UT Martin's $118 Million Boost to Region's Economy is Value Added to Education Mission.
It is hard to dispute the value of the product: a four-year college degree. Each year, hundreds of UT Martin graduates prove that by maximizing the benefits of a college education. In fact, approximately 95 percent of UT Martin graduates find jobs or are accepted to graduate schools within six months of graduation.
And, while educating students is the primary mission, there is a value-added aspect that extends UT Martin’s benefits beyond the campus borders or Martin city limits.
UT Martin generated $118 million in income in the region during the 2005-06 fiscal year, according to a study by a UTMartin professor. Of that amount, approximately 75.6 percent, or $89,359,790, was generated in Weakley and Obion counties.
Dr. Parker Cashdollar, professor of economics, recently updated studies he has released at intervals since 1985, that examine economic impact of three categories – university specific-, student- and visitor-spending in the region.
“The economic impact study provides a concise measure of the short-term impact of UT Martin that benefits more than those with direct ties to the university such as students, employees and contractors,” said Cashdollar. “Persons and businesses in the region with no direct ties to UT Martin can see the impact, especially through the multiplier impact, that benefits the overall economy of the region.”
As part of the study, expenditure categories were multiplied by personal income factors (the same as those used in previous studies) to determine the local income impact. Personal income factors show the percentage of the expenditure that becomes local income, and the PIFranged from 1.0 (100 percent) for payroll to only .04 (4 percent) for supplies purchased by the university. Multiplying each category of spending by the appropriate PIF yielded the direct contribution to income of that category of expenditures. Then an income multiplier of 1.9 was used to estimate the total impact in the region of the given expenditure category. The multiplier takes into account the fact that a dollar spent locally generates additional income by turning over in additional transactions.
“There were no major surprises,” said Cashdollar of the outcomes. “UT Martin payroll continues to be the major contributor to income impact for several reasons. Virtually all of the payroll goes to UT Martin employees living in the region. Payroll is the largest single component of spending. And, unlike the other components of spending that have personal income factors that are less than 1.0, each one dollar of payroll spending immediately creates a full one dollar of income in the region.”
The $118 million local income total included expenditures in all three categories. All total amounts include the multiplier effect. The $48,413,664 payroll, in the UT Martin specific-expenditures category, was the greatest contributor to income, generating a total of $91,985,962 in the region.
UTMartin off-campus student expenditures had the greatest impact in rent with an expenditure of $4,657,957 and generating a total income impact of $7,080,095. This was followed by grocery spending of $8,124,167 that generated a total income impact of $1,234,873. Restaurant spending was $7,771,661, generating an income impact of $3,543,877.
UT Martin off-campus visitor expenditures for the time period was $2,824,565, which generated an income impact of $1,073,334. Most visitor off-campus spending was on food, vehicle expenses and lodging.
During a period from 2000 to 2006, state appropriations decreased from 57 percent to 48 percent as a percentage of the overall UTMartin budget. Tuition and fees increased from 39.4 percent of the UT Martin budget in 2001 to 47.6 percent of the UT Martin budget in 2006. Grants and scholarships over this same period rose from $10.3 million to $21.2 million or by $10.9 million, a 106 percent increase, which offset tuition increases for many students. Grants and scholarships as a percentage of tuition and fees increased from 56 percent in 2001 to 73 percent in 2006. Grants and scholarships, boosted by lottery scholarships which began in fall 2004, reached $6.3 million in 2005-06 and comprised 30 percent of total grants and scholarships.
“We recognize the level of involvement UT Martin has in our region, and we are proud to participate as a meaningful partner with a significant impact upon our stakeholders,” said Dr. Thomas Rakes, UT Martin chancellor. “We also realize the importance of growth and economic development as a necessary linkage that serves to improve the quality of life for us all,” he added.
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