Study shows MC adds $65 million to area economy annually
October 8, 2003
Eight counties in the East Tennessee region would be poorer without Maryville College – at least $65 million a year poorer, according to a recent economic impact study.
The College recently hired Dr. Fred Martin, a local educational consultant to run the numbers. Looking at a five-year period (1997 to 2002), he estimated that the College contributed more than $325.7 million to the region’s economy – an average of more than $65 million a year.
The study focused on three major areas of the College’s economic impact: Local business volume generated by College expenditures ($157.4 million); local full-time jobs created by Maryville’s presence (11,543 in five years) plus the College’s own 1,424 full-time jobs counted over the five-year period; and individual income generated by College expenditures ($168.3 million).
The counties most economically benefited by the College’s operation include Blount, Knox, Anderson, Hamblen, Loudon, McMinn, Roane and Sevier. Approximately 65 percent of the College’s expenditures are made in those counties, and more than 40 percent of the College’s student population comes from those counties, as well.
Previous to this most recent study, the College had estimated that the annual economic impact in the area was approximately $36.5 million – a little more than half of Martin’s estimate.
Martin said his analysis was based on the Caffrey model, which was developed in 1968 and considered a standard by the American Council on Education. Caffrey is considered more sophisticated and more reliable than other models that simply apply an economic impact multiplier of 1.7, Martin explained.
The consultant, who has conducted similar economic studies at several public community colleges, said he was surprised by some of the results. For example, he was surprised by the difference in economic impact that tuition revenues from private institutions generate as compared to public institutions.
Also, Martin said the percentage of local revenues is considerably higher from a private college than that of a public institution because of the influx of private donations and scholarship dollars (as opposed to funding from state and federal sources).
But Martin said he wasn’t surprised to find proof that the College is a major economic force in the region.
“Colleges and universities often fuel the economy in the communities where they operate. This study is just an indicator of what kind of an economic engine Maryville College is in the region,” he said, adding that communities with institutions of higher learning often fare better in slower economic times because of their stability.
“Education is always needed,” he said. “Colleges and universities are usually more economically stable because they’ll maintain a relatively constant enrollment. People are willing to sacrifice for education because they see it as paying off, long term.”
Dr. Gerald W. Gibson, Maryville College president, said he regularly tells people that the College is an “appreciating asset” in the area in terms of graduates produced and services and facilities provided to the community, but is pleased to have information to share about the College being a tremendous economic asset, as well.
Also worth noting is what the study doesn’t include, Gibson added.
“We didn’t factor in the value that results from the improved productivity and quality of life achieved through increased education, nor did we include the direct impact of having citizens, leaders and educated persons available for employees and organizations,” he said. “That sort of indirect economic impact cannot be forgotten. Companies simply wouldn’t locate here if they couldn’t find the human resources they needed or the opportunities for personal growth that the College offers this region.”