Destination University Economic Impact Report

8/7/2019 Destination University Economic Impact Report

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A Report of the Economic Impact

of

the

Creation

of

a

DestinationUniversity as Part of the Conversion of the University of Houston Victoriafrom a Two Year Upper Level

Institution to a Four Year Resident

Campus

April 21, 2010

Prepared for:

Victoria Economic Development Corporation700 N. Main Street, Suite 104Victoria, Texas 77901

Prepared by:

Impact DataSource

4709 Cap

Rock

DriveAustin, Texas 78735

(512) 892 0205Fax (512) 892 2569www.impactdatasource.com


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Executive Summary ......................................................................................................... 3

The Report:

Introduction .................................................................................................................. 8

Description of the University .....................................................8

Construction of the Initial Expansion Campus ...........................10

Types of Impacts that the University's Expanded Operations as a ............................... 12 Four Year Resident Campus will Provide

Direct Impact of the Operations of the Expanded University ... 13

The Direct, Indirect and Induced Economic Impact of the .........16 Operations of the Expanded University

Taxable Spending Expected in the Region .................................16

Spending on Motel Rooms ........................................................ 20

Table of Contents

Page 2

Residential and Commercial Property to be Added to Local Tax Rolls ......................... 20

Summary of the Economic Impact of the Operations of the Expanded ....................... 22 University

Additional Revenues for Local Taxing Districts and the State .......................................23

Return on Investment in Funding to Construct the Initial Campus .............................. 28 at the University of Houston Victoria

Socioeconomic Benefits of Higher Education ................................................................ 30

Conclusion .................................................................................. 37

Conduct of this Analysis ............................................................. 38

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This report presents the results of an economic impact analysis performed by Impact DataSource, an Austin, Texas economic consulting and research firm. The purpose of the analysis was to determine the economic impact of the creation of a destination university as part of the conversion of the University of Houston Victoria from a two year upper level institution to a four year resident campus.

In addition, this report addresses the social benefits to the region through the creation of a more highly educated workforce. This report represents a snapshot of the first 10 years of the Universitys expanded operation.

The economic impact of the University's expanded operations was projected for ten years, 2015 2024.

The University

The University of Houston Victoria currently serves junior, senior and graduate level students. In thefall 2010, the University will accept freshmen for the first time. This change is due to legislation

being passed and signed by Governor Perry in the most recent legislative session.

Coursework is also offered over the internet through distance education, and at two teaching centers: UHS Cinco Ranch and UHS Sugar Land. UHV now serves an expanded area of 15 counties, offering 33 Bachelors and Masters Degree Programs and has 3,658 students in the fall 2009. Of those 3,658 students, 503 are students taking face to face classes in Victoria. Since the mid 1990s, student growth from Victoria County tapered to about 1.5% annual growth. All new enrollments have been, essentially, from the Katy/Sugar Land area or through online distance learning offerings.

Executive Summary

Page 3

Planned Expansion

To accommodate projected growth in enrollment to 4,084 in Victoria and total enrollment of 9,360 by academic year 2019 20, an estimated 630,000 square foot of space will be needed based on predictionsby the Texas Higher Education Coordinating Board's Space Prediction Model of square footage.Currently, the University has 169,000 square feet of space.

Economic Impact of the University's Construction Activities

The University's planned $103.5 million construction ($71.5 million for academic classrooms and offices and $32 million of private funding for 800 beds of student housing will have a significanteconomic impact on the economy of Victoria and Victoria County over the nearly two year construction

period.

The University's construction activities will create $157.7 million in direct and indirect economic output or revenues for businesses in the region, create and support an average of 974 jobs each year over the construction period and create and support $80.5 million in salaries for workers in the region.

Economic Impact of the University's Expanded Operations over the Ten Years of its Expansion

The direct economic impact of the operations of the University over the ten years of its expansion will be

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$1.05 billion. This will include payments that the University will make for employee, faculty and staff salaries, purchases of goods and services and other expenditures. The direct spending by the University will generate another $1.724 billion in indirect sales or economic output in businesses and other organizationsin the region. In total, the economic impact of the operations of the University over ten years of the expansion will be $2.78 billion.

While the

University

will

employ

933

individuals

by

2024,

the

Universitys

spending

during

its

operations will support another 839 jobs in the region. In total, the University's operations over theten years of the expansion will support 1,772 jobs in the region.

Similarly, while the salaries of the Universitys employees, staff and faculty, along with financial aid availableto students, will total $865 million over ten years, the Universitys spending will support another $654million in salaries for workers in related spin off jobs supported in the region. Therefore, total salaries and financial aid supported by the University's operations over ten years will be $1.5 billion.

This economic output and related jobs and salaries supported by the University will be responsible forsignificant retail sales in the region, spending on lodging and residential and commercial property added

to local tax rolls. Some of these economic impacts are shown below.

Number of direct and indirect jobs to be created 1772Number of workers moving to the community 467Number of new residents in the region 1518

Summary of the Economic Impact of the University'sExpanded Operations over the Ten Years of the Expansion

Page 4

um er o new s u en s n pu c sc oo s n e reg onSalaries to be paid to direct and indirect workers

Taxable sales

in

the

communityRoom nights at local motels 88,210

Lodging sales at local motels $11,158,831Residential property added to local tax rolls, including construction of apartments to meet the needs of

off campus students and housing for new workers moving to the region

Commercial property, including retail, added to local tax rolls $21,905,270in the region

$1,519,555,860

$449,342,194

$86,308,831

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The economic activity generated by the University will translate into substantial revenues for local taxingdistricts and the State of Texas. These additional revenues over ten years are shown below.

City of

Victoria: Sales taxes $6,740,133

Property taxes $4,273,193 Hotel occupancy taxes $748,137 Total $11,761,463Victoria County: Sales taxes $2,246,711 Property taxes $2,276,386 Total $4,523,097Victoria County Navigation District $202,728Victoria County Road and Bridge $364,381Victoria ISD $8,763,027Victoria College $1,016,291Victoria County Ground Water District $63,270

Total additional revenues for local taxing districts $26,694,257

State of Texas sales tax collections $28,083,887

Additional Revenues for Local Taxing Districts and the State of Texas over Ten Years of the Expansion

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o a revenues or e a e an ocataxing districts

Return on Investment in Funding to Construct the Initial Campus at University of Houston Victoria

What is the return on investment for the cost of constructing the initial UHV expansion campus?

The return on investment can be measured by comparing the cost of constructing the campus tothe increase in gross area product, salaries, and taxable sales generated from the operations of the campus, along with the increase in residential property and commercial property added to local taxrolls by the campus expansion, among others. The earnings of a higher educated workforce in thethe region and their spending would also greatly expand the return on this investment.

, ,

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The returns on investment for ten years are shown below.

Initial investment to construct the campus:

State funds

to

construct

the

initial

campus $71,580,000Costs of student housing funded by outside sources $32,000,000

Total initial costs $103,580,000

Increases from the operations of the campus:

Gross area product, in millions of dollars $2,780Taxable sales in the area, in millions of dollars $435Personal income including salaries of direct and indirect workers $1,520

and financial aid available to students, in millions of dollarsValue of residential and commercial property added to tax rolls, in millions of dollars $108Revenues for the state and local taxing districts, in millions of dollars $55

Number of direct and indirect jobs 1,772

Dollar returns for each dollar invested to construct the campus:

Gross area product $39Taxable sales in the area $6

Ten Year Returns on Initial Investment of Costs to Construct the Initial Campus

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ersona ncome nc u ng sa ar es o rec an n rec wor ersand financial aid available to students

Value of

residential

and

commercial

property

added

to

tax

rolls $1.51Revenues for the state and local taxing districts $0.77

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Socioeconomic Benefits of Higher Education

Many studies have been conducted to describe the socioeconomic benefits resulting from higher education, such as the benefits from UHV. The 1998 study from the Institute for Higher Education Policy titled "Reaping the Benefits" and the March 2007 Perryman Group "A Tale of Two States And One Million Jobs!!, An Analysis of the Economic Benefits of Achieving the Future Goals of the Closing

the Gaps

Initiative

of

the

Texas

Higher

Education

Coordinating

Board"

document

the

most

significant

private and public economic and social benefits that result from higher education. The table below summarizes these types of benefits.

Details of this analysis are on the following pages, beginning with an introduction to this study.

Increased Charitable Giving/Community Service Improved Quality of Life for Offspring

Public Private

Economic

Increased Tax Revenues Higher Salaries and Benefits Greater Productivity Employment Increased Consumption Higher Savings Levels Increased Workforce Flexibility Improved Working Conditions Decreased Reliance on Government Financial Personal/Professional Mobility

Support

Increased Quality of Civic Life Better Consumer Decision Making Social Cohesion/Appreciation of Diversity Increased Personal Status Improved Ability to Adapt and Use Technology More Hobbies, Leisure Activities

Social

Reduced Crime Rates Improved Health/Life Expectancy

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Introduction

This report presents the results of an economic impact analysis performed by Impact DataSource, an Austin, Texas economic consulting and research firm. The purpose of the analysis was to determine the economic impact of the creation of a destination university as part of the conversion of the University of Houston Victoria from a two year upper level institution to a four year resident campus. In addition, this report addresses the social benefits to the region through the creation of a more highly educated workforce. This report represents a snapshot of the first 10 years of the Universitys expanded operation.

Construction of the initial campus is expected to be completed by 2015 a construction period of about one and three quarters years.

The economic impact of the University's expanded operations was projected for ten years, 2015 2024.

The analysis focused on determining following the impacts:

Construction of the required buildings for initial construction, The university's increase revenues and spending over the next 10 years, Increased enrollment over the next 10 years, and

A Report of the Projected Economic Impact of the University of Houston Victoria

Page 8

Increase acu ty require to serve stu ents over t e next 10 years.

In addition, some of the many socioeconomic benefits of higher education are discussed.

A description of the University and its proposed expansion is next.

Description of the University

About the University

The University of Houston Victoria currently serves junior, senior and graduate level students. In the

Beginning as an effort by local community leaders in the late 1960s to bring a higher learning institution to Victoria, legislation was passed in 1971 officially establishing an off campus learning center serving junior, senior

and graduate level students. In April of 1983, the University of Houston Victoria Center, as it was then known, was granted permanent degree granting status in the State of Texas. At the same time, the institution was renamed as the University of Houston Victoria, becoming a separate institution within the UH Systems family of campuses. Like other area Texas public colleges and universities, UHV operates under the jurisdiction of the Texas Higher Education Coordinating Board and is accredited through the Southern Association of Colleges and Schools.

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fall 2010, the University will accept freshmen for the first time. This change is due to legislationbeing passed and signed by Governor Perry in the most recent legislative session.

Space Projections

The space required by UHV in Victoria is shown below.

2009 10 2010 11 2011 12 2012 13 2013 14 2014 15

Teaching Space 8,889 23,266 39,576 54,662 68,962 94,554 Library Space 28,922 32,504 36,473 40,410 44,243 49,922 Research Space 2,529 3,480 4,556 5,600 6,584 8,231 Office Space 93,918 112,725 132,760 152,844 172,739 202,441 Support Space 12,083 15,478 19,203 22,816 26,328 31,963 Total Predicted Space 146,342 187,453 232,568 276,331 318,855 387,110

Current Space In Victoria 168,790 168,790 168,790 168,790 168,790 168,790

Space Required by UHV in Victoria

Coursework is also offered over the internet through distance education, and at two teaching centers: UHS Cinco Ranch and UHS Sugar Land. UHV now serves an expanded area of 15 counties, offering 33 Bachelors and Masters Degree Programs and has 3,658 students in the fall 2009. Of those 3,658 students, 503 are students

taking face

to

face

classes

in

Victoria.

Since

the

mid

1990s,

student

growth

from

Victoria

County

tapered

to

about 1.5% annual growth. All new enrollments have been, essentially, from the Katy/Sugar Land area or through online distance learning offerings.

Page 9

Current Deficit in Victoria 22,448 (18,663) (63,778) (107,541) (150,065) (218,320)

Estimated Headcount In Victoria 503 804 1,144 1,473 1,783 2,311 All Locations 3,658 4,140 4,652 5,171 5,689 6,420

2015 16 2016 17 2017 18 2018 19 2019 20

Teaching Space 112,190 129,504 146,635 163,322 177,138 Library Space 54,439 58,967 63,555 68,160 72,409 Research Space 9,425 10,598 11,768 12,918 13,908 Office Space 225,117 247,794 270,471 293,100 313,373 Support Space 36,105 40,218 44,319 48,375 51,915 Total Predicted Space 437,277 487,081 536,747 585,876 628,742

Current Space In Victoria 168,790 168,790 168,790 168,790 168,790 Current Deficit in Victoria (268,487) (318,291) (367,957) (417,086) (459,952)

Estimated Headcount In Victoria 2,686 3,056 3,422 3,780 4,084 All Locations 7,007 7,599 8,198 8,801 9,360

Source: UHV

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All space assumptions shown above were calculated by UHV based on the Texas Higher Education Coordinating Board's space prediction model of square footage.

Teaching space includes all rooms used for instruction; library space reading/study rooms, stack space, and associated service areas; research space all non class (research) laboratories and service rooms;office space all offices, conference rooms, and associated service areas; and support space all

data processing/computer

rooms,

shops,

storage,

vehicle

storage,

and

associated

service

areas.

Teaching space was calculated based on number of full time students in Victoria; library space on thevolumes of books, number of full time students served from Victoria, 50% of the number of full time students served from online, number of faculty, staff space needed, and additional library space needed; research space on the number of full time students served from Victoria and 50% of the number of full time students served from online; office space based on total student population served at all locations (staff serve all students from the Victoria location); and support staff on thetotal predicted teaching, library, research, and office space for Victoria.

To accommodate this projected growth an expansion campus is projected A discussion of the

construction of the initial expansion campus is next.

Construction of the Initial Expansion Campus

Size and Costs of the Constructing the Campus and Construction Period

The size and cost of the proposed expansion for the initial campus are shown below.

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Total square feet of academic space to be constructed 375,000 (based

on

2015

enrollment

needs)

Cost of proposed construction:Academic classrooms and offices $71,580,000Student housing (800 beds) to be paid for with private funding $32,000,000Total construction costs

Source: University of Houston Victoria

Types of Construction Impacts that the Expansion will Provide

The expansion will provide economic impacts from the construction activities. These impacts may becharacterized as direct, indirect and induced.

The direct economic impact during construction will come from the University's spending on construction and from construction workers and their salaries. From the direct construction spending and the spending

$103,580,000

Size and Cost of the Initial Campus

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of construction workers, indirect and induced benefits or spin off benefits will be created and supported in the region.

Indirect sales, jobs and salaries will be supported in businesses and organizations in the region, such aslumber companies, concrete companies, subcontractors, etc. that supply goods and services to the firmsconstructing the facilities. In addition, induced sales, jobs and salaries will be supported in businesses

or organizations

in

the

region,

such

as

restaurants,

gas

stations,

banks,

book

stores,

grocery

stores,

apartment complexes, convenience stores, computer stores, service companies, etc. that supply goodsand services to construction workers and their families and, in turn, to workers in indirect jobs and their families.

To estimate the indirect and induced economic impact of the construction activities on the Victoria area,regional economic multipliers were used. Regional economic multipliers for Texas and areas of the state are included in the US Department of Commerces Regional Input Output Modeling System (RIMS II).

Three types of regional economic multipliers were used in this analysis:

An output mul t plier, An employment mul t plier and An earnings mul t plier.

The multipliers show (1) the estimated sales or output in businesses or organizations in the region for eachdollar of spent on construction by the University, (2) the number of indirect and induced jobs created for every one direct construction job, and (3) the amount of salaries paid to these workers for every dollar to bepaid to a construction worker.

Page 11

The following indirect multipliers for construction activities were used in this analysis:

Output multiplier 0.5232 Employment multiplier 1.0569 Earnings multiplier 0.9453

Economic Impact of Construction Activities

The expansion construction activities will have a substantial economic impact on the economy of Victoria and Victoria County.

Contractors in the region will work on the project and they will hire workers and pay salaries. Plus, this activity will create spin off or indirect revenues, jobs and salaries in other businesses in the region. In total, the project's development and construction activities will have the impact on the region's economyeach year, as shown on the following page.

Indirect and InducedMultipliers Used in this Analysis

For Construction Activities

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Direct Indirect Total

Economic output or revenues for businesses in the region $103,580,000 $54,193,056 $157,773,056Average number of construction jobs to be supported each year 474 500 974Salaries to be paid to construction workers $41,432,000 $39,165,670 $80,597,670

As shown above, the University's construction activities will create $157.7 million in economic outputor revenues for businesses in the region, create and support an average of 974 jobs each year overthe construction period and create and support $80.5 million in salaries for workers in the region.

In addition to the economic impact from the construction activities, the economic activities createdby the expansion of the University operations, along with the permanent jobs that the University will fill,will also generate substantial economic impacts for the region. These economic impacts are discussed next.

Types of Impacts that the University's Expanded Operations as a Four Year Resident Campuswill Provide

Victoria and Victoria County will receive substantial economic benefits from the University's operations as a four year resident campus.

These economic impacts include the following:

Economic Impact from the Expansion's Construction Activities

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xpen ures o e n vers y an revenues or us nesses an o er organ za ons n e reg on, Taxable sales at the university,

Jobs, Worker salaries or personal income,

Local worker and student spending, and Visitor spending, and New residential and commercial property in the community to be added to local tax rolls.

As with construction impacts, these economic impacts may be characterized as direct, indirect and induced.

The direct economic impact will come from the operations of the University, its employees and staff and students. From the spending of the University, its employees and staff, and students, indirect and inducedbenefits or spin off benefits will be supported in the region.

Indirect sales, jobs and salaries will be supported in businesses and organizations in the region, such as air conditioning service firms, office supply firms, etc. that supply goods and services to the University. In addition, induced sales, jobs and salaries are supported in businesses or organizations in the region, suchas restaurants, gas stations, banks, book stores, grocery stores, apartment complexes, convenience stores,computer stores, service companies, etc. that supply goods and services to the Universitys employeesand staff and students and their families and, in turn, to workers in indirect jobs and their families.

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The following indirect multipliers for the University's operations were used in this analysis:

Output multiplier 1.6321 Employment multiplier 0.8993 Earnings multiplier 0.7559

The multipliers show (1) the estimated sales or output in businesses or organizations in the region for eachdollar of operating budget at the University, (2) the number of indirect and induced jobs created for every onedirect job at the University and (3) the amount of salaries paid to these workers for every dollar to be paid todirect job employee of the University and every dollar of financial assistance available to students at the University.

The economic impact of the University's expanded operations is discussed next.

Direct Impact of the Operations of the Expanded University

The proposed expansion campus expects to open in the third quarter of 2015.

Projected Operating Budget

Indirect and InducedMultipliers Used in this AnalysisFor Operations of the Expanded

University

Page 13

With the expansion, the University expects to have the following annual operating budget:

Year 1 2015 $53.1Year 2 2016 $64.4Year 3 2017 $75.0Year 4 2018 $84.9Year 5 2019 $98.6Year 6 2020 $109.8Year 7 2021 $122.4

Year 8 2022 $135.6Year 9 2023 $149.3Year 10 2024 $163.2

Total $1,056.3

The University's Projected Operating Budget(Shown in Millions of Dollars)

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Projected Faculty and Staff and Payroll

With the expansion, the University expects to have the following number of faculty and staff:

EstimatedAnnual Number of Payroll

Faculty and (In MillionsStaff of Dollars)

Year 1 2015 390 $20.8Year 2 2016 473 $26.7Year 3 2017 550 $32.8Year 4 2018 621 $39.2Year 5 2019 686 $46.0Year 6 2020 746 $53.0Year 7 2021 801 $60.3Year 8 2022 850 $68.0Year 9 2023 894 $76.1

Year 10 2024 933 $84.5

Total $507.4

Number of Faculty and Staff and Payroll(Shown in Millions of Dollars)

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Projected

Number

of

Students

Living

in

Victoria

and

Victoria

County

and

Enrolled

at

the

University

With the expansion, the University expects to have the following number of students living in Victoria and Victoria County and enrolled at the University:

Year 1 2015 2,311 Year 2 2016 2,686 Year 3 2017 3,056 Year 4 2018 3,422

Year 5 2019 3,780 Year 6 2020 4,084 Year 7 2021 4,412 Year 8 2022 4,766 Year 9 2023 5,148

Year 10 2024 5,562

Number of Students

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Projected Number of Out of Town Visitors to the University

With the expansion, the University expects to have the following number of out of town visitors to the campus for conferences, sporting events, and other events:

Year 1 2015 6,720 Year 2 2016 8,400 Year 3 2017 10,560 Year 4 2018 12,320 Year 5 2019 14,080 Year 6 2020 19,800 Year 7 2021 22,400 Year 8 2022 24,640 Year 9 2023 27,600

Year 10 2024 29,900

Projected Financial Aid Received by Students

With the expansion, students at the University will receive the following financial aid and revenues from other sources that the students could spend in the community:

Estimated Number of Out of Town Visitors to the

Campus

Page 15

Year 1 2015 $16.9Year 2 2016 $21.1Year 3 2017 $25.3Year 4 2018 $29.5Year 5 2019 $33.7Year 6 2020 $37.9Year 7 2021 $42.1Year 8 2022 $46.3Year 9 2023 $50.5

Year 10 2024 $54.7

Total $358.0

Estimated Student Aid Received by Students (Shown in

Millions of Dollars)

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The Direct, Indirect and Induced Economic Impact of the Operations of the Expanded University

As discussed above, the University will have a larger operating budget, more faculty and staff, and larger payrolls and more financial aid and other resources for students.

These expanded operations will generate the following direct and indirect economic activity in the region

over the

ten

years

of

the

expansion.

Jobs at theUniversity

When ExpansionCompleted

Direct 933Indirect and induced 839Total 1772

As shown above, the direct economic impact of the operations of the University over the first ten yearsfollowing the expansion will be $1.056 billion. This will include payments that the University will make for employee, faculty and staff salaries, purchases of goods and services and other expenditures. Thedirect spending by the University will generate another $1.724 billion in indirect sales or economic

$1,724

EconomicOutput

Economic Output, Jobs, and Annual Salaries and Student Financial AidSupported by the University Over First Ten Years Following the Expansion

(Shown in

Millions

of

Dollars) Financial Aid & Resources

$654,155,860$1,519,555,860$2,780

$1,056.3 $865,400,000

Salaries and Student

Page 16

ou pu n us nesses an organ za ons n e reg on. n o a , e econom c mpac o e operations of the University over the ten years following the expansion will be $2.78 billion.

While the University will employ 933 individuals, the Universitys spending during its operations will support another 839 jobs in the region. In total, the University's operations over the ten years of theexpansion will support 1,772 jobs in the region.

Similarly, while the salaries of the Universitys employees, staff and faculty, along with financial aid available students, will total $865 million over ten years, the Universitys spending will support another$654 million in salaries for workers in related spin off jobs supported in the region. Therefore, total salaries and financial aid supported by the University's operations over first ten years following the expansion will be $1.5 billion.

Taxable Spending Expected in the Region

The University's construction activities and its expanded operations will generate the taxable spendingin the region on which sales taxes will be collected by the City of Victoria and Victoria County.

Taxable Spending During Construction at the University

During construction, construction workers and workers in indirect and induced jobs will spend an estimated

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30% of their salaries on taxable goods and services. In addition, an estimated 60% of this taxable spending will be in Victoria.

Therefore, taxable spending in Victoria during the University's construction activities is shown below.

Direct and indirect construction salaries

Workers' taxable spending in Victoria

Total taxable spending in Victoria duringconstruction

Taxable Spending by Workers During the First Ten Years of the University's Expanded Operations

During the first ten years of the University's expanded operations, the University's direct workers and workers in indirect and induced jobs will spend an estimated 30% of their salaries on taxable goodsand services. In addition, an estimated 80% of this taxable spending will be in Victoria. This estimatedspending subject to the City and County's sales tax is shown below.

Taxable Spending in Victoria During Construction

$80,597,670

$14,507,581

$14,507,581

Taxable Direct and Indirect Workers' Spending in Victoriaand the Spending of Student Financial Aid and Resources

Page 17

u en o a u en sFinancial Aid Financial Aid and

and Resources

and

Workers' Workers'and Direct Indirect Direct and Taxable

Workers' Workers Indirect SpendingSalaries Salaries Salaries in Victoria

Year 1 2015 $37,700,000 $28,497,430 $66,197,430 $15,887,383Year 2 2016 $47,800,000 $36,132,020 $83,932,020 $20,143,685Year 3 2017 $58,100,000 $43,917,790 $102,017,790 $24,484,270Year 4 2018 $68,700,000 $51,930,330 $120,630,330 $28,951,279Year 5 2019 $79,700,000 $60,245,230 $139,945,230 $33,586,855Year 6 2020 $90,900,000 $68,711,310 $159,611,310 $38,306,714

Year 7 2021 $102,400,000 $77,404,160 $179,804,160 $43,152,998Year 8 2022 $114,300,000 $86,399,370 $200,699,370 $48,167,849Year 9 2023 $126,600,000 $95,696,940 $222,296,940 $53,351,266

Year 10 2024 $139,200,000 $105,221,280 $244,421,280 $58,661,107

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Taxable Spending by Out of Town Visitors During the University's Operations

During the University's operations, out of town visitors to the campus will spend money in Victoria eating out and shopping in the community. This estimated spending subject to the City and County's sales tax is shown below.

EstimatedTaxable Total

Estimated Spending Taxable Number of by Each Spending

Out of Out of Out of Town Town Town

Visitors Visitors Visitors

Year 1 2015 6,720 $65 $436,800Year 2 2016 8,400 $67 $562,380Year 3 2017 10,560 $69 $728,202Year 4 2018 12,320 $71 $875,056Year 5 2019 14,080 $73 $1,030,066Year 6 2020 19,800 $75 $1,491,986Year 7 2021 22,400 $78 $1,738,540Year 8 2022 24,640 $80 $1,969,766Year 9 2023 27,600 $82 $2,272,586

Year 10 2024 29,900 $85 $2,535,827

Taxable

Spending

by

Out

of

Town

Visitors

in

Victoria

Page 18

Total 176,420 $13,641,207

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Total Taxable Spending

From construction and from the University's first ten years of expanded operations, the following taxable spending will be generated in Victoria:

Sales in the Students andUniversity's Workers'Book Store, Spending Out of Town Total

From Cafeteria, in the Visitors' TaxableConstruction Etc. Area Spending Spending

Initial construction: $14,507,581 $14,507,581

Operations:Year 1 2015 $2,500,000 $15,887,383 $436,800 $18,824,183

Year 2 2016 $3,600,000 $20,143,685 $562,380 $24,306,065Year 3 2017 $4,200,000 $24,484,270 $728,202 $29,412,471Year 4 2018 $4,800,000 $28,951,279 $875,056 $34,626,335Year 5 2019 $5,400,000 $33,586,855 $1,030,066 $40,016,921Year 6 2020 $6,000,000 $38,306,714 $1,491,986 $45,798,700Year 7 2021 $6,600,000 $43,152,998 $1,738,540 $51,491,539Year 8 2022 $7,200,000 $48,167,849 $1,969,766 $57,337,615Year 9 2023 $7,800,000 $53,351,266 $2,272,586 $63,423,851

Total Taxable Spending in Victoria and Victoria County

From Operations

Page 19

ear 2024 , , , , , , , ,

Total $14,507,581 $56,500,000 $364,693,406 $13,641,207 $449,342,194

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Spending on Motel Rooms

During construction and during the University's operations the following amounts will be spent on motelrooms in Victoria:

EstimatedEstimated NumberNumber of Room Estimated Total

of Room Nights from Nightly Spending onNights During Out of Town Room MotelConstruction* Visitors* Rate Rooms

During Construction 3,889 $100 $194,434

Operations:

Year 1 2015 3,360 $100 $336,000Year 2 2016 4,200 $103 $432,600Year 3 2017 5,280 $106 $560,155Year 4 2018 6,160 $109 $673,120Year 5 2019 7,040 $113 $792,358Year 6 2020 9,900 $116 $1,147,681Year 7 2021 11,200 $119 $1,337,339Year 8 2022 12,320 $123 $1,515,205

Spending on Motel Rooms in Victoria to be Generated by the University

Page 20

ear , , ,Year 10 2024 14,950 $130 $1,950,636

Total 3,889 88,210 $10,687,671

* The estimated number of room nights above assumes double occupancy for motel guests.

Residential and Commercial Property to be Added to Local Tax Rolls

As a result of the University's expansion, new residential property will be constructed for some new directand indirect workers who move to the community and for new students. This property will be added tolocal tax rolls, along with new commercial property constructed in the region as a result of growth at

the University and new residents.

The expected growth in faculty and staff in the first year will be from 300 to 390.

Overall, over ten years, the University projects that about 443 University employees (70% of the 633new professional staff and faculty hired during this period) will move to the community to take a job at the university.

Further, an estimated 40% of new direct and indirect workers may move to Victoria. Also, about 60% of

Page 20


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new students not living on campus will be from outside the region.

New residential property will be built for many of these new students or require that new residential propertybe built for them. The estimated average taxable value of this new residential property in the first year will be $160,000 (with some single family and some multi family properties being built) with average annual increases in the value of new residential and commercial property of 3%.

Therefore, the following commercial and residential property will be added to local tax rolls each year:

TotalEstimated Value of

Value of Number of Value of New Retail and New New Residential

Commercial Residential Residential and CumulativeProperty Properties Properties Commercial Value of

to be to be Added to be Added Property NewAdded to to Tax to Tax Added to Property Tax Rolls Rolls Each Rolls Each Tax Rolls on Tax

Each Year Year Year Each Year Rolls

Year 1 2015 $7,033,477 68 $10,939,968 $17,973,445 $17,973,445Year 2 2016 $1,673,296 63 $10,391,754 $12,065,050 $30,038,495Year 3 2017 $1,654,080 58 $9,929,759 $11,583,839 $41,622,334Year 4 2018 $1,652,401 54 $9,430,692 $11,083,093 $52,705,427

Value of New Property Added to Local Tax Rolls Each Year

Page 21

Year 5 2019 1,667,699 49 8,892,744 10,560,443 63,265,870Year 6 2020 $1,643,446 46 $8,454,948 $10,098,393 $73,364,263

Year 7 2021 $1,636,729 42

$7,982,880 $9,619,609 $82,983,872

Year 8 2022 $1,646,990 37 $7,325,381 $8,972,371 $91,956,243Year 9 2023 $1,655,013 33 $6,775,230 $8,430,242 $100,386,485

Year 10 2024 $1,642,140 30 $6,185,477 $7,827,616 $108,214,101

Total $21,905,270 481 $86,308,831 $108,214,101

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Summary of the Economic Impact of the Operations of the Expanded University

In summary, the operations of a residential University will have the following economic impact onVictoria and Victoria County over the ten years of the expansion:

Number of new direct and indirect jobs to be created 1772Number of workers moving to the community 467Number of new residents in the region 1518Number of new students in public schools in the region 350Salaries to be paid to direct and indirect workersTaxable sales in the communityRoom nights at local motels 88,210 Lodging sales at local motels $11,158,831Residential property added to local tax rollsCommercial property, including retail, added to local tax rolls $21,905,270

$86,308,831

$449,342,194

Expanded

Operations

over

the

Ten

Years

Following

the

Expansion

$1,519,555,860

Summary of the Economic Impact of the University's

Page 22Page 22


23/38

Additional Revenues for the City, County, School District, Area Taxing Districts and the State

The economic impacts of the University's expansion from construction activities and from itsoperations translate into additional revenues for the City of Victoria, Victoria County, VictoriaIndependent School District, and other taxing districts in the region.

Tax Rates Used in this Analysis

Tax and other rates used to calculate these revenues are shown below.

Sales tax rates:

City of Victoria 1.5%Victoria County 0.5%State of Texas 6.25%

Total 8.25%

Property tax rates:

City of Victoria 0.6450Victoria County Navigation District 0.0306

Tax Rates Used in this Analysis

Page 23

c or a oun y oa an r ge .Victoria County 0.3436

Victoria ISD 1.3227Victoria College 0.1534

Victoria County Ground Water District 0.00955

City of Victoria hotel occupancy tax rate 7%

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The City of Victoria will receive the following additional revenues from sales, property and hotel occupancytaxes from the University during construction and over the first ten years of the expansion:

HotelSales Property Occupancy

Taxes Taxes Taxes Total

During construction $217,614 $13,610 $231,224

Operations:Year 1 2015 $282,363 $115,929 $23,520 $421,811Year 2 2016 $364,591 $193,748 $30,282 $588,621Year 3 2017 $441,187 $268,464 $39,211 $748,862Year 4 2018 $519,395 $339,950 $47,118 $906,463Year 5 2019 $600,254 $408,065 $55,465 $1,063,784Year 6 2020 $686,981 $473,199 $80,338 $1,240,518Year 7 2021 $772,373 $535,246 $93,614 $1,401,233Year 8 2022 $860,064 $593,118 $106,064 $1,559,246Year 9 2023 $951,358 $647,493 $122,370 $1,721,221

Year 10 2024 $1,043,954 $697,981 $136,545 $1,878,479

Total $6,740,133 $4,273,193 $748,137 $11,761,463

Additional Revenues for the City of Victoria

Page 24Page 24


25/38

Additional Revenues for Victoria County

Victoria County will receive the following additional revenues from sales and property taxes duringconstruction and ten years of the expansion from the University:

Sales PropertyTaxes Taxes Total

During construction $72,538 $72,538

Operations:Year 1 2015 $94,121 $61,757 $155,878Year 2 2016 $121,530 $103,212 $224,743Year 3 2017 $147,062 $143,014 $290,077Year 4 2018 $173,132 $181,096 $354,228Year 5 2019 $200,085 $217,382 $417,466Year 6 2020 $228,994 $252,080 $481,073Year 7 2021 $257,458 $285,133 $542,590Year 8 2022 $286,688 $315,962 $602,650Year 9 2023 $317,119 $344,928 $662,047

Year 10 2024 $347,985 $371,824 $719,808

Total $2,246,711 $2,276,386 $4,523,097

Additional Revenues for the Victoria County

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Additional Revenues for Other Local Taxing Districts

Other local taxing districts will receive the following property tax collections from additional residential and commercial property added to local tax rolls over the ten years of the expansion of theUniversity:

GroundNavigation Road and Victoria Victoria Water

District Bridge ISD College District Total

Property tax rate $0.0306 $0.055 $1.3227 $0.1534 $0.00955

Year 1 2015 $5,500 $9,885 $237,735 $27,571 $1,716 $282,408Year 2 2016 $9,192 $16,521 $397,319 $46,079 $2,869 $471,980Year 3 2017 $12,736 $22,892 $550,539 $63,849 $3,975 $653,991Year 4 2018 $16,128 $28,988 $697,135 $80,850 $5,033 $828,134Year 5 2019 $19,359 $34,796 $836,818 $97,050 $6,042 $994,065Year 6 2020 $22,449 $40,350 $970,389 $112,541 $7,006 $1,152,736Year 7 2021 $25,393 $45,641 $1,097,628 $127,297 $7,925 $1,303,884Year 8 2022 $28,139 $50,576 $1,216,305 $141,061 $8,782 $1,444,862Year 9 2023 $30,718 $55,213 $1,327,812 $153,993 $9,587 $1,577,323

Year 10 2024 $33,114 $59,518 $1,431,348 $166,000 $10,334 $1,700,314

Total $202,728 $364,381 $8,763,027 $1,016,291 $63,270 $10,409,697

Additional

Property

Tax

Collections

by

Other

Local

Taxing

Districts

Page 26Page 26


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Additional Sales Tax Collections for the State of Texas

The State of Texas will collect the following sales taxes as a result of the University's expansion over the ten years of its expansion:

During construction $906,724

Operations:

Year 1 2015 $1,176,511Year 2 2016 $1,519,129Year 3 2017 $1,838,279Year 4 2018 $2,164,146Year 5 2019 $2,501,058Year 6 2020 $2,862,419Year 7 2021 $3,218,221Year 8 2022 $3,583,601Year 9 2023 $3,963,991

Year 10 2024 $4,349,808

Total $28,083,887

Additional Sales Tax Collections for

the

State

of

Texas

Page 27Page 27


28/38

Total Revenues for All Local Taxing Districts and the State of Texas

In total, local taxing districts and the State of Texas will receive the following revenues from theUniversity from construction and over the ten years of its expansion:

City of Victoria: Sales taxes $6,740,133 Property taxes $4,273,193 Hotel occupancy taxes $748,137 Total $11,761,463Victoria County: Sales taxes $2,246,711 Property taxes $2,276,386 Total $4,523,097Victoria County Navigation District $202,728Victoria County Road and Bridge $364,381Victoria ISD $8,763,027Victoria College $1,016,291Victoria County Ground Water District $63,270

Total additional revenues for local taxing districts $26,694,257

Additional Revenues for Local Taxing Districts and the State During

Construction and over the First Ten Years of the Expansion

Page 28

State of Texas sales tax collections $28,083,887

Total revenues for the State and localtaxing districts

Return on Investment in Funding to Construct the Initial Campus at the University of Houston Victoria

What is the return on investment for the initial UHV campus?

The return on investment can be measured by comparing the cost of constructing the campus to

the increase in gross area product generated from the operations of the campus, the increase insalaries generated by the operations of the campus, the increase in taxable sales generated from the operations of the campus, the increase in residential property and commercial property addedto local tax rolls by the campus expansion, among others. The earnings of a higher educated areaworkforce and their spending would also greatly expand the return on this investment.

$54,778,144

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The returns on investment for ten years are shown below.

Initial investment to construct the campus:

State funds

to

construct

the

initial

campus $71,580,000Costs of student housing funded by outside sources $32,000,000

Total initial costs

Increases from the operations of the campus:Gross area product, in millions of dollars $2,780Taxable sales in the area, in millions of dollars $435Personal income including salaries of direct and indirect workers $1,520

and financial aid available to students, in millions of dollarsValue of residential and commercial property added to tax rolls, in millions of dollars $108Revenues for the state and local taxing districts, in millions of dollars $55

Number of direct and indirect jobs 1,772

Dollar returns for each dollar invested to construct the campus:

Gross area product $39Taxable sales in the area $6Personal income including salaries of direct and indirect workers $21

$103,580,000

Ten Year Returns on Initial Investment of Costs to Construct the Initial Campus

Page 29

an nanc a a ava a e o s u en sValue of residential and commercial property added to tax rolls $1.51

Revenues for

the

state

and

local

taxing

districts $0.77

A discussion of some to the many socioeconomic impacts of higher education and results of other studies of the benefits of higher education, such as provided by universities like UHV is next.

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Socioeconomic Benefits of Higher Education

Many studies have been conducted to describe the socioeconomic benefits resulting from higher education. The 1998 study from the Institute for Higher Education Policy titled "Reaping the Benefits"and the March 2007 Perryman Group "A Tale of Two States And One Million Jobs!!, An Analysis of the Economic Benefits of Achieving the Future Goals of the Closing the Gaps Initiative of the Texas

Higher Education

Coordinating

Board"

document

the

most

significant

private

and

public

economic

and

social benefits that result from higher education. The table below summarizes these benefits.

Some socioeconomic benefits are discussed next.

Social

Reduced Crime Rates Improved Health/Life Expectancy Increased Charitable Giving/Community Service Improved Quality of Life for Offspring Increased Quality of Civic Life Better Consumer Decision Making Social Cohesion/Appreciation of Diversity Increased Personal Status Improved Ability to Adapt and Use Technology More Hobbies, Leisure Activities

Public Private

Economic

Increased Tax Revenues Higher Salaries and Benefits Greater Productivity Employment Increased Consumption Higher Savings Levels Increased Workforce Flexibility Improved Working Conditions Decreased Reliance on Government Financial Personal/Professional Mobility

Support

Page 30

n v ua ene s o g er uca on

From the

individuals

perspective,

education

can

lead

to

notable

enhancement

in

quality

of

life

through such avenues as a broader world view, better health, greater civic involvement, and otherdifficult to measure improvements.

In addition to these benefits, the economic gains to individuals are substantial, such as the following:

There is a clear correlation between education level and income level, with many of the most financially rewarding occupations requiring college degrees.

There is also a negative relationship between education level and the likelihood of being unemployed.

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Education and Earnings

As education increases, individual earning potential rises. The average income for Texans, for example, with bachelors degrees was $59,557 in 2009, slightly higher than the national average. The difference in average earnings between persons with a bachelors degree and those with a high school diploma was $29,519, as shown below.

$20,002

$30,777 $38,174

$58,474

$82,491

$20,262

$30,038 $37,320

$59,557

$83,857

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

Less than high school graduate

High school graduate or equivalent

Some college or associates degree

Bachelor's degree Graduate or professional degree

Average Annual Earnings, Age 25+, by Educational Attainment

US Texas

Page 31

Earnings

Gap

Likely

to

Grow

Several trends are contributing to increasing differences in the average earnings of those with variouslevels of education.

The shift to a knowledge based economy emphasizing technology has increased the educational requirements of many industries.

A decrease in the relative importance of labor unions and high paying manufacturing jobs for thosewith low levels of education (partly a consequence of global competition) has further widened thegap between earnings for those with a high school diploma and those with some form of higher

educations

According to The Big Payoff: Educational Attainment and Synthetic Estimates of Work Life Earnings, US Census Bureau, US Department of Commerce, issued July 2002 and The Value of Higher Education: Individual and Societal Benefits (With Special Consideration for the State of Arizona), Arizona StateUniversity, School of Business Productive and Prosperity Project (P3), October 2005:

In the early 1980s, the average earnings of a fulltime male worker between the ages of 35 and 44 with a bachelors degree were 38% higher than one with a high school diploma. In the

$20,002

$30,777 $38,174

$58,474

$82,491

$20,262

$30,038 $37,320

$59,557

$83,857

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000





Average Annual Earnings, Age 25+, by Educational Attainment

US TexasSource: Current Population Survey , US Census 2009

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early 2000s, the difference had climbed to 94%.

Education and Unemployment Relationship

Education is also correlated with greater opportunity and the ability to maintain employment.

Nationally, 6.24%

of

adults

age

25

and

older

with

only

a

high

school

diploma

were

unemployed

in

2008 compared to only 3% of those with a bachelors degree. In Texas, for example, the difference was slightly less.

9.58%

6.24%

4.71%

2.99%

2.03%

6.00%

4.80%

3.76%

2.48%1.94%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

'

Unemployment, Age 25+, by Educational Attainment

Page 32

Societal Benefits of Higher Education

The benefits to society of higher education are undeniable and span a broad spectrum.

They include economic improvements that translate into greater opportunities for all citizens.

With higher education, the Texas workforce is more productive, and the state is more competitive

for future desirable corporate locations and other growth.

In addition, a more educated populace tends to require less social assistance. Lowerunemployment and higher earnings contribute to reducing the need for unemployment benefits and various social services programs. Higher education levels also translate into lower rates of incarceration.

Finally, there are other gains from increasing education levels, including enhanced volunteerism,more active participation in and support of public and philanthropic initiatives, better levels of

9.58%

6.24%

4.71%

2.99%

2.03%

6.00%

4.80%

3.76%

2.48%1.94%

0.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%





Unemployment, Age 25+, by Educational Attainment

US TexasSource: American Community Surveys , US Census 2008

Page 32


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community health, and a greater pace of discovery and innovation to sustain social and economic progress.

Increased Productivity and Capacity

Increased lifetime earnings of graduates are an indication of their enhanced contribution to the

economy. The

additional

compensation

can

only

occur

as

a

result

of

the

greater

value

added

createdby educated workers.

The improvement in the productivity and capacity of the individuals attending the institutions hasfar reaching economic benefits. The National Bureau of Economic Research estimated that a 10%increase in the average educational level of workers resulted in a 4.9% to 8.5% rise in productivityin manufacturing and 5.9% to 12.7% productivity improvement in non manufacturing industries asincluded in "Beyond the Incidence of Training: Evidence from a National Employers Survey", workingPaper No. 5231, National Bureau of Economic Research (Cambridge, Massachusetts), 1995, Appendix D.

Enhanced levels of academic research funding lead to important discoveries which are oftencommercialized into products and services that expand output and productivity in fundamental ways. This process ultimately increases the overall capacity of the economy to meet human needs.

Higher Tax Receipts

With higher earnings, the amount of taxes paid rises. In addition to the effect on income taxes, higher incomes translate into more spending for various goods and services subject to sales taxes and other

Page 33

c arges. roper y ax co ec ons are a so en ance as earn ngs are spen on ous ng an o er rea estate assets.

$436

$2,003

$3,488

$7,338

$11,162

$345 $1,608

$2,941

$7,411

$10,685

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000





Federal Tax Liability*, Age 25+, by Educational Attainment

US TexasSource: Current Population Survey , US Census 2009

* After tax credits are deducted

Source: Current Population Survey , US Census 2009

* After tax credits are deducted

Page 33


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Reduced Social Services Costs

Not only does higher education lead to individual improvement in quality of life, it can also translateinto social and economic gains through the reduction of social services costs and dependency on government provided assistance programs. In every state, a larger percentage of those with just high school diplomas report receiving public aid than those with bachelors degrees, according to "The

Investment Payoff:

A

50

State

Analysis

of

the

Public

and

Private

Benefits

of

Higher

Education,

Institutefor Higher Education Policy, February 2005.

Research by the Institute for Higher Education Policy suggests that a one percentage point increase in high school or higher education in the population leads to an approximately 4 percentage point decrease in welfare dependence and almost 2 percentage point decrease in poverty. The same study,Welfare and the Culture of Poverty, The CATO Journal 16(1), suggests that increased education also reduces unemployment. These findings are consistent with other academic research as well.

Statistics show that a large proportion of welfare recipients have low education levels, reducing their ability to find employment and decreasing their earning potential as included in Testimony of NOWLegal Defense and Education Fund on Welfare Reform: Success in Moving Toward Work, submitted to the US House 21st Century Competitiveness Subcommittee of the Education and the Workforce Committee, October 16, 2001.

Public Assistance and Education Level

As education level rises, the percentage of persons receiving public assistance falls.

Page 34

3.01%

1.59%

1.30%

0.46%0.32%

1.68%

1.06%

0.80%

0.26% 0.18%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

3.50%





Percent Receiving Public Assistance, Age 25+, by Educational Attainment

US TexasSource: American Community Surveys , US Census 2008

Page 34


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Incarceration Cost and Education Level

In general, locations with more educated populations have lower crime rates.

The chances of being incarcerated are much higher for persons with lower levels of education. According to one study, Education Pays 2004: The Benefits of Higher Education for Individuals and

Society, Trends

in

Higher

Education

Series,

College

Board,

Revised

Edition

2005,

2%

of

adults

who

had not finished high school were incarcerated, as were 1.2% of those with a high school diploma. By contrast, only 0.1% of those with college degrees were incarcerated.

Better Health

Health care costs are based on an individuals attitude about exercise and food as well as their abilityto obtain health insurance and cover medical expenses.

More education and the corresponding likelihood of a better paying job translates into a greater abilityto finance health care expenses. A larger proportion of people with bachelors degrees (93%) reportbeing in excellent, very good, or good health compared to those with just a high school diploma (82%),according to "The Investment Payoff : A 50 State Analysis of the Public and Private Bene ts of Higher Education, Institute for Higher Education Policy, February 2005. Also, see Mississippis Mandate: Why the Investment in Education Pays off in Mississippi, Institute for Higher Education Policy, May 2006.

Volunteerism and Citizenship

Page 35

On the most basic level, education can help instill civic values and acceptable norms for our society

contributing to

more

activism

and

social

cohesion

according

to

"Mississippis

Mandate:

Why

the

Investment in Education Pays off in Mississippi", Institute for Higher Education Policy, May 2006.

Some 38% of Texans with a bachelors degree reported volunteering in 2004, compared to 22% of thosewith high school diplomas "The Investment Payoff: A 50 State Analysis of the Public and Private Benefitsof Higher Education, Institute for Higher Education Policy, February 2005

Texans with a bachelors degree were also more likely to have voted in the 2000 presidential election(78% compared to 51% of those with a high school diploma).

More on Closing the Gaps Study

The Texas Higher Education Coordinating Board, which has the responsibility for overseeing manyaspects of college and university policy within the state, has been focused on the educational challenges of the economic and demographic realities confronting Texas for many years.

In an effort to develop a strategy for dealing with these issues, the THECB undertook a comprehensiveprogram to address the underlying patterns in college attendance and other relevant issues. As an outgrowth of this Closing the Gaps endeavor, specific goals related to the number of Texans

Page 35


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attending college and completing various programs by 2015 were developed. Similar objectives were established for federal research funding. These targets have subsequently been revised to reflect more recent patterns.

The Closing the Gaps initiative represents both (1) a well grounded and realistic assessment of theimportance of improving Texas higher education attendance, graduation rates, and research

participation and

(2)

measurable

milestones

to

achieve

the

needed

outcomes.

As discussed earlier, The March 2007 Perryman Group "A Tale of Two States And One Million Jobs!!, An Analysis of the Economic Benefits of Achieving the Future Goals of the Closing the Gaps Initiativeof the Texas Higher Education Coordinating Board" documents the benefits of closing the gaps by providing more funding for higher education in Texas.

Some of the economic and fiscal impacts in that study are discussed below.

Employment

By 2030, if the Closing the Gaps objectives are achieved, an additional 1,023,281 Texans will be employed relative to projected gains under a baseline scenario

Gross State

Product

Annual output (gross state product in constant (2006) dollars) could be expected to be some $194.5

Page 36

on o ars g er os ng e aps goa s are me an un er ase ne con ons. ver e entire analysis period (2006 2030), Texas enjoys cumulative net gains from this initiative of about $1.9

trillion.

Total Expenditures

Annual expenditures (a measure of all dollars changing hands in the economy would be nearly $489.6 billion higher (in constant 2006 dollars) by 2030 with successful implementation of Closing the Gaps.

Personal Income

Annual personal income in the state would be almost $122 billion higher by 2030 (in constant 2006 dollars) if the Closing the Gaps targets are reached.

Fiscal Impacts

of

Achieving

the

Goals

of

"Closing

the

Gaps

The economic benefits associated with a more educated workforce and greater research activity translate into fiscal gains for the State and local governments as well. This increase stems from gainsin production, income, sales, and other aggregates which stimulate tax collections as well as reduced

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public assistance social costs associated with the improved outcomes.

By 2030, the net annual fiscal gains arising from achieving the goals of Closing the Gaps include approximately $8.7 billion in State resources and $7.5 billion in local revenues (in constant 2006 dollars). Over the entire 2006 2030 period, the State sees an incremental net benefit of more than $85.3 billion, while local entities receive about $73.5 billion. These amounts are several times as large as the

estimated costs

of

this

initiative.

Over the implementation period through 2015, the cumulative State revenues are approximately equalto requisite outlays. Beyond that point, the State receives substantially more than is needed to maintain the patterns established by Closing the Gaps(much of the initial spending is for constructionof new facilities for the expanded enrollments). Over the entire 2006 2030 period, the State generates about $8.08 in revenues for every $1 in spending.

Social Returns

The social return on public spending is also extremely impressive. In 2015, the annual returns perdollar of State outlays include $11.92 in total expenditures, $4.77 in gross state product, and $3.02 in personal income. By 2030, these gains escalate to $46.36 in spending, $18.41 in output, and $11.54 in income.

In 2015, the annual gains per dollar of cumulative public (State and local) and private spending include $6.21 in total expenditures, $2.49 in gross state product, and $1.57 in personal income. By 2030, theannual payoff per dollar of cumulative outlays totals $24.15 in total expenditures, $9.60 in gross

Page 37

s a e pro uc , an . n persona ncome.

Conclusion

In conclusion, a residential / destination university has the potential to greatly improve the quality of life throughout the Victoria region. As stated in the report, a greater educated populous will help reduce per capita social costs related to crime, medical care and general poverty by better preparing individuals to earn high wages and, therefore, positioning them for greater success.

In addition to the individual benefits, a destination university in Victoria has the potential to bring tremendous economic benefits to all levels of business and government through increases in employment opportunities, expanded markets, and increasing tax base. Most notable is the

estimated $1.5 Billion of direct and indirect salaries created over the first 10 years through increasedemployment at the University and related spin off activity. The impact to local tax coffers of over $26 Million will greatly improve the financial position of local governments and help stabilize tax rate growth while providing new revenues to provide traditional and expanded services.

Finally, a destination campus has the potential to bring thousands of new students to the Victoria region, some of whom will choose to stay and become part of the educated workforce the area will need in order to stay competitive in a global environment.

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A discussion of the conduct of this analysis is next.

Conduct of this Analysis

Impact DataSource conducted this analysis using data, rates and information supplied by the University and

local taxing

districts.

In

addition,

Impact

DataSource

used

some

estimates

and

assumptions.

Impact DataSource is a 16 year old Austin economic consulting, research and analysis firm. The firm has conducted over 2,500 economic impact analyses of numerous projects in Texas and 26 other states. Inaddition, the firm has developed economic impact analysis computer programs for several clients, includingthe New Mexico Economic Development Department.

Some of the economic impact analyses conducted by the firm include those for the following collegesand universities:

Weatherford College, Weatherford, Texas,

Southwestern Baptist Theological Seminary, Fort Worth, Texas,

North Dakota State University, Fargo, ND,

Minnesota State University Moorhead, MN,

Concordia College, Moorhead, MN,

Del Mar College, Corpus Christi, Texas

Texas A&M University Central Texas, in Killeen Texas,

Santa Fe College, Santa Fe, New Mexico,

Navarro College Midlothian, Texas campus,

an nge o tate n vers ty, an nge o, exas,

Texas Christian University, Fort Worth, Texas,

East

Williamson

County

Higher

Education

Center,

Taylor,

Texas

(a

proposed

campus

housing

facilities and classes for three colleges),

Belhaven University, Jackson, Mississippi, and

Texas A&M University, Corpus Christi.

The firms principal, Jerry Walker, performed this economic impact analysis. He is an economist and has Bachelor of Science and Master of Business Administration degrees in accounting and economics from Nicholls State University, Thibodaux, Louisiana.

Destination University Economic Impact Report

Documents

Transcript of Destination University Economic Impact Report