will make higher tax payments. Employers also will make higher tax payments as they increase their output and purchase more supplies and services. By the end of the FY 2016-17 students’ working careers, the state and local government will have collected a present value of $95.3 million in added taxes.
In the end, dividing benefits to taxpayers by the associated costs yields a 4.9 benefit-cost ratio, i.e., every $1 in costs returns $4.90 in benefits. The average annual return on investment for taxpayers is 9.3%.
The SSU study also claims the university provides lots of social benefits as well as economic benefits, though the study also says the largest social benefit is economic. Other societal benefits consist of savings generated by the improved lifestyles of students. For example, health savings include avoiding medical costs associated with smoking, alcoholism, obesity, drug abuse and mental disorders. Crime savings include reduced security expenditures, lower victim costs and reduced criminal justice system expenditures. The study also claims savings in unemployment related expenditures.
The conclusion of the study states “SSU creates value from multiple perspectives. The university benefits local businesses by increasing consumer spending in the region and supplying a steady flow of qualified, trained workers into the workforce. It enriches the lives of students by raising their lifetime earnings and helping them achieve their individual potential. It benefits state and local taxpayers through increased tax receipts across the state and a reduced demand for government-supported social services. Finally, it benefits society as a whole in Ohio by creating a more prosperous economy and generating the a variety of savings through the improved lifestyles of students.”
The SSU study was completed by an economic impact study firm Emsi, an international company headquartered in Idaho. Copies of the complete 90-page report are available from SSU.