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Universities/Colleges are Economic Development!

By March 9, 2018 No Comments

Click here for full text version:  university community letter 2018

First, thank you for your continued support of higher education. As you know universities and colleges function as regional and state wide economic drivers by providing businesses with expert assistance, student training/education and facilitating the commercialization of innovation. In addition, universities and colleges are key economic engines for their respective host communities.

The undersigned are economic development professionals from across the state representing communities that host a university or college. We are writing to provide you with data regarding the economic and social importance of higher education and to encourage you to continue to oppose the governor’s recommendations regarding education spending.  Below is some key data for your use as you continue to work through a tough budget and consider the governor’s recommendations.

Higher education is definitively connected to economic growth and vitality with multiple studies indicating that higher education is positively linked to lower unemployment rates, higher labor productivity, higher wage rates, higher tax revenue and lower public assistance.

  • $1 cut to Higher Education reduces the state GDP by $38.43
  • $1 cut to Higher Education reduces state tax revenue by $1.46
  • The reduction of 10 Higher Education jobs in a community results in the total loss of 16 jobs (direct and indirect job loss)
  • The reduction of 10 Higher Education jobs in a community results in the total loss of $878,962 in local payroll (direct and indirect payroll loss)
  • Missouri ranks 44th in Higher Education spending
  • Missouri has an Innovation Index of 90 (rural areas have an innovation index in the low 80s)
  • Missouri’s Higher Education spending is 68% of the national average
  • Higher Education degrees are worth an additional $481,000 in lifetime income to the degree holder
  • State share of Higher Education costs have gone from 70% in 1990 to 30% in 2017

Spending on higher education provides a significant return on investment for the entire state. The state’s contribution/share of higher education costs has decreased continually from 1970 shifting the bulk of higher education costs onto students.  With the wellbeing of students as the primary goal, Missouri’s higher education institutions remain committed to providing students with an affordable and quality education.

In an effort to move Missouri’s economy forward there must be an increased emphasis on workforce development. The workforce for today and tomorrow has its training grounds in our universities and colleges. The Missouri Economic Research and Information Center within the Department of Economic Development stated in its Information Technology Pathway report that many of the occupations identified REQUIRE a bachelor’s degree or advanced degree. These positions include: database administrator, software developer, computer systems analyst, computer programmer, and more.  The NEXT occupations REQUIRE long-term on the job training, a certificate, or an associate degree.  These positions include: computer user support specialist, web developer, and computer network support specialist.  It is only through your continued support of higher education that these people will continue to be trained.

It will be difficult for rural and suburban areas of the state to be able to attract young professionals to live and work remotely in the gig economy if the universities and colleges in Missouri that are outside of St. Louis, Kansas City, Columbia, and Springfield areas are decimated by budget cuts.  For this reason we are grateful for the legislature’s support of higher education and encourage you to continue your opposition to the governor’s budget recommendations.

The universities and colleges most impacted by funding cuts are in small to mid-size towns and cities across Missouri.

State Technical College of Missouri–Linn
population      1,400

North Central Missouri College–Trenton
population      6,000

Mineral Area Community College–Park Hills
population      8,700

Northwest Missouri State University—Maryville
population      12,000

Moberly Area Community College—Moberly
population      14,000

Three Rivers Community College—Poplar Bluff
population      17,300

Truman State University—Kirksville
population      17,500

Missouri Science and Technology—Rolla
population      20,000

University of Central Missouri—Warrensburg
population      20,300

State Fair Community College—Sedalia
population      21,500

Southeast Missouri State—Cape Girardeau
population      40,000

Lincoln University-Jefferson City
population      43,000

Missouri Southern—Joplin
population      53,000

Missouri Western—St. Joseph
population      77,000

Crowder College-Neosho
population      12,181

Many times, the university or college is one of the largest employers in the community. The universities and colleges roughly employ 700 people per community with a direct and indirect local impact of 1,113 jobs and $61,600,000 in annual payroll.  Higher Education accounts for 16,695 jobs and $924,000,000 in annual payroll to the communities listed above.

Recommended Action:

In the best interests of the state’s economic vitality and strength the undersigned strongly encourage the House and Senate to maintain their support of higher education and opposition to the governor’s budget recommendations.