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Hillsborough Community College touts $866 million in economic impact

As he makes the rounds of local business and civic groups, what new Hillsborough Community College president Ken Atwater hears about HCC is encouraging but incomplete.

Many people know the college as a stepping stone to a four-year institution.

Lesser known is the college's impact on the local economy.

So Atwater is speaking to local groups and handing out glossy fact sheets touting a new economic impact analysis done by Economic Modeling Specialists Inc. An Idaho company, EMSI has done 900 such studies for colleges on three different continents.

The analysis concludes that HCC contributes $866.1 million to Hillsborough County's economy each year. That's about 1.5 percent of the county's economy.

"We want to tell the story," said Atwater, who started in July, months after the college commissioned the $8,000 study. "We need to let people know we have a major economic impact."

In times of tight budgets, that's a key talking point for Atwater, who comes to HCC with a reputation for building community partnerships.

The college gets nearly half its $141.6 million in annual funding from the state. Another quarter comes from tuition and about a fifth comes from the federal government. County funding accounts for about 1 percent of the college's revenue.

Most of HCC's economic impact, according to the analysis, comes from graduates and other former students who picked up job skills at HCC and now earn more than they would as high school graduates.

HCC says 75 percent of its students settle in Hillsborough County. Moreover, community college graduates earn, at the midpoints of their careers, $12,000 a year more on average than workers who merely have high school diplomas. That's $34,000 a year for high school graduates versus $46,300 a year for those with associate's degrees in Hillsborough.

With more than 30 years of former HCC students in the county, that added earning power translates into $786.5 million a year in additional income for the county, according to the study.

Additionally, the impact of direct college spending, such as the institution's payroll, is estimated at more than $70.6 million annually. That's the net impact, after subtracting taxes and other money withdrawn from the county's economy to support HCC.

Several economists who study higher education economics and community colleges in particular said the study's focus on the increased earning power of former students is not unusual.

"I think what they've done is basically sound," said Terance J. Rephann, a regional economist with the Weldon Cooper Center for Public Service at the University of Virginia.

But he and other economists cautioned that the underlying details, assumptions and methodology can make significant differences in bottom-line estimates.

Richard Vedder, an Ohio University economist who researches economic issues in American education, said he would be loath to offer a single economic impact number for the college even if he had all the data used in HCC's study. The college doesn't really know what all its graduates and former students earn, Vedder said. (In the study, EMSI said it derived its average income expectations for Hillsborough workers from its own industry data, plus Census Bureau figures.)

There's "a lot of room for error" when using group data rather than individual data for such comparisons, Vedder said.

Also, HCC's estimate of the rate of return for students on the time and money they invest in their education seemed high, he said, although not "implausibly" so.

On average students see a 16.1 percent rate of return on their investment of time and money at HCC, according to the EMSI study.

Another study, by University of Illinois economist Walter McMahon, found a 13.6 percent rate of return for U.S. students who earn associate's degrees.

Even beyond the return to students, though, McMahon said investments in higher education pay off in broader ways as well. Higher levels of education correlate with lower rates of smoking, alcohol use, crime and welfare claims.

In the HCC study, EMSI estimated that Florida saves $7.6 million a year because the people educated by HCC commit fewer crimes, enjoy better health and need fewer unemployment and welfare benefits.

In coming months, HCC's leaders plan to champion the economic benefits of their school — for students, for the county and for Florida.

"We want county and regional support for what we're doing," Atwater said. "We think we're a good investment."

Growth expected

Hillsborough Community College's impact in northwestern Hillsborough could grow even more in coming years. HCC recently got state approval to explore establishing a new center for residents of Lutz, Odessa, Citrus Park and other parts of northwestern Hillsborough. The college doesn't yet have a location, the money or the schedule set for the expansion. But it does estimate that last year it had 3,500-plus students from the area. Currently, many go to the Dale Mabry campus, HCC's largest.

Estimated

annual impact

Hillsborough Community College administrators say the college adds to the county's economy through:

College spending:

$70.6 million

Student spending:

$8.9 million

Increased earnings for former students:

$786.5 million

Total: $866.1 million

Source: Hillsborough Community College, Economic Modeling Specialists Inc.

Hillsborough Community College touts $866 million in economic impact 10/21/10 [Last modified: Thursday, October 21, 2010 4:30am]
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