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Economic Impact of Community College of Aurora
A third-party analysis conducted for the Colorado Community College System found that the Community College of Aurora (CCA) creates a significant positive impact on the business community and generates a return on investment to its major stakeholder groups—students, taxpayers, and society. Using a two-pronged approach that involves an economic impact analysis and an investment analysis, this study calculates the benefits to each of these groups. Results of the analysis reflect Fiscal Year (FY) 2015-16.
IMPACT ON OUR BUSINESS COMMUNITY
During the analysis year, CCA, its students, and alumni added $242 million in income to the CCA Service Area economy, approximately equal to 0.9% of the service area’s total gross regional product (GRP). By comparison, this impact from the college is nearly as large as the entire Mining industry in the service area, which contains industries related to oil and gas extraction. The economic impacts of CCA break down as follows:
Operations Spending Impact
- CCA employed 549 full-time faculty, adjunct instructors, and staff in FY 2015-16. Payroll amounted to $23.2 million, much of which was spent in the CCA Service Area to purchase groceries, clothing, and other household goods and services. The college spent another $25.2 million to support its day-to-day operations.
- The net impact of college payroll and expenses in the CCA Service Area during the analysis year was approximately $25.9 million in income.
Student Spending Impact
Around 70% of CCA students originated from the CCA Service Area in FY 2015-16. A number of these students would have left the service area if not for CCA. These retained students spent money on groceries, transportation, rent, and so on at service area businesses.
The expenditures of retained students during the analysis year added approximately $3.5 million in income to the CCA Service Area economy.
Alumni Spending Impact
Over the years, students have studied at CCA and entered or re-entered the workforce with newly-acquired skills. Today, thousands of these former students are employed in the CCA Service Area.
The accumulated contribution of former students currently employed in the service area workforce amounted to $212.6 million in added income during the analysis year.
Return on Investment to Students, Taxpayers, and Society
Student perspective
- CCA’s FY 2015-16 students paid a total of $22.7 million to cover the cost of tuition, fees, and supplies. They also forwent $63 million in money that they would have earned had they been working instead of learning.
- In return for the monies invested in the college, students will receive a present value of $339.8 million in increased earnings over their working lives. This translates to a return of $4.00 in higher future earnings for every $1 that students invest in their education. The average annual return for students is 14.1%.
Taxpayer perspective
- In FY 2015-16, state taxpayers in Colorado paid $15.9 million to support the operations of CCA. The net present value of the added tax revenue stemming from the students’ higher lifetime earnings and the increased output of businesses amounts to $142.8 million in benefits to taxpayers. Savings to the public sector add another $8.7 million in benefits due to a reduced demand for government-funded services in Colorado.
- Dividing benefits to taxpayers by the associated costs yields a 9.5 benefit-cost ratio, i.e., every $1 in costs returns $9.50 in benefits. The average annual return on investment for taxpayers is 19.7%.
Social perspective
- The economic base in Colorado will grow by $1.7 billion over the course of the students’ working lives. Society will also benefit from $24.8 million in present value social savings related to reduced crime, lower unemployment, and increased health and well-being across the state.
- For every dollar that society spent on CCA educations during the analysis year, society will receive a cumulative value of $14.80 in benefits, for as long as the FY 2015-16 student population at CCA remains active in the state workforce.
The study was conducted by Emsi, a leading provider of economic impact studies and labor market data to educational institutions, workforce planners, and regional developers in the U.S. and internationally.
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