Phil Castle, The Business Times
Tim Foster appreciates the numbers that quantify the growing economic affects of Colorado Mesa University. But he considers other measures important, too, including the growing number of students who attend and graduate from CMU.
“It’s just really a boon having kids coming out of this institution,” said Foster, president of CMU. “These are some smart and well-educated people.”
One thing has everything to do with the other, Foster said. Higher enrollment leads to more faculty, staff and facilities and, in turn, direct and indirect spending that for the 2015 and 2016 fiscal year was estimated to total $447.5 million.
What that figure doesn’t take into account is the value of workforce development or other effects of CMU in promoting economic development, said Diane Schwenke, president and chief executive officer of the Grand Junction Area Chamber of Commerce. “It goes beyond the numbers. Their value to us is so much more than that.”
Kristi Pollard, executive director of the Grand Junction Economic Partnership, said CMU also constitutes an attractive factor in recruiting businesses to the Grand Valley. “It’s a big deal and we lead with it.”
CMU conducts a regional impact study every two years to analyze the effects of the university on the Western Colorado economy. The total estimated effect of $447.5 million constitutes a 7.3 percent increase over the estimated $417 million CMU injected into the economy during the 2013-2014 fiscal year.
The study quantifies direct spending in five categories: the university, employees, students, visitors and capital projects. The analysis then uses a multipflier of 1.8 to calculate the effects of spending as money moves through the economy. Employee wages, for example, are spent on housing, food and other goods as well as local taxes.
For the 2015-2016 fiscal year, CMU purchased more than $42 million worth of goods and services, nearly $34 million of that in Western Colorado.
CMU spent another $43.1 million in employee salaries. Taking out taxes, benefits and other adjustments, net wages totaled $30.2 million. Assuming that about 90 percent of wages are spent in the region, employee spending topped $27.2 million.
Student expenditures totaled nearly $126 million, accounting for the single largest component of the economic effects of CMU. That calculation takes into account student enrollment multiplied by an average monthly student expenditure of $1,498 for housing, food, transportation, entertainment and other personal items. Assuming 90 percent of it remains in Western Colorado, student spending accounted for nearly $113.4 million.
Almost $37.4 million in additional spending was attributed to visitors to CMU who come to Grand Junction for athletic and cultural events, conferences and other activities. A total of 464,600 visitors were counted during the 2015-2016 fiscal year. It’s estimated about a third of visitors came from outside the region and spent an average of $140 for at least one day.
CMU made nearly $42 million in capital expenditures during the 2015-2016 fiscal year. Of that, almost $37 million was spent in Western Colorado.
Direct spending in the five categories came to $248.6 million. Multiplying that total by 1.8 resulted in a total estimated economic effect of $447.5 million.
Pollard said she expected the latest study to show the collective economic effects of CMU had increased, but was impressed nonetheless. “This really puts an exclamation point in that the numbers are profound.”
But CMU asserts economic effects in other ways, Pollard said, in providing the education and other resources that attract businesses as well as promoting economic development through the involvement of the university in the Rural Jump-Start Program, Maverick Innovation Center and engineering degree programs.
Schwenke said it’s difficult to compare the economic effects of CMU with industry sectors because of the broader reach of the university. “Obviously, it is a huge driver because it crosses over so many sectors.”
Moreover, CMU has continued to grow over the years even as many industry sectors have gone through the ups and downs of business cycles, she said.
Although it’s not quantified in the study, one of the chief economic effects of CMU is its role in work force development, Schwenke said. “CMU is in the work force development business.”
Foster said CMU has long been committed to helping the community. That includes promoting a strong economy in which graduates can find jobs. “We want to see a community that’s growing and thriving.”