52 Chapter 3: Investment analysis the present value of the savings related to income assistance amount to $6.5 million, stemming from a reduced number of persons in need of welfare or unemployment benefits. All told, social savings amounted to $18.7 million in benefits to communities and citizens in New York. The sum of the social savings and the increased state economic base is $929.3 million, as shown in the bottom row of Table 3.5 and in Figure 3.3. These savings accrue in the future as long as the FY 2021-22 student population of SUNY WCC remains in the workforce. Return on investment for society Table 3.6 presents the stream of benefits accruing to New York society and the total social costs of generating those benefits. Comparing the present value of the benefits and the social costs, we have a benefit-cost ratio of 6.6. This means that for every dollar invested in an education from SUNY WCC, whether it is the money spent on operations of the college or money spent by students on tuition and fees, an average of $6.60 in benefits will accrue to society in New York.37 With and without social savings Earlier in this chapter, social benefits attributable to education (improved health, reduced crime, and reduced demand for income assistance) were defined as externalities that are incidental to the operations of SUNY WCC. Some would question the legitimacy of including these benefits in the calculation of rates of return to education, arguing that only the tangible benefits (higher earnings) should be counted. Table 3.4 and Table 3.6 are inclusive of social benefits reported as attributable to SUNY WCC. Recognizing the other point of view, Table 3.7 shows rates of return for both the taxpayer and social perspectives exclusive of social benefits. As indicated, returns are still above threshold levels (a net present value greater than zero and a benefit-cost ratio greater than 1.0), confirming that taxpayers and society as a whole receive value from investing in SUNY WCC. 37 The rate of return is not reported for the social perspective because the beneficiaries of the investment are not necessarily the same as the original investors. Figure 3.3: Present value of benefits to society Source: Lightcast impact model. 9+2020+44+6767+U Social savings $18.7 million Added student income $535.9 million $929.5 million Total benefits to society Added business income $251.7 million Added income from college activities $123.2 million Table 3.7: Taxpayer and social perspectives with and without social savings Including social savings Excluding social savings Taxpayer perspective Net present value (millions) $25.4 $12.8 Benefit-cost ratio 1.4 1.2 Internal rate of return 2.1% 1.2% Payback period (no. of years) 25.3 30.6 Social perspective Net present value (millions) $789.1 $770.3 Benefit-cost ratio 6.6 6.5 Source: Lightcast impact model.
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