College Spending Fuels Local Economic Engine
Just how much does SUNY Cortland add to the local economy? The College generated more than $251 million in estimated economic activity during the 2011-12 fiscal year.
That’s enough to buy 21 different National Hockey League franchises.
Or more than half a million brand new Apple iPads.
Or more than a billion chicken wings from Central City Bar and Grill in Cortland during the restaurant’s weekly Wing Night.
The College’s estimated impact was recently published in “The Economic Impact of SUNY Cortland on the Central New York Regional Economy,” a study led by Kathleen Burke, a professor of economics. Her work was based on survey responses from SUNY Cortland students and employees as well as data related to the College’s spending. Two surveys were conducted — one that was distributed to students in randomly selected courses and an online questionnaire that received responses from 258 faculty and staff members.
“We’re the driving economic force for the area,” Burke said, noting that SUNY Cortland is the largest employer in Cortland County.
The College’s expenditures, its employees and its students accounted for more than $135 million in direct spending for the year. As those dollars circulated across the region, they led to more than $251 million in economic activity in Broome, Cayuga, Cortland, Onondaga and Tompkins counties, according to the study.
The estimate, based on a U.S. Bureau of Economic Analysis multiplier, takes into account the number of times dollars are re-spent in the local economy, Burke said. For example, if a student spends money at a restaurant in downtown Cortland, the restaurant will probably use some of that cash to pay workers’ wages. Those workers, in turn, might spend their wages at a different store in Cortland, starting the cycle over again.
“That dollar travels through the economy,” Burke said. “And because of that initial amount of spending, businesses are able to increase their labor.”
Spending from SUNY Cortland students totaled $46.3 million in 2011-12 and generated an impact of $85.8 million. Students accounted for 34.1 percent of the College’s expenditures, followed by employees (26.7 percent) and construction. (17.7 percent).
Burke said the importance of student spending is one of the survey’s major takeaway points.
“The College is here for the students,” Burke said. “And students’ spending in the community is the reason the community is what it is.”
The survey tracked monthly expenditures of students and employees in a variety of ways. It compared the spending habits of students who live on campus to those who reside off campus and found that nearly 70 percent of an off-campus student’s money is allocated towards rent, food and other utilities. Taxes and utilities constitute the highest percentage of employee spending (32 percent) followed by rent or mortgage payments (23 percent) and food (16 percent).
Sixty percent of the College’s employees reported that they would not live in the area if they did not work at SUNY Cortland. Further, based on average housing prices and property tax assessments, Cortland County would stand to lose roughly $1.3 million in county, city and school taxes from the 81 percent of employees who own homes in the area.
Other survey findings include:
• After students and employees — the College’s two biggest spenders — SUNY Cortland itself invested $24 million in construction, which created an economic impact of $44.4 million.
• The College also spent an additional $16.8 million on items other than personnel, in addition to $2.2 million by Auxiliary Services Corporation and $527,394 by the Student Government Association.
• Visitors of SUNY Cortland employees and students infused $5.2 million into the local economy during the year, resulting in $9.7 million in economic activity.
• The College’s utilities expenditures, at $3.7 million, actually decreased from 2008, the last time Burke conducted the survey. “That’s due to the College’s conscious effort to reduce energy usage,” Burke said.
It took nearly the entire 2011-12 academic year to compile the information in the 10-page report, Burke said. Wendy Miller, an assistant professor of geography at the College, provided geographic information systems assistance while Timothy Mabbett ’12 and Caitlin Visker ’12, two business economics majors, offered research help as part of a three-credit research experience course.
“It was a teachable moment and they were excellent,” Burke said.
She praised Jon Elle Baskin-Kelley, the controller for Auxiliary Services Corporation; Juanita Larrabee, the manager of contracts and compliance in the Facilities Planning, Design and Construction Office; Virginia Levine, the executive assistant to the College president; Jody Maroney, the budget officer in the Business Office; and Mary K. Murphy, the associate vice president for finance, for their assistance in gathering information.
The College President’s Office, the Institutional Research and Assessment Office, the Human Resources Office and the Business Office also provided assistance.