Phil Castle, The Business Times
As Colorado Mesa University continues to grow, so do the effects of CMU on the Western Colorado economy.
The latest results of an economic impact study estimate the total direct and indirect effects of the university tops $417 million.
That total for the 2013-2014 fiscal year is nearly 16 percent more than the estimated $351 million CMU injected into the regional economy in FY 2011-2012 and almost 24 percent more than the estimated $317 contribution for FY 2009-2010.
“Obviously, we’re growing,” says Tim Foster, president of Colorado Mesa University.
Diane Schwenke, president and chief executive officer of the Grand Junction Area Chamber of Commerce, says the economic effects of CMU have grown over the years even as other sectors of the regional economy have varied through business cycles.
Kelly Flenniken, executive director of the Grand Junction Economic Partnership, says the university contributes to the economy in another way in educating the work force and attracting new businesses.
The analysis of the economic effects of CMU quantifies direct spending in five categories: the university, employees, students, visitors and capital. The analysis then uses a multiplier of 1.8 to calculate the effects of spending as money moves through the economy. Employee wages, for example, are spent again on housing, food, clothing and other goods as well as local taxes.
According to the analysis for the 2013-2014 fiscal year, student expenditures totaled $115.6 million and accounted for nearly half of total direct spending for CMU.
Foster said about 9,500 students are enrolled at CMU. The CMU financial aid office estimates that students spend on average $1,501 a month for room and board as well as transportation and entertainment. It’s estimated that about 90 percent of the money CMU students spend remains in Western Colorado.
University expenditures was the second largest category of direct spending at more than $33.6 million. The estimate was based on the myriad of products and services CMU purchases, including everything from office supplies to utilities. It was estimated that almost 82 percent of the money CMU spent on goods and services stayed in Western Colorado.
CMU made nearly $37.4 million in capital expenditures during the 2013-2014 fiscal year, including spending on such projects as a new residence hall and classroom building as well as upgrades to classrooms, laboratories and other facilities. Of that total, an estimated 86.2 percent — or $32.2 million — was spent in Western Colorado.
A $24.6 million project is now under way to expand and renovate the Tomlinson Library on the CMU campus.
Gross employee salaries and wages accounted for more than $39.1 million. After paying federal and state taxes and benefits, net wages totaled more than $29.2 million. It was estimated that 90 percent of that amount, or $25.1 million, was contributed to the Western Colorado economy.
Nearly $25.4 million in additional spending was attributed to visitors who come to Grand Junction to see students, attend athletic and entertainment events and participate in conferences. A total of almost 366,000 visitors were counted during FY 2013-2014. These visitors purchase food and fuel and also pay for lodging and entertainment. The analysis calculated that 25 percent of visitors — or about 91,000 individuals — came from outside the region and spent on average $129 a day. The remaining
75 percent of visitors spent on average $46 a day for meals and other expenses.
Multiplying almost $232 million in direct spending by 1.8 results in a total estimated economic impact of more than $417 million.
Schwenke said CMU constitutes a significant economic driver not only as a major employer, but also for bringing money into the local economy from outside the region.
The economic contributions from CMU have been steadily growing over the years even as contributions from other sectors have varied in the aftermath of the boom, bust and subsequent slow recovery, she said. “That has been a real godsend.”
There’s also the matter of how much money CMU retains in the Mesa County economy in providing a university for students to attend without leaving the community, Schwenke added.
Flenniken said the economic effects of CMU go beyond direct and indirect spending. The university also plays a key role in educating the work force as well as attracting new businesses to Mesa County.
In addition, CMU continues to work with local industry sectors and individual businesses in tailor programs to meet work force needs, Flenniken.
She cited as one example a program in which students can obtain mechanical engineering degrees from the University of Colorado while attending CMU.
David Ludlam, executive director of the West Slope Colorado Oil and Gas Association, said CMU prepares students to work in the energy industry while making an economic impact in the process. “The institution plays a dual role of diversifying our regional economy while at the same time helping position our future work force to be future contributors to Western Colorado’s prosperity.”
Foster wouldn’t predict what the numbers for economic effects will be when the next analysis is conducted in two years. But he expects the upward trend to continue. “Hopefully, we’ll continue to grow.”
Meanwhile, educating students remains the primary purpose of CMU, Foster said. “The significant impact CMU has on the economy in this region is a result of doing business. But the business we are in is educating people, and that remains our driving force. That we help stimulate the economy on the Western Slope is a bonus.”