The writer is Dr. Daniel P. Larson, president of Cayuga Community College, with campuses in Auburn and Fulton, N.Y.
As taxpayers tighten their fiscal belts and become increasingly vigilant about government spending, agencies at local, state, and national levels keenly feel the pressure to review their operations and to assess their return on investment. A sluggish economy often leads government to cut back in discretionary or non-essential areas like public parks, repairs and maintenance, or community grants – services that the public may desire because of their immediate impact, but which generally do not generate large financial returns.
It was clear at a recent meeting where I spoke about the College that people do not understand the direct and indirect return the community receives on every dollar invested in Cayuga Community College. Shortly after I arrived at Cayuga in August 2007, the College commissioned Economic Modeling Specialists to conduct an analysis of our economic impact on the region. The findings indicate that the College out-performs a solid stock market portfolio, which experts say hovers around a 10% return annually. State and local governments receive a direct rate of return of 12% on their investment in the College through increased revenue and avoided social costs.
Cumulatively, for each dollar appropriated by State and local government to the College, taxpayers see a return with added value of $3.30 in the form of higher tax revenues and avoided social costs attributable to education. According to the data, the State saves an estimated $71,300 annually in avoided social costs, as Cayuga graduates are more likely to have lower health costs and less likely to be in criminal trouble and to be on welfare or unemployment support than people who do not attend college. In fact, 70% of Cayuga graduates live in Central New York and 97% live in New York State, joining the regional workforce and expanding the area tax base by generating higher incomes.
The College is one of the largest employers in the Auburn area, with about 200 full-time and 250 part-time employees who brought home $16.8 million in salaries during the 2010-11 academic year. Additionally, 59% of our students live outside of Cayuga County, generating chargeback funds and several hundred thousand dollars in regional sales while attending the College. Without these students, the College and our community would be much different.
Capital projects, like the new Schwartz Family Performing Arts Center to be constructed on State Street, bring into our community millions of dollars in matching funds from New York State. These dollars stream through the local economy in the form of supplies and materials, salaries, equipment, and related spending. Last year, an estimated $25.5 million, or 85% of the 2010-11 annual operating budget for the College, returned to the local region, based on the economic impact study model.
Although these are direct returns, the College provides an additional wealth of broader benefits. Employers benefit from a stronger, better-trained workforce and increased productivity. Small business owners, whose expertise and services range from cooking and jewelry-making to insurance and tax law, can generate additional income by teaching in our Community Education programs. These non-credit programs have grown in the last couple of years from a few hundred students annually now to nearly 4,000. Cayuga students chart new career paths, develop their minds and critical thinking skills, and contribute to the communities in which they live.
By our best estimates, the College generates 22 times the $2.8 million direct annual contribution from Cayuga County taxpayers. Overall, that really is a much better return than any shareholder on Wall Street could dream of, much less promise, today.