JUNE 2O23 Executive Summary The Economic Value of SUNY Westchester Community College
2 Introduction SUNY WESTCHESTER COMMUNITY COLLEGE (SUNY WCC) creates value in many ways. The college plays a key role in helping students increase their employability and achieve their individual potential. The college retains students in the county, generating new dollars and opportunities for Westchester County. SUNY WCC provides students with the education, training, and skills they need to have fulfilling and prosperous careers. Furthermore, SUNY WCC is a place for students to meet new people, increase their self-confidence, and promote their overall health and well-being. SUNY WCC influences both the lives of its students and the county economy. The college supports a variety of industries in Westchester County, serves county businesses, and benefits society as a whole in New York from an expanded economy and improved quality of life. Additionally, the benefits created by SUNY WCC extend to the state and local government through increased tax revenues and public sector savings. SUNY WCC is also a vital asset to regional employers. The college adds highly-trained and knowledgeable human capital to the local workforce and provides customized counseling and the most up-to-date vocational training programs to regional employers at the Westchester Educational Opportunity Center. Through building strong partnerships with businesses and organizations interested in upskilling and professional development of their existing or prospective workers, SUNYWCC continuously contributes to community well-being and fosters local economic prosperity. An estimated 80% of students remain in Westchester County after finishing their time at SUNY WCC, another 18% settle outside the county but in the state, and the remaining 2% settle outside the state. Lastly, it provides students with the knowledge, skills, and abilities they need to become productive citizens and add to the overall output of the county. This study measures the economic impacts created by SUNY WCC on the business community and the benefits the college generates in return for the investments made by its key stakeholder groups—students, taxpayers, and society. The following two analyses are presented: Economic impact analysis Investment analysis All results reflect employee, student, and financial data, provided by the college, for fiscal year (FY) 2021-22. Impacts on the Westchester County economy are reported under the economic impact analysis and are measured in terms of added income. The returns on investment to students, taxpayers, and society in New York are reported under the investment analysis. SUNYWCC influences both the lives of its students and the county economy. WES TCHES T ER COUNTY, NEW YORK
3 Economic impact analysis SUNY WCC promotes economic growth in Westchester County through its direct expenditures and the resulting expenditures of students and county businesses. The college serves as an employer and buyer of goods and services for its day-to-day operations. The college’s activities retain students in Westchester County, whose expenditures benefit county vendors. In addition, SUNY WCC is a primary source of higher education to Westchester County residents and a supplier of trained workers to county industries, enhancing overall productivity in the county workforce. Operations spending impact SUNY WCC adds economic value to Westchester County as an employer of county residents and a large-scale buyer of goods and services. In FY 202122, the college employed 1,264 full-time and part-time faculty and staff, 62% of whom lived in Westchester County. Total payroll at SUNY WCC was $94.4 million, much of which was spent in the county for groceries, mortgage and rent payments, dining out, and other household expenses. In addition, the college spent $24.1 million on day-today expenses related to facilities, supplies, and professional services. SUNY WCC’s day-to-day operations spending added $109.6 million in income to the county during the analysis year. This figure represents the college’s payroll, the multiplier effects generated by the in-county spending of the college and its employees, and a downward adjustment to account for funding that the college received from county sources. The $109.6 million in added income is equivalent to supporting 1,363 jobs in the county. Student spending impact Some in-county students, referred to as retained students, would have left Westchester County if not for the existence of SUNY WCC. While attending the college, these retained students spent money on groceries, accommodation, transportation, and other household expenses. This spending generated $10 million in added income for the county economy in FY 2021-22, which supported 108 jobs in Westchester County. Alumni impact The education and training SUNYWCC provides for county residents has the greatest impact. Since the establishment of the college, students have studied at SUNYWCC and entered the county workforce with greater knowledge and new Economic impact analysis Impacts created by SUNY WCC in FY 2021-22 Operations spending impact $109.6 million Student spending impact $10.0 million Alumni impact $466.1 million OR Total economic impact $585.6 million Jobs supported 5,837
4 Economic impact analysis skills. Today, thousands of former SUNY WCC students are employed in Westchester County. As a result of their education from SUNY WCC, the students receive higher earnings and increase the productivity of the businesses that employ them. In FY 2021-22, SUNYWCC alumni generated $466.1 million in added income for the county economy, which is equivalent to supporting 4,367 jobs. Total impact SUNY WCC added $585.6 million in income to the Westchester County economy during the analysis year, equal to the sum of the operations spending impact, student spending impact, and alumni impact. For context, the $585.6 million impact was equal to approximately 0.6%of the total gross regional product (GRP) of Westchester County. This contribution that the college provided on its own is as large as nearly a third of the entire Transportation & Warehousing industry in the county. SUNYWCC’s total impact can also be expressed in terms of jobs supported. The $585.6 million impact supported 5,837 county jobs, using the jobs-to-sales ratios specific to each industry in the county. In addition, the $585.6 million, or 5,837 supported jobs, stemmed from different industry sectors. For instance, among non-education industry sectors, the spending of SUNY WCC and its students and the activities of its alumni in the Professional & Technical Services industry sector supported 885 jobs in FY 2021-22. If the college did not exist, these impacts would not have been generated in Westchester County. The $585.6 million net impact supported 5,837 jobs in Westchester County. SUNY WCC impacts by industry (jobs supported) 885 643 505 364 364 88 + 64 + 50 + 36 + 36 Art, Entertainment & Recreation Professional & Technical Services Government, Non-Education Health Care & Social Assistance Other services (except Public Admin)
5 Investment analysis An investment analysis evaluates the costs associated with a proposed venture against its expected benefits. If the benefits outweigh the costs, then the investment is financially worthwhile. The analysis presented here evaluates SUNYWCC as an investment from the perspectives of students, taxpayers, and society in New York. Student perspective In FY 2021-22, SUNYWCC served 15,417 credit and 6,943 non-credit students. In order to attend the college, the students paid for tuition, fees, books, and supplies. They also took out loans and will incur interest on those loans. Additionally, students gave up money they would have otherwise earned had they been working instead of attending college. The total investment made by SUNY WCC’s students in FY 2021-22 amounted to a present value of $48.1 million, equal to $32.5 million in out-of-pocket expenses (including future principal and interest on student loans) and $15.6 million in forgone time and money. In return for their investment, SUNY WCC’s students will receive a stream of higher future earnings that will continue to grow throughout their working lives. For example, the average SUNY WCC associate degree graduate from FY 2021-22 will see annual earnings that are $9,600 higher than a person with a high school diploma or equivalent working in New York. Over a working lifetime, the benefits of the associate degree over a high school diploma will amount to an undiscounted value of $384 thousand in higher earnings per graduate. The present value of the cumulative higher future earnings that SUNY WCC’s FY 2021-22 students will receive over their working careers is $195.9 million. The students’ benefit-cost ratio is 4.1. In other words, for every dollar students invest in SUNY WCC in the form of out-of-pocket expenses and forgone time and money, they will receive a cumulative value of $4.10 in higher future earnings. Annually, the students’ investment in SUNY WCC has an average annual internal rate of return of Investment analysis Source: Lightcast employment data. The average associate degree graduate from SUNY WCC will see an increase in earnings of $9,600 each year compared to a person with a high school diploma or equivalent working in New York. 43 + 55 + 61 + 70 + 100 < High school High school Certificate Associate Bachelor's $29,800 $37,900 $41,300 $47,500 $72,200 Students see a high rate of return for their investment in SUNY WCC Source: Forbes’ S&P 500, 1992-2021. FDIC.gov, 2-2022. Interest earned on savings account (National Rate Cap) Average annual return for SUNY WCC students Stock market 30-year average annual return 37 + 21 + 2 0.4% 16.4% 9.6%
6 Investment analysis 16.4%, which is impressive compared to the U.S. stock market’s 30-year average rate of return of 9.6%. Taxpayer perspective SUNY WCC generates more in tax revenue than it receives. These benefits to taxpayers consist primarily of taxes that the state and local government will collect from the added revenue created in the state. As SUNYWCC students will earn more, they will make higher tax payments throughout their working lives. Students’ employers will also make higher tax payments as they increase their output and purchases of goods and services. By the end of the FY 2021-22 students’ working lives, the state and local government will have collected a present value of $84.1 million in added taxes. Benefits to taxpayers will also consist of savings generated by the improved lifestyles of SUNYWCC students and the corresponding reduced government services. Education is statistically correlated with a variety of lifestyle changes. The education that SUNYWCC students receive will generate savings in three main categories: 1) healthcare, 2) justice system, and 3) income assistance. Improved health will lower students’ demand for national health care services. In addition, costs related to the justice system will decrease. SUNY WCC students will be more employable, so their reduced demand for income assistance such as welfare and unemployment benefits will benefit taxpayers. For a list of study references, contact the college for a copy of the main report. Altogether, the present value of the benefits associated with an education from SUNY WCC will generate $12.5 million in savings to state and local taxpayers. Total taxpayer benefits amount to $96.6 million, the present value sum of the added taxes and public sector savings. Taxpayer costs are $71.2 million, equal to the amount of state and local government funding SUNY WCC received in FY 2021-22. These benefits and costs yield a benefit-cost ratio of 1.4. This means that for every dollar of public money invested in SUNY WCC in FY 2021-22, taxpayers will receive a cumulative present value of $1.40 over the course of the students’ working lives. The average annual internal rate of return for taxpayers is 2.1%, which compares favorably to other long-term investments in the public sector. Social perspective Society as a whole in New York benefits from the presence of SUNY WCC in two major ways. Primarily, society benefits from an increased economic base in the state. This is attributed to the added income from students’ increased lifetime earnings (added student income) and increased business output (added business income), which raise economic prosperity in New York. For every dollar of public money invested in SUNY WCC, taxpayers will receive a cumulative value of $1.40 over the course of the students’ working lives.
7 Investment analysis Benefits to society also consist of the savings generated by the improved lifestyles of SUNY WCC students. As discussed in the previous section, education is statistically correlated with a variety of lifestyle changes that generate social savings. Note that these costs are avoided by the consumers but are distinct from the costs avoided by the taxpayers outlined above. Healthcare savings include avoided medical costs associated with smoking, alcohol dependence, obesity, drug abuse, and depression. Justice system savings include avoided costs to the government and society due to less judicial activity. Income assistance savings include reduced welfare and unemployment claims. For a list of study references, contact the college for a copy of the main report. Altogether, the social benefits of SUNY WCC equal a present value of $929.3 million. These benefits include $535.9 million in added student income, $251.5 million in added business income, $123.2 million in added income from college activities, as well as $18.7 million in social savings related to health, the justice system, and income assistance in New York. People in New York invested a present value total of $140.3 million in SUNY WCC in FY 2021-22. The cost includes all the college and student costs. The benefit-cost ratio for society is 6.6, equal to the $929.3 million in benefits divided by the $140.3 million in costs. In other words, for every dollar invested in SUNY WCC, people in New York will receive a cumulative value of $6.60 in benefits. The benefits of this investment will occur for as long as SUNY WCC’s FY 2021-22 students remain employed in the state workforce. Summary of investment analysis results The results of the analysis demonstrate that SUNY WCC is a strong investment for all three major stakeholder groups—students, taxpayers, and society. As shown, students receive a great return for their investments in an education from SUNY WCC. At the same time, taxpayers’ investment in SUNYWCC returns more to government budgets than it costs and creates a wide range of social benefits throughout New York. Social benefits in New York from SUNY WCC Source: Lightcast impact model. 16+2525+22+5757+USocial savings $18.7 million Added student income $535.9 million $929.3 million Total benefits to society Added business income $251.5 million Added income from college activities $123.2 million * 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. Benefit-cost ratio Rate of return 4.1 16.4% Benefit-cost ratio Rate of return 1.4 2.1% Benefit-cost ratio Rate of return 6.6 n/a* Student perspective Taxpayer perspective Social perspective Present value benefits Present value benefits Present value benefits Present value costs Present value costs Present value costs Net present value Net present value Net present value $195.9 million $96.6 million $929.3 million $48.1 million $71.2 million $140.3 million $147.8 million $25.4 million $789.1 million
8 Conclusion The results of this study demonstrate that SUNYWCC creates value frommultiple perspectives. The college benefits county businesses by increasing consumer spending in the county and supplying a steady flow of qualified, trained workers to the workforce. SUNYWCC enriches the lives of students by raising their lifetime earnings and helping them achieve their individual potential. The college benefits state and local taxpayers through increased tax receipts and a reduced demand for government-supported social services. Finally, SUNY WCC benefits society as a whole in New York by creating a more prosperous economy and generating a variety of savings through the improved lifestyles of students. About the study Data and assumptions used in the study are based on several sources, including the FY 2021-22 academic and financial reports from SUNY WCC, industry and employment data from the U.S. Bureau of Labor Statistics and U.S. Census Bureau, outputs of Lightcast’s Multi-Regional Social Accounting Matrix model, and a variety of studies and surveys relating education to social behavior. The study applies a conservative methodology and follows standard practice using only the most recognized indicators of economic impact and investment effectiveness. For a full description of the data and approach used in the study, please contact the college for a copy of the main report. Conclusion Lightcast provides colleges and universities with labor market data that help create better outcomes for students, businesses, and communities. Our data, which cover more than 99% of the U.S. workforce, are compiled from a wide variety of government sources, job postings, and online profiles and résumés. Hundreds of institutions use Lightcast to align programs with regional needs, drive enrollment, connect students with in-demand careers, track their alumni’s employment outcomes, and demonstrate their institution’s economic impact on their region. Visit lightcast.io/solutions/education to learn more or connect with us. The results of this study demonstrate that SUNY WCC creates value from multiple perspectives.
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