Analysis confirms growing economic effects of Mesa State

MSC economic effects
From left, Ann Driggers, Tim Foster and Diane Schwenke discuss the results of the latest analysis that estimates the economic effects of Mesa State College in Western Colorado to total $317 million. (Business Times photo by Phil Castle)

The latest results of an ongoing analysis confirm the growing role of Mesa State College in the Western Colorado economy.

According to an analysis for the 2009 and 2010 fiscal years, the Grand Junction-based college injected $176 million into the economy through student expenditures, capital construction, purchases and employee wages. Add the indirect effects of that spending in the economy, and the estimated total exceeds $317 million.

The latest figure constitutes a 120 percent increase over the estimated economic contributions of Mesa State College for the 2007 and 2008 fiscal year and more than doubles the estimate for the 2003 and 2004 fiscal year.

Diane Schwenke, president and chief executive officer of the Grand Junction Area Chamber of Commerce, said the analysis puts numbers to what’s long been suspected. “Intellectually, we all know Mesa State is a massive economic driver in the Grand Valley.”

Ann Driggers, president and CEO of the Grand Junction Economic Partnership, said ongoing capital construction at the college has been a timely benefit in the aftermath of a recession. But over the long term, Mesa State provides additional benefits in educating a work force that attracts businesses to the area and earns higher incomes, she said.

Mesa State President Tim Foster said he expects the economic effects to continue to grow even as the college continues to expand facilities and academic programs en route to a goal of becoming one of the top institutions in Colorado. “That’s really the path we’re going to try and stay on.”

According to the analysis for the 2009 and 2010 fiscal years, nearly half the direct economic effects of Mesa State College is attributed to student expenditures for room, board, personal expenses, transportation and entertainment. Student enrollment topped 7,000 for the fall 2009 and spring 2010 semesters, while another 1,666 students were enrolled in summer courses. The average student monthly expenditure was estimated at $1,449.

Total student spending for the 2009 and 2010 fiscal year was estimated at more than $95 million. Assuming 90 percent of that money remained in the regional economy, students accounted for $85.7 million in economic effects.

Student enrollment continues to increase at Mesa State, topping 8,100 in the preliminary estimate for the fall 2010 semester. Nearly 70 percent of those students come from 14 counties in Western Colorado.

The second largest contributor to the economic effects of Mesa State was the $50 million in capital construction during the 2009 and 2010 fiscal year. That total included $17 million for the renovation of the student center, $13.3 million for the expansion of Wubben Hall and science center and nearly $5.7 million for the construction of a parking garage.

While the proportions differed on each of more than 40 projects, local contractors and vendors were awarded more than 90 percent of the funding on 15 projects and at least 70 percent of the funding on 23 projects.

Over the past five years, Mesa State has completed a construction and infrastructure improvement plan worth a combined $188 million.
Driggers said the ongoing expansion at the college has helped the economy, and the construction sector in particular, during the recession. “Significant construction has made a huge difference in our economy at a very rough time.”

Schwenke attributed the increasing economic effects of the college to construction as well as growing student enrollment.

Mesa State also contributes to the economy through the wages it pays employees — a total of $20.3 million in net wages during the 2009 and 2010 fiscal year. With 1,508 employees, the college is the third largest employer in the region behind Mesa County School District 51 and St. Mary’s Hospital.

Assuming college employees spend 90 percent of their wages in the region, their annual economic contribution exceeds $18.3 million.
Direct purchases of the variety of products and services used at Mesa State totaled more than $20 million during the 2009 and 2010 fiscal year, with more than $15 million of that spending in Western Colorado.

In addition, Mesa State draws visitors to the region each year for athletic events, performing arts and commencement exercises. The total economic effect of visitor expenditures totals nearly $7 million.

Along with the direct expenditures attributed to Mesa State, the overall economic contribution of the college also takes into account the indirect effects of spending in the economy. Employees spend their wages on housing, food and other needs. Businesses that provide goods and services to the college in turn pay wages to their employees and vendors.

Studies have pegged the so-called multiplier effect of the direct expenditures by universities and colleges at between 1.43 and 2.4. The Mesa State analysis uses a multiplier of 1.8. That means $176 million in direct economic effects multiplied by 1.8 results in a total of $317 million in direct and indirect effects.

In addition to the direct and indirect economic effects of Mesa State, the college also contributes to the education of a regional work force. Educated workers are needed to attract businesses to the area and tend to earn substantially higher incomes over the course of their careers.

Foster said the proportion of Western Colorado residents with at least a bachelor’s degree has increased from just under 21 percent in 1980 to about 33 percent in 2010. He attributed the gain to Mesa State.

The college offers degree programs in 72 majors and has expanded its graduate degree programs with a master’s of science in nursing and a doctor of nursing practice. The college also offers master’s degrees in business administration and education.

Foster said he’s especially excited about the potential for a cooperative program with the University of Colorado offering a bachelor’s degree in mechanical engineering.

The ultimate goal, though, Foster said, is for Mesa State College to join the top tier of educational institutions in Colorado along with CU and the Colorado School of Mines.

He expects progress toward that goal to continue on pace. “The moment we slow down, we lose ground.”