Presenting the Socioeconomic Benefits of

Presenting the Socioeconomic Benefits of

Suffolk County Community College

Reports Produced by CCbenefits, Inc.

PowerPoint Presentation

Main Volume (98 pages)

Fact Sheet (1 page) Detailed Results (10 pages)

Executive Summary (6 pages)

Narrow & Broad Taxpayer Results (1 page)

Economic Region

Components of the Study

2. Investment Analysis

1. Regional Economic Development

Beginning with the Regional Analysis

Regional Economic Development

What we measure:

To this we add impacts associated with past students still active in the local workforce. Together, these measure the impact of the college relative to total earnings in the college service area.

We begin with the usual multiplier impacts due to college operations spending.

Colleges are similar to other local industries in

that they spend money and employ people. College

operations spending include direct earnings of

faculty and staff, as well as the indirect earnings due to

associated multiplier effects.

Colleges are similar to other local industries in

that they spend money and employ people. College

operations spending include direct earnings of

faculty and staff, as well as the indirect earnings due to

associated multiplier effects.

1. College Operations Spending

College Operations Spending

College Operations Spending

Direct earnings: SCCC employed 980 full-time and 1,712 part-time faculty and staff in FY 2003. This amounts to a total payroll of $101.0 million.

Indirect earnings: Faculty and staff wages and salaries

add $52.3 million worth of income as they are spent in

the local region.

In addition to college operations spending, we add the impacts (higher earnings) associated with

students who have obtained their education at our college and are still active in the local workforce.

In addition to college operations spending, we add the impacts (higher earnings) associated with

students who have obtained their education at our college and are still active in the local workforce.

2. Past-Student Productivity Effects


Past-Student Productivity Effects

Past-Student Productivity Effects

Direct Earnings: Past students contribute an estimated $527.8 million

worth of added income per year to the regional economy after leaving SCCC.

Indirect Earnings: The estimated multiplier effect of past student earnings in other industries increase

output by yet another $537.5 million.

Total Earnings in College Service Area

This comprises all of the earnings in the defined economic region. This provides the backdrop for expressing the

relative role of college operations spending and past student productivity effects in the local region.

This comprises all of the earnings in the defined economic region. This provides the backdrop for expressing the

relative role of college operations spending and past student productivity effects in the local region.

2. Past-Student Productivity Effects


3. Total Earnings in College Service Area

Total Earnings in College Service Area

The defined economic region generated $27.6 billion in total earnings in FY 2003.

Of this, the college operations spending and past student productivity

effects accounted for $1.2 billion, or 4.4% of all regional earnings.

To Summarize…

This comprises the total earnings in the defined economic region.

This comprises the total earnings in the defined economic region.

Earnings$1,000

% of Total

College Service Area $27,592,647 100%

To Summarize…

This is the salaries and wages of the college, expressed as a fraction of the region’s total earnings.

This is the salaries and wages of the college, expressed as a fraction of the region’s total earnings.

Direct Earnings: Faculty and Staff $101,003 0.4%

Earnings$1,000

% of Total


To Summarize…

The multiplier is the sum of direct and indirect earnings divided by direct

earnings.

The multiplier is the sum of direct and indirect earnings divided by direct

earnings.

Indirect earnings stem from the action of multiplier effects. They

occur as college salaries and operating expenditures ripple through the regional economy.

Indirect earnings stem from the action of multiplier effects. They

occur as college salaries and operating expenditures ripple through the regional economy.

Indirect earnings $52,294 0.2% 1.52


Earnings$1,000

% of Total


To Summarize…

We now add the direct earnings of past students still active in the local workforce. These students add

value because of the education they obtained while attending college.

We now add the direct earnings of past students still active in the local workforce. These students add

value because of the education they obtained while attending college.

Direct Earnings: Past Students $527,793 1.9%



Earnings$1,000

% of Total


To Summarize…

Next we add the earnings indirectly explained by the actions of past students in the local economy.

Next we add the earnings indirectly explained by the actions of past students in the local economy.

Indirect Earnings $537,484 1.9% 2.02




Earnings$1,000

% of Total


To Summarize…

The total shows the extent to which the activities of the college impact the regional economy.

The total shows the extent to which the activities of the college impact the regional economy.

Grand Total $1,218,573 4.4%




Earnings$1,000

% of Total


Indirect Earnings $537,484 1.9% 2.02

Investment Analysis

Continuing with the

Investment Analysis Component

The return to taxpayers for their support

• Broad taxpayer perspective • Narrow taxpayer perspective

The student benefits due to higher earnings

What we measure:

A broad collection of external social benefits

• Medical savings• Crime savings• Welfare and unemployment savings

This figure shows the present value of increased future earnings as a direct result of the students’ education.

This figure shows the present value of increased future earnings as a direct result of the students’ education.Student costs consist of the tuition paid by the students and, most

importantly, the opportunity cost of time (earnings foregone).

Student costs consist of the tuition paid by the students and, most importantly, the opportunity cost of time (earnings foregone).

Student Benefits

Higher earnings = $974.8 million

Student costs = $148.1 million

Benefit/Cost Ratio: The ratio of benefits over costs. A 1.5 ratio, for example, means that every dollar invested will return a cumulative

$1.50 to the investor over the time period analyzed.

Criterion for feasibility: The B/C ratio must be greater

than or equal to 1.

Benefit/Cost Ratio: 6.6

Student Benefits



Rate of Return: the average earning power of the money

used over the life of the investment. A 15% rate of return, for example, means that the revenues collected

over time will equal the costs, plus generate a 15% return.

Criterion for feasibility: the rate of return must exceed the returns from alternative uses

of the same money.

Rate of Return: 18.4%


Student Benefits



Payback Period: This is the length of time needed from

the beginning of the investment before the

cumulative future revenues return all of the investments

made.

Payback Period: 8.2 yrs

Rate of Return: 18.4%


Student Benefits



Student Benefits

Some Key Findings Achieving an Associate Degree from SCCC will increase earnings to $42,819

per year, or 35.1% more than the average high school graduate.

An Associate Degree graduate will earn $452,509 more than someone with a high school diploma or GED over his or

her future career.

Lifetime earnings will increase $6.58 for every dollar invested (tuition, fees,

books, and foregone earnings).

Social Benefits

The medical, crime and welfare/unemployment savings are avoided costs, i.e., the reduced burdens on employers and

taxpayers. These external social benefits are generated annually as the education level of the workforce increases.

The medical, crime and welfare/unemployment savings are avoided costs, i.e., the reduced burdens on employers and

taxpayers. These external social benefits are generated annually as the education level of the workforce increases.

$2.4 million

$4.2 million

$2.1 million

$8.7 million

Aggregate

.

Medical Savings

Crime Savings

Total

Welfare/Unemployment Savings

The broad perspective: State taxpayers invest, but

beneficiaries are widely dispersed (students, business

community, society). We count all of the benefits

regardless of to whom they accrue.

Return to Taxpayers

Taxpayers Costs = State Appropriations + Property Taxes

Taxpayer Benefits = Higher Earnings + Social Benefits

Broad Taxpayer Perspective


Here we only count the “book revenues”—the monies actually returning to the state treasury. For example, as students increase their earnings, the state collects more

sales, income, and property taxes.

Return to Taxpayers

Taxpayers Costs = State Appropriations + Property Taxes

Taxpayer Benefits = More Taxes Collected + Social Benefits

Narrow Taxpayer Perspective

Return to Taxpayers

Note that for a public investment, the typical expectation is that the

benefit/cost ratio be > 1 and that the rate of return be >

4%. As you can see, the results far exceed these

expectations.

Narrow Taxpayer Perspective

Payback Period:

Rate of Return:


17.0%

8.4 yrs

What does all this mean?

To Summarize…

IT PAY$ BACK:

IT PAY$ TO LEARN:

IT PAY$ TO INVEST:

The SCCC regional economy is measurably stronger

Taxpayers in the State of New York are measurably better off

The SCCC students are measurably better off

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Presenting the Socioeconomic Benefits of