Non-Environmental Cost-Benefit News

Link: http://www.wataugademocrat.com/2005/0404web/caldwellcollege.php3

A statewide study on the economic benefits of community colleges suggests they return money to their communities and improve overall quality of life.

The study was conducted last fall by the firm CCbenefits Inc. as part of the community college system’s response to lawmakers who requested educational accountability. Ken Boham, president of Caldwell Community College & Technical Institute (CCC&TI), said the study was presented to the General Assembly earlier this year, then released to the various boards of trustees. It was recently released to the media and public.

“We gave the General Assembly some comprehensive information about impacts the system has on the state of North Carolina,” Boham said. He served as president of the statewide system a year ago and was one of the driving forces behind launching the study. The study not only analyzed impact over the whole state, it was narrowed by region as well. For instance, CCC&TI received separate data on the impacts in both Caldwell and Watauga counties, where it has campuses.

“We’ve always felt the system is certainly a good bargain,” Boham said. “Based on anecdotal evidence, we felt it, we knew it, and there were a number of indicators to say that. This is the first time we’ve been able to put it into numbers.”

Boham said the “bottom line” was that for every dollar invested in the community college system, the community and state receive $14.3 in benefits.

“It’s a good economic engine in Catawba and Watauga counties,” he said. “It’s an investment in both counties as well. It’s value-added when you look at the payoff down the road to students, and what they’re investing in return in the period of time they’re in the work force.”

Boham said not only is community college a good investment for communities, but also for the students themselves. He said the payback period for a graduate, the point at which the money spent on education equals the extra income earned through a higher educational or training level, was fewer than seven years. When measured over the typical 30-year working career, that means extra income accrues substantially.

CCC&TI employed 268 full-time and 425 part-time faculty in 2002, the fiscal year of the study. That amounted to a payroll of $3.1 million in Watauga. Faculty spent about $1.4 million in the county.

According to the study, former students contribute an estimated $14.8 million worth of added income to the regional economy after they graduate.

The survey also revealed that taxpayers expect their investment in community colleges to result in higher lifetime earnings for students and social savings from lifestyle changes that lead to reduced crime, welfare and unemployment, and improvements in health. Boham said this is borne out by data that show employers in the CCC&TI service region will see health-related employee absenteeism drop by over 3,300 worker days per year, and the community college experience will yield 11 fewer smokers and 23 fewer alcohol abusers. That will also result in savings in insurance premiums and Medicaid and Medicare withholdings.

“We’re talking about quality of life,” Boham said. “Health-related absenteeism declines as students become more attuned to health issues and take a different view.”

Boham said that in a cost-benefit analysis, the data shows not only savings but future benefits, with an estimated $2.1 million in social-related savings. “The students are getting more than they put in, and the taxpayers are getting more than they’re putting in,” he said. “It would definitely be an opportunity lost if we didn’t have a community college.”

The study suggested the community college system led to 34 fewer people being incarcerated, with a resulting social savings of $317,000, with victim costs declining by $350,000. Welfare rolls will drop by 92 people in the service area, and 38 fewer people will draw unemployment benefits, amounting to a total taxpayer savings of $770,000 per year.

About 70 percent of students who attend CCC&TI remain in the area, the study found, nearly 30 percent of them residing in Watauga County, which contributes to the local tax base. Additional skills lead to higher earning potential, and a two-year community college degree will generate the graduate an estimated quarter of a million dollars over the course of a career more than if they had only a high school diploma. For every year they attend, students earn an additional $3,400 per year in their chosen field. That reflects a 21-percent rate of return if calculated on the same basis as historical investments in stocks and bonds.

Boham said the data can be used not only to lobby the General Assembly for continued support, but to show positive results to foundations and private donors who might contribute to the community college system.

by Scott Nicholson nicholson@wataugademocrat.com
The Watauga Democrat www.wataugademocrat.com
http://www.wataugademocrat.com/2005/0404web/caldwellcollege.php3