A new report from West Virginia University says West Virginia's public colleges added $2.7 billion to their local economies in 2014 and supported about 24,000 jobs.
Higher education officials said the report, released Thursday by researchers at WVU's Bureau of Business and Economic Research, is the first report that compares colleges on an equal footing using the same formulas to draw conclusions about an institution's economic footprint.
"This is meant to be a perspective for those local community members who have said for years that they know the schools are an important part of our community from a cultural standpoint and from a community involvement standpoint," said state Higher Education Chancellor Paul Hill. "This is just a way to look at the financial impact."
Eric Bowen, a research assistant professor with the WVU bureau who compiled the report, looked only at data from 2014 to compare the 12 major four-year, public institutions and nine major two-year, public community colleges.
To measure the economic footprint of each institution, the report takes into account how much money the state appropriates to each school, how much it spends in the local community (on things like utilities and buying supplies) and estimates secondary impacts spending goes on to have.
WVU and Marshall University had the largest economic impacts of all four-year colleges included in the report with an impact of $1.7 billion and $398 million respectively.
A news release from the state Higher Education Policy Commission claims for every dollar the state appropriates to WVU, it had an impact of about $7.50 in the surrounding community.
Bowen said that number could be confusing. He said it doesn't mean that for every dollar the state is investing, its money is being multiplied.
So, for example, if the state doubled its appropriation to WVU from $186 million in 2014 to $372 million, the school's overall economic impact would increase but wouldn't necessarily be doubled.
In several graphs included in the report, the economic impact of smaller schools like Shepherd University and Bluefield State College are dwarfed in comparison to WVU's impact. Comparing those, Bowen said, is like comparing apples to oranges.
"Obviously, the bigger the expenditures that you have, the larger those traditional impacts would be," Bowen said. "But there are some differences in what percentage of the budget is funded by state appropriations, and, depending upon which college you are looking at and how big the impact area is, you may have different multipliers in terms of how much of those expenditures get re-spent in the local economy."
Large schools like Marshall and WVU are able to attract more out-of-state students more easily than small schools that might not have as much on-campus housing, according to Bowen.
Out-of-state students brought nearly $215 million into the state, supporting more than 1,700 jobs that resulted in more than $55 million in total compensation for workers.
Pierpont Community and Technical College and West Virginia University at Parkersburg had the largest economic impact of the two-year colleges included in the report with a $33.9 million and $33.3 million impact respectively.
Hill said the HEPC wanted to commission the report because several institutions already release their own reports from time to time estimating their economic impact. The institutions might use different formulas or might account for different expenditures, but by having one comprehensive report, the schools can be more easily compared.
The report points out that there are some limitations to its conclusions. For one, the largest way a college impacts a community is by paying its employees.
The report assumes that these employees live and work in the area where the schools are located and use their earnings to bolster the local economy. Since some employees might commute into work and spend their earnings out of the state, the economic impact represents the maximum impact a college might have.
In the past, other researchers have criticized similar reports that have tried to determine the economic impact colleges have because of how integrated many schools are with their community.
A 2007 article published in the Economics of Education Review says that, too often, these reports include impacts that might exist in the community with or without the college.
To counteract that, Bowen's report estimates the economic impact of a college by showing what the community would lose if the college were to suddenly disappear.
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