How big an economic boon are Iowa's public universities? Report claims $12 billion impact

Iowa's public universities added $11.8 billion to the state economy two school years ago, according to a November Board of Regents report that suggests state lawmakers get a lot of bang for their buck when they fund higher education. 

The analysts who came to this $11.8 billion figure considered the employees on the universities' payroll, the cost of day-to-day operations, and the ripple effect this spending has. The estimated net impact of the universities is akin to 6.2% of the total gross state product.

Report authors frame the total impact in terms of jobs; 149,980 jobs are supported by the three public universities — Iowa, Iowa State and Northern Iowa — in one way or another. 

"For perspective, this means that one out of every 14 jobs in Iowa is supported by the activities of the universities and their students," the report notes.

The report comes at a time when the regents and public universities have expressed concerns about diminishing state funding. After a mid-year budget cut during the 2017-2018 school year and lower-than-expected appropriation levels last year, regents expect to raise tuition in the coming years to make up for what University of Iowa President Bruce Harreld has referred to as a "generational disinvestment" in higher education in Iowa.

According to the report, created by the Idaho labor market analytics firm Emsi, analysts considered that state dollars appropriated to the universities might otherwise be spent elsewhere.

"This spending would have created impacts regardless," the report reads. "We account for this by estimating the impacts that would have been created from the alternative spending and subtracting the alternative impacts from the spending impacts of Iowa’s regent universities."

Emsi's calculations take into account spending on construction, UI Hospital and Clinics, research, and visitor and student spending. The firm said the largest economic impact two years ago came from alumni, who brought in an additional $6.2 billion during the 2017-2018 school year.

In attempting to add up the alumni pool's "knowledge, creativity, imagination, and entrepreneurship" that benefits Iowans, analysts considered that a degree enables a person to earn more money.

Emsi said those who earn degrees have a ripple effect throughout the Iowa economy. The skills learned in college allow former students to be more productive; they get more out of different forms of capital, like equipment and facilities; companies profit more because of the skills they gained.

The report was welcomed by the board at its November meeting. Regent David Barker praised the conservative approach to calculating the total impact, and regent Nancy Boettger encouraged the group to use the report as a way to communicate the positive impact Iowa's public universities have on the state.

"I think this is a message we really need to get out to the public much more than we ever have," Boettger said. "I think this broad impact that the universities have, the everyday person on the street doesn't even think about this at all. I think it's really important that we get this out to the legislature, to the public in general at all of our opportunities."