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MN State colleges and universities contribute $8B to MN economy, study says

State colleges and universities have a big impact on Minnesota’s economy, and the effect reaches far beyond campus, according to a study released by the Minnesota State system this week. An analysis conducted by consulting firm Parker Philips said Minnesota State colleges and universities contribute $8 billion a year to Minnesota’s economy. The analysis also said Minnesota State generates nearly $12 in the statewide economy for every dollar spent in state appropriations.

On a press conference call Wednesday, Noelle Hawton, chief marketing and communications officer for Minnesota State, said the study was the first economic contribution analysis done for Minnesota State since 2013.

“We have done these about every five years,” Hawton said. “It helps us tell our story,” she said, and provides data that Minnesota State and member colleges and universities can use in talking with the public or state legislators.

Minnesota State is a system including 30 colleges and seven universities around the state. Both Southwest Minnesota State University and Minnesota West Community and Technical College are part of Minnesota State.

In Wednesday’s conference call, Nichole Parker, principal partner of Parker Philips, gave an overview of the economic contribution analysis. In conducting the analysis, she said, Parker Philips looked at different levels at which spending at state colleges and universities affects the economy. There’s a direct effect, which includes spending by Minnesota State on daily operations, capital projects, pay and benefits, and student spending. But Parker said Minnesota State spending also has indirect effects on vendors and suppliers, and induced effects, like household spending by Minnesota State employees and students.

According to the analysis, Minnesota State generated an economic impact of $8 billion in 2017. That impact included a $4.1 billion direct effect, and a $3.9 billion indirect and induced effect.

Based on that impact, the analysis said $1 out of every $42 in Minnesota’s economy is supported by Minnesota State. Minnesota State also has an impact on jobs beyond its own employees, supporting a total of more than 67,000 jobs statewide.

The analysis said Minnesota State also had a total state and local tax impact of $458.5 million in 2017. That figure included $213.6 million in direct tax impact and $244.9 million in indirect and induced impact.

The analysis also estimated the economic impact created by increased income earned by Minnesota State graduates. Over a 40-year career, the study said, graduates would contribute $291.2 billion to the state’s economy.

The economic impact of the Minnesota State system was calculated using both federal and state data, Parker said. Parker cautioned that the analysis results were a “snapshot” of a point in time for the Minnesota State system — fiscal year 2017, in this case. Economic numbers can fluctuate from year to year, she said.

Hawton said the study cost Minnesota State $45,000. In addition, individual colleges and universities paid $4,500 each for individual reports. Parker Phillips prepared a total of 29 economic impact reports for individual colleges and universities in the Minnesota State System.

Reports on the Minnesota State economic contribution analysis, and on individual colleges and universities, can be found online at http://minnstate.edu/impact/.

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