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UTPA's economic impact close to $500 million annually
Posted: 01/18/2011
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A study released by The University of Texas-Pan American shows the University's annual economic impact on the local economy at almost half a billion dollars ($492.8 million) -a result generated by University-related spending on operations and new construction, as well as expenditures by faculty, staff and students.

"This report confirms that UT Pan Am is a primary economic engine for this Valley," UTPA President Robert S. Nelsen said.

The study, which examined the impact in FY2009-10 of the University on the economy of Hidalgo County, also defined as the McAllen-Edinburg-Mission Metropolitan Statistical Area (MSA), indicates that nearly 45 percent ($217.1 million) of the total impact arose as a result of student spending. It also found that the total employment impact of UT Pan Am, one of the top 10 employers in Hidalgo County, was 5,873 full-time equivalent jobs.

"Almost three additional jobs in the local economy are generated for every 10 jobs associated with UT Pan Am spending," Nelsen said.

The UTPA Office of Institutional Research and Effectiveness (OIRE), which conducted the study, employed IMPLAN (Impact Analysis for Planning), a widely used, nationally renowned economic modeling system to obtain the monetary and employment impacts. IMPLAN, simply explained by Dr. S.J. Sethi, OIRE assistant director who compiled the report, is an accounting system of economic transactions that take place among industries, businesses (such as a university) and consumers in an economy.

"When UTPA spends money in the form of purchases, salaries, construction and other forms, it has an economic impact as some of this money is re-spent one or more times in the local economy leading to what is called the multiplier effect," Sethi said.

Faculty and staff spending was allocated to categories, such as food, apparel, healthcare, etc., as defined by the Bureau of Labor Statistics. Student spending did not include tuition and fees or on-campus living costs and was examined in four categories: undergraduate and graduate, on and off campus. Student spending did include books, transportation, and miscellaneous items, including personal expenses, eating out, clothing and entertainment.

The study showed a direct spending impact from University operations, new construction, faculty/staff spending and student spending of $396.2 million but with the multiplier effect, the economic impact totals $492.8 million. The employment impact of UTPA's aggregate spending generated 4,622 direct full-time equivalent (FTE) jobs and led to an additional 1,251 being created for a total of 5,873 FTE jobs in the local economy.

"Spending by the University and its students, faculty and staff result in multiplier effects that reverberate throughout our entire local economy," Sethi said.

UT Pan American's fall 2010 enrollment was 18,744, the highest enrollment in its 84-year history. The report found that nearly 45 percent ($217.1 million) of the total economic impact of the University on the McAllen-Edinburg-Mission Metropolitan Statistical Area arose as a result of student spending.
The social impacts of the University, while not measurable in monetary terms, are also immense and mentioned in the report. They include providing a continuous supply of skilled graduates into the regional workforce which in turn results in an improved standard of living, an increase in tax receipts and improved public services in the MSA; supplying faculty and staff expertise to assist local businesses, organizations and communities in their operations or to serve on boards or as advisors; conducting research to assist government in making informed decisions regarding their services and operations and to develop knowledge and solutions to address local to international problems; providing professional development and training opportunities to maintain and increase a competitive workforce; and promoting, through many community outreach activities and events, the opportunities for and benefits of higher education.

"Our impact goes well beyond economic," Nelsen said. "Growth - aggressive growth - is vital to not only our region's well being but to the state in "Closing the Gaps" and remaining a global competitor."

Edinburg's Economic Development Corp. Executive Director Pedro Salazar said the educational role that UTPA plays in South Texas is vital to our economic prosperity as a region and of strategic importance for the future of the state of Texas.

"What this report shows is that UTPA also plays a very direct role in the health of our local economies which is something that we all need to protect," Salazar said.

Keith Patridge, president/CEO of the McAllen Economic Development Corp., said the report confirms what the community has known intuitively.

"Education represents success, success for the student, graduate and community," he said.

As enrollment grows, UTPA's impact on the economy will expand. UT Pan American's fall 2010 enrollment was 18,744, the highest enrollment in its 84-year history, and 93 percent of its students were from the Rio Grande Valley. With a growth of 8 percent in student enrollment over the last five years, a similar growth rate is expected in the future, the report stated. As students graduate, their personal income also increases; the Bureau of Labor Statistics Current Population Survey indicates that as a graduate with a bachelor's degree, earnings per week are $1,025 compared to $626 per week for those with only a high school diploma.

"Our enrollment target for 2015 is 20,000 students so the economic impact this University has will continue to rise with the growth in students, faculty and staff. However, at the same time we will need to seek new partnerships to help provide the facilities, faculty and other services our growing number of students deserve, particularly in light of how Texas' budget woes have impacted the needs of higher education," Nelsen said. "Like all engines, this institution needs fuel to move ahead and continue to positively impact this Valley and beyond."

Patridge said it is important that Texas legislators know the financial contribution our higher education institutions make to our community and to the state of Texas.

"This report is evidence that education is not an expense, it is an investment with a pretty good ROI (return on investment)," he said.

The complete report is available at http://oire.utpa.edu/publications/UTPAEconomicImpact2010.pdf".