The Economic Value of WTAMU Main Report

More documents

Recommendations

Info

TABLE 3.4: PROJECTED BENEFITS AND COSTS, TAXPAYER PERSPECTIVE 1 2 3 4 Year Benefits to taxpayers (millions) State and local gov’t costs (millions) Net cash flow (millions) 0 $9.5 $55.0 -$45.6 1 $0.7 $0.0 $0.7 2 $1.1 $0.0 $1.1 3 $1.9 $0.0 $1.9 4 $3.1 $0.0 $3.1 5 $4.6 $0.0 $4.6 6 $4.7 $0.0 $4.7 7 $4.8 $0.0 $4.8 8 $5.0 $0.0 $5.0 9 $5.1 $0.0 $5.1 10 $5.3 $0.0 $5.3 11 $5.4 $0.0 $5.4 12 $5.5 $0.0 $5.5 13 $5.7 $0.0 $5.7 14 $5.8 $0.0 $5.8 15 $5.9 $0.0 $5.9 16 $6.0 $0.0 $6.0 17 $6.1 $0.0 $6.1 18 $6.2 $0.0 $6.2 19 $6.3 $0.0 $6.3 20 $6.4 $0.0 $6.4 21 $6.4 $0.0 $6.4 22 $6.5 $0.0 $6.5 23 $6.5 $0.0 $6.5 24 $6.5 $0.0 $6.5 25 $6.6 $0.0 $6.6 26 $6.6 $0.0 $6.6 27 $6.6 $0.0 $6.6 28 $6.5 $0.0 $6.5 29 $6.5 $0.0 $6.5 30 $6.5 $0.0 $6.5 31 $6.4 $0.0 $6.4 32 $6.3 $0.0 $6.3 33 $6.2 $0.0 $6.2 34 $6.1 $0.0 $6.1 35 $6.0 $0.0 $6.0 36 $5.9 $0.0 $5.9 37 $5.8 $0.0 $5.8 38 $5.6 $0.0 $5.6 39 $5.4 $0.0 $5.4 40 $5.3 $0.0 $5.3 Present value $186.1 $55.0 $131.1 Internal rate of return Benefit-cost ratio Payback period (no. of years) 9.2% 3.4 11.7 Source: Emsi impact model. Chapter 3: Investment Analysis 58
Social perspective Texas benefits from the education that WTAMU provides through the earnings that students create in the state and through the savings that they generate through their improved lifestyles. To receive these benefits, however, members of society must pay money and forego services that they otherwise would have enjoyed if WTAMU did not exist. Society’s investment in WTAMU stretches across a number of investor groups, from students to employers to taxpayers. We weigh the benefits generated by WTAMU to these investor groups against the total social costs of generating those benefits. The total social costs include all WTAMU expenditures, all student expenditures (including interest on student loans) less tuition and fees, and all student opportunity costs, totaling a present value of $298.5 million. On the benefits side, any benefits that accrue to Texas as a whole – including students, employers, taxpayers, and anyone else who stands to benefit from the activities of WTAMU – are counted as benefits under the social perspective. We group these benefits under the following broad headings: 1) increased earnings in the state, and 2) social externalities stemming from improved health, reduced crime, and reduced unemployment in the state (see the Beekeeper Analogy box for a discussion of externalities). Both of these benefits components are described more fully in the following sections. SOCIAL COSTS WTAMU Expenditures Student Out-of-Pocket Expenses Student Opportunity Costs SOCIAL BENEFITS Growth in state economic base In the process of absorbing the newly acquired skills of students who attend WTAMU, not only does the productivity of the Texas workforce increase, but so does the productivity of its physical capital and assorted infrastructure. Students earn more because of the skills they learned while attending the university, and businesses earn more because student skills make capital more productive (buildings, machinery, and everything else). This in turn raises profits and other business property income. Together, increases in labor and non-labor (i.e., capital) income are considered the effect of a skilled workforce. Increased State Earnings Avoided Costs to Society Estimating the effect of WTAMU on the state’s economic base follows the same process used when calculating increased tax revenues in the taxpayer perspective. However, instead of looking at just the tax revenue portion, we include all of the added earnings and business output. We again factor in student attrition and alternative education opportunities. The shutdown point does not apply to the growth of the economic base because the social perspective captures not only the state and local taxpayer support to the university, but also the support from the students and other non-governmental sources. Chapter 3: Investment Analysis 59
Page 1 and 2:
AUGUST 2019 The Economic Value of W
Page 3 and 4:
Executive Summary This report asses
Page 5 and 6:
created by WTAMU is equal to approx
Page 7 and 8: Investment Analysis Investment anal
Page 9 and 10: Introduction West Texas A&M Univers
Page 11 and 12: CHAPTER 1: Profile of West Texas A&
Page 13 and 14: WTAMU employee and finance data TAB
Page 15 and 16: When using the Alumni Outcomes data
Page 17 and 18: The Texas Panhandle economy WTAMU s
Page 19 and 20: Table 1.4 and Figure 1.5 present th
Page 21 and 22: IN this chapter, we estimate the fo
Page 23 and 24: Operations spending impact Faculty
Page 25 and 26: the next four rows under the sectio
Page 27 and 28: non-labor income. This sums togethe
Page 29 and 30: ing impacts. Again, since construct
Page 31 and 32: of employees reported for each comp
Page 33 and 34: Calculating the increase in income
Page 35 and 36: the retained students, we estimate
Page 37 and 38: Alumni impact In this section, we e
Page 39 and 40: income is the difference between th
Page 41 and 42: Once these allocations are complete
Page 43 and 44: These impacts, stemming from spendi
Page 45 and 46: Student perspective To enroll in po
Page 47 and 48: their full earning potential that t
Page 49 and 50: Linking education to earnings Havin
Page 51 and 52: As shown in Table 3.2, the $44.6 mi
Page 53 and 54: Price Index), the corresponding nom
Page 55 and 56: We apply another reduction factor t
Page 57: TABLE 3.3: PRESENT VALUE OF ADDED T
Page 61 and 62: to income assistance amount to $1.5
Page 63 and 64: money spent on operations of the un
Page 65 and 66: WHILE WTAMU’s value to the Texas
Page 67 and 68: Buss, Christian, Jeffrey Parker, an
Page 69 and 70: Jaeger, David A. and Marianne E. Pa
Page 71 and 72: Ogden, Cynthia L., Molly M. Lamb, M
Page 73 and 74: U.S. Department of Health and Human
Page 75 and 76: Based on this sensitivity analysis,
Page 77 and 78: • Scenario 1: Increasing the perc
Page 79 and 80: Retained student variable The retai
Page 81 and 82: Economics Study of the allocation o
Page 83 and 84: Appendix 3: Frequently Asked Questi
Page 85 and 86: money” is called discounting and
Page 87 and 88: Appendix 5: Emsi MR-SAM Emsi’s MR
Page 89 and 90: Census’ Current Population Survey
Page 91 and 92: The matrices are built utilizing Em
Page 93 and 94: Appendix 6: Value per Credit Hour E
Page 95 and 96: economics. Those critical of the Mi
Page 97 and 98: Appendix 8: Overview of Investment
Page 99 and 100: 10 years from today given the going
Page 101 and 102: Appendix 9: Shutdown Point The inve
Page 103 and 104: Consider benefits now with referenc
Page 105 and 106: Appendix 10: Social Externalities E
Page 107 and 108: y education, gender, and ethnicity.
Page 109:
weighted heavily towards the less t
show all

The Economic Value of WTAMU Main Report

Create successful ePaper yourself

Delete template?

Save as template?