the economic impact of the foothill-de anza community college district and its students october 17,...

The Economic Impact of the Foothill-De Anza Community College District and its Students

October 17, 2005

Kevin StangeGraduate Student Researcher

Department of Economics

University of California, Berkeley

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or [email protected]

2

Overview

1. What is the aggregate impact of Foothill and De Anza Colleges on the local economy?• Spending by the District• Spending by students• Indirect and multiplier effects• Investment in workforce productivity

2. What is the effect of an additional local tax dollar spent at Foothill and De Anza Colleges?• Matching from other funding sources• Benefits: Indirect multiplier effects and workforce

productivity effects


3

Overview





4

150

216

3661

816

?

353

?

Direct FHDASpending

IndirectFHDA

Spending

Direct FTStudent

Spending

Indirect FTStudent

Spending

AlumniEarningsIncrease

TotalQuantified

Impact

UnquantifiedSocial

Benefits

Total Impact

Total Annual Impact of Foothill-De Anza CCD2003-2004 Fiscal Year$ Millions

Foothill and De Anza Colleges contribute at least $800 million to the local economy every year


5

Goods and Services• Costs of goods sold• Materials & supplies• Operating expenses• Some capital outlay

Direct Operating Expenses by Foothill-De Anza CCD2003-2004 Fiscal Year

77%

Employee Compensation• Faculty• Staff• Students• Administrators

Foothill and De Anza Colleges spend $195 million on operations every year, primarily for employee compensation

18%

Financial Aid to Students

4%

Total Yearly Operating Expenditure: $195 million


6

3,898,766

3,335,067

2,297,980

2,227,189

1,872,506

1,067,558

5,358,257

4,463,902

1,798,814

1,788,384

1,660,605

1,569,087

1,459,5991,044,074

De Anza Science Center

Foothill Classroom/Office Renovation

De Anza L Quad

De Anza Parking Improvement

Smithwick Theater Renovation

Flint Center Seat Replacement

Foothill Bus./Soc. Science Renov.

De Anza Child Development Center

Foothill Center for Innovation

De Anza Pool

De Anza Mobile Village

Foothill Temporary Facilities

Foothill Parking Lots 2 & 3

De Anza Faculty Offices

Foothill Fine Arts Renovation

20,281,819

Completed 02/03

Completed 03/04

Total Cumulative Spending on Major Recent Capital Projects, $ Dollars

108.0

32.6

31.3

42.8

10.3

23.7

3-yearAverage

Total

FY 03/04

FY 02/03

FY 01/02

BeforeFY 01/02

Total Annual Spending on All Recent Capital Projects, $ Millions

Foothill and De Anza Colleges have completed numerous capital projects in the past few years – approximately $33

million of capital project spending annually


7

Foothill-De Anza Community College District is also a Major Local Employer

• The District has approximately 3,000 full-time and part-time employees

• Nearly half are faculty

• Almost all live in or near the District

• The District is Silicon Valley’s 20th largest employer– Comparable to Adobe Systems and Electronic Arts– Among colleges, behind only Stanford and San Jose

State


8

Foothill and De Anza students spend over $300 million in the local economy

$3,403

$846

$2,241

$3,564

$1,287

$818Registration and

Fees

Books andSupplies

Room and Board

Transportation

Personal/miscellaneous

Non-ResidentTuition (if app.)

Full-Time, Full-Year CostFull-Year (3 terms) Students

10,092 Full-Time, Full-Year* Students

35,701 Part-Time, Full-Year* Students

27,942 Full-Year FT and PT Students**

+

* Equivalent to three quarters** Counts part-time students 50%

Total Student Spending: $99.9 million (FT only)

$303. 3 million (FT and PT)

X


9

Spending by the District and its students generates more than $185 million indirect spending and more than 3,000 jobs

277

61

33

36

147

216District

Spending

Payroll

Purchasing

Construction

FT StudentSpending

Total Distictand Student

Direct Spending ($ millions) Multipliers

Spending by District$1.67 Total Spending$1 Direct Spending

20.8 Total Jobs$1million Direct Spending

Spending by Students$1.59 Total Spending$1 Direct Spending

22.5 Total Jobs$1million Direct Spending

Total Indirect Spending: $149.5 million (District)$36.1 million (Students)

X

Total Indirect Jobs: 1,943 jobs (District)

1,376 jobs (Students)


10

0

250,000

500,000

750,000

1,000,000

1958 1963 1968 1973 1978 1983 1988 1993 1998 2003

Earned Credit Hours per Year1958-59 to 2004-05 Academic Years

0

20,000

40,000

60,000

80,000

1958 1963 1968 1973 1978 1983 1988 1993 1998 2003

Number of Unique Students1958-59 to 2004-05 Academic Years

0

5

10

15

20

1958 1963 1968 1973 1978 1983 1988 1993 1998 2003

Earned Credits per Student1958-59 to 2004-05 Academic Years

X =

FHDA students earn more than 800,000 credit-hours per year


11

Fraction Moving From County over Five Year Period

47%

42%

34%

23%

19%

15%

13%

14%

14%

11%

13%

10%

16%

less than 20

20 to 24

25 to 29

30 to 34

35 to 39

40 to 44

45 to 49

50 to 54

55 to 59

60 to 64

65 to 69

70 to 74

75 +

Migration and Mortality

Fraction Participating in Labor Force inSan Jose MSA, 2000

56%

70%

75%

79%

78%

83%

80%

77%

49%

26%

16%

9%

7%

74%

less than 20

20 to 24

25 to 29

30 to 34

35 to 39

40 to 44

45 to 49

50 to 54

55 to 59

60 to 64

65 to 69

70 to 74

75 to 79

80 +

Labor Force Participation

100%

99%

99%

99%

98%

97%

96%

91%

87%

80%

70%

100%

94%

Fraction Surviving over Five Year

Period

Mortality, migration, and labor force non-participation reduce credit accumulation in local workforce


12

Total Estimated Foothill-De Anza Credits Embedded In Local Population and Workforce

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

1958 1963 1968 1973 1978 1983 1988 1993 1998 2003

Total Credits in Population, 2004 = 10,011,146

Total Credits in Workforce, 2004 = 7,062,040

More than 7 million college credit hours are actively employed in the local workforce


13

Average Earnings, 2000

13,844

21,401

34,408

39,922

43,557

47,978

45,846

47,115

37,886

28,116

49,140

16 to 19

20 to 24

25 to 29

30 to 34

35 to 39

40 to 44

45 to 49

50 to 54

55 to 59

60 to 64

65 and older

Age GroupEstimated $ Value of Each FHDA Credit Earned

$18.46

$28.53

$45.88

$53.23

$58.08

$63.97

$61.13

$62.82

$65.52

$50.51

$37.49

Every forty-five college credits increase earnings by 6%


14

Total Embedded Credits, 2004

518,829

1,019,229

969,646

891,619

814,320

816,299

730,973

590,709

185,162

63,057

25,948

9,167

4,817

422,264

less than 20

20 to 24

25 to 29

30 to 34

35 to 39

40 to 44

45 to 49

50 to 54

55 to 59

60 to 64

65 to 69

70 to 74

75 to 79

80 +

Age of Worker in 2004

Estimated $ Value of Embedded Credits ($ millions)

$9.6

$29.1

$44.5

$47.5

$47.3

$52.2

$44.7

$37.1

$27.7

$9.4

$2.4

$1.0

$0.3

$0.2

$352.8 million total earnings

7,062,040total credits

More than $350 million of earnings by local alumni can be attributed to Foothill and De Anza Colleges


15

Overview





16

Income Sources of Foothill-De Anza Community College District2003-2004 Fiscal Year

22%

51%

5% State Sources

Federal Sources

Property Taxes

Tuition

Other Local Sources

Each $1 of property tax is matched by $0.95 of other funding

13%

9%

5%


17-300,000,000

-200,000,000

-100,000,000

0

100,000,000

200,000,000

300,000,000

Present Value of Future Earnings Increase: $276,463,813

Indirect Spending (Multiplier Effect):

$ 152,485,336

Investment Benefits

Present Value of Costs and Benefits of Foothill-De Anza Investment2003-2004 Academic Year

-300,000,000

-200,000,000

-100,000,000

0

100,000,000

200,000,000

300,000,000

Direct Spending: $227,590,053 Investment Costs

2005 2010 2015 2020 2025 2030 2035

Each $1 of direct FHDA spending generates $1.88 of indirect spending and future earnings gains


18

What are the effects of additional spending

at FHDA?

How far do local property taxes go?

$1 Property Taxes

$1.95 Total Spending by Foothill-De Anza

$1 Spending by

Foothill-De Anza

$0.67 Indirect Spending

+$1.21 Alumni Earnings

Increase=

$1.88 Economic Impact

What is the effect of additional property

tax spending?

$1 Property Taxes

$3.67 Economic Impact

Each $1 of property taxes generates $3.67 of total economic impact


19

Conclusions

• Foothill and De Anza Colleges have a tremendous impact on Silicon Valley’s economy

• Approximately $800 million of local income can be attributed to – directly and indirectly – the presence of Foothill and De Anza Colleges and their students

• Numerous other benefits (e.g., improved health, reduced crime) are also present, but have not been quantified

• The Colleges are an attractive investment for local taxpayers due to increased workforce productivity and induced indirect spending

the economic impact of the foothill-de anza community college district and its students october 17,...

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