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Suffolk. County. Community. College. Presenting the Socioeconomic Benefits of. Reports Produced by CCbenefits, Inc. Main Volume (98 pages). Executive Summary (6 pages). Fact Sheet (1 page). Detailed Results (10 pages). Narrow & Broad Taxpayer Results (1 page). PowerPoint Presentation.

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Presenting the socioeconomic benefits of

Suffolk

County

Community

College

Presenting the Socioeconomic Benefits of


Reports produced by ccbenefits inc
Reports Produced by CCbenefits, Inc.

  • Main Volume(98 pages)

  • Executive Summary(6 pages)

  • Fact Sheet(1 page)

  • Detailed Results(10 pages)

  • Narrow & Broad Taxpayer Results(1 page)

  • PowerPoint Presentation



Components of the study

1. RegionalEconomic Development

2. Investment Analysis

Components of the Study


Beginning with the

Regional Analysis


Regional economic development
Regional Economic Development

What we measure:

  • We begin with the usual multiplier impacts due to college operations spending.

  • To this we add impacts associated with past students still active in the local workforce.

  • Together, these measure the impact of the college relative to total earnings in the college service area.


College Operations Spending

Colleges are similar to other local industries in that they spend money and employ people. College operations spending include direct earnings of faculty and staff, as well as the indirect earnings due to associated multiplier effects.

1. College Operations Spending


Direct earnings:

SCCC

q

employed

980

full

-

time and

1,712

part

-

t

ime faculty and staff in FY

2003

. This amounts to a total

payroll of

$101.0

million

.

Indirect earnings:

Faculty

q

and staff wages and salaries

add

$52.3

million

worth of

income as they are spent in

the local region.

College Operations Spending


Past-Student Productivity Effects

1. College Operations Spending

2. Past-Student Productivity Effects

In addition to college operations spending, we add the impacts (higher earnings) associated with students who have obtained their education at our college and are still active in the local workforce.


Past student productivity effects

Direct Earnings:

Past students

q

$527.8

million

contribute an estima

ted

worth of added income per year to the

regional economy after leaving

SCCC

.

Indirect Earnings:

T

he estimated

q

multiplier effect of past student

earnings in other industries increase

$537.5

million

.

output by yet another

Past-Student Productivity Effects


Total earnings in college service area
Total Earnings in College Service Area

1. College Operations Spending

2. Past-Student Productivity Effects

3. Total Earnings in College Service Area

This comprises all of the earnings in the defined economic region. This provides the backdrop for expressing the relative role of college operations spending and past student productivity effects in the local region.


The defined economic region

q

$27.6

billion

generated

in total

earnings in FY

2003

.

Of this, the college operations

q

spending and past student productivity

effects accounted for

$1.2

billion

,

or

4.4%

of all regional earnings.

Total Earnings in College Service Area


To summarize
To Summarize…

Earnings

$1,000

% of

Total

College Service Area

This comprises the total earnings in the defined economic region.


To summarize1
To Summarize…

Earnings

$1,000

% of

Total

College Service Area

Direct Earnings: Faculty and Staff

This is the salaries and wages of the college, expressed as a fraction of the region’s total earnings.


To summarize2
To Summarize…

Earnings

$1,000

% of

Total

College Service Area

Direct Earnings: Faculty and Staff

Indirect earnings

Indirect earnings stem from the action of multiplier effects. They occur as college salaries and operating expenditures ripple through the regional economy.

The multiplier is the sum of direct and indirect earnings divided by direct earnings.


To summarize3
To Summarize…

Earnings

$1,000

% of

Total

College Service Area

Direct Earnings: Faculty and Staff

Indirect earnings

Direct Earnings: Past Students

We now add the direct earnings of past students still active in the local workforce. These students add value because of the education they obtained while attending college.


To summarize4
To Summarize…

Earnings

$1,000

% of

Total

College Service Area

Direct Earnings: Faculty and Staff

Indirect earnings

Direct Earnings: Past Students

Indirect Earnings

Next we add the earnings indirectly explained by the actions of past students in the local economy.


To summarize5
To Summarize…

Earnings

$1,000

% of

Total

College Service Area

Direct Earnings: Faculty and Staff

Indirect earnings

Direct Earnings: Past Students

Indirect Earnings

Grand Total

The total shows the extent to which the activities of the college impact the regional economy.


Investment analysis

Investment Analysis

Continuing with the


Investment analysis component
Investment Analysis Component

What we measure:

  • Thestudent benefits due to higher earnings

  • A broad collection of externalsocial benefits

    • Medical savings

    • Crime savings

    • Welfare and unemployment savings

  • The return to taxpayers for their support

    • Broad taxpayer perspective

    • Narrow taxpayer perspective


Higher earnings =

Student costs =

Student Benefits

This figure shows the present value of increased future earnings as a direct result of the students’ education.

Student costs consist of the tuition paid by the students and, most importantly, the opportunity cost of time (earnings foregone).


Higher earnings =

Student costs =

Benefit/Cost Ratio:

Student Benefits

Benefit/Cost Ratio: The ratio of benefits over costs. A 1.5 ratio, for example, means that every dollar invested will return a cumulative $1.50 to the investor over the time period analyzed.

Criterion for feasibility: The B/C ratio must be greater than or equal to 1.


Higher earnings =

Student costs =

Benefit/Cost Ratio:

Rate of Return:

Student Benefits

Rate of Return: the average earning power of the money used over the life of the investment. A 15% rate of return, for example, means that the revenues collected over time will equal the costs, plus generate a 15% return.

Criterion for feasibility: the rate of return must exceed the returns from alternative uses of the same money.


Higher earnings =

Student costs =

Benefit/Cost Ratio:

Rate of Return:

Payback Period:

Student Benefits

Payback Period: This is the length of time needed from the beginning of the investment before the cumulative future revenues return all of the investments made.


Student benefits

Achieving an

A

ssociate Degree

from

q

SCCC

will increase earnings to

$42,819

per year, or

35.1%

more

than the average

high school graduate.

An A

ssociate Degree

graduate will

q

earn

$452,509

more

than someone with a

hi

gh school diploma or GED over his or

her future career.

Lifetime earnings will increase

$6.58

q

for every dollar invested

(tuition, fees,

books, and foregone earnings).

Student Benefits

Some Key Findings


Social benefits

Aggregate.

Medical Savings

Crime Savings

Welfare/Unemployment Savings

Total

Social Benefits

The medical, crime and welfare/unemployment savings are avoided costs, i.e., the reduced burdens on employers and taxpayers. These external social benefits are generated annually as the education level of the workforce increases.


Benefit/Cost Ratio:

Return to Taxpayers

Broad Taxpayer Perspective

Taxpayers Costs = State Appropriations + Property Taxes

Taxpayer Benefits =Higher Earnings + Social Benefits

The broad perspective: State taxpayers invest, but beneficiaries are widely dispersed (students, business community, society). We count all of the benefits regardless of to whom they accrue.


Return to Taxpayers

Narrow Taxpayer Perspective

Taxpayers Costs = State Appropriations + Property Taxes

Taxpayer Benefits =More Taxes Collected + Social Benefits

Here we only count the “book revenues”—the monies actually returning to the state treasury. For example, as students increase their earnings, the state collects more sales, income, and property taxes.


Benefit/Cost Ratio:

Rate of Return:

Payback Period:

Return to Taxpayers

Narrow Taxpayer Perspective

Note that for a public investment, the typical expectation is that the benefit/cost ratio be > 1 and that the rate of return be > 4%. As you can see, the results far exceed these expectations.



To summarize6

The

SCCC

r

egional economy is

measurably stronger

Taxpayers in the

State

of

New

York

are measurably better off

The

SCCC

s

tudents are

measu

rably better off

To Summarize…

  • IT PAY$ BACK:

  • IT PAY$ TO INVEST:

  • IT PAY$ TO LEARN:


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