Quite the impact
UI contributes $6 billion annually to Iowa economy, creates 1 in 30 jobs
The University of Iowa contributes $6 billion to Iowa’s economy annually, and every $1 in state appropriations to the university results in a greater than 1,500 percent return for Iowans.
The university also is one of the state’s top employers and is responsible for the creation of one of every 30 jobs in the state, or a total 51,818 jobs last year.
Those are the key findings of a comprehensive economic impact study produced by Pittsburgh-based research consultant firm Tripp Umbach and made public in late September 2010. The study examined the economic, employment, and state and local government revenue impact of UI operations as captured for the 2008–09 fiscal year.
More details, including a full copy of the study and information about the methodology used by Tripp Umbach, are available at www.uiowa.edu/impact.
"The University of Iowa's primary mission—and its most significant economic development contribution—has always been and continues to be providing a rich educational experience for students from Iowa and beyond," UI President Sally Mason says. "But it's gratifying to quantify the great extent to which the university contributes to the health and growth of Iowa's economy. This study tells us that—collectively and individually—our faculty, staff, students, vendors, and visitors generate billions of dollars through our operations, paid taxes, volunteerism, donations, and discoveries.”
Statewide expenditures by the University of Iowa and related constituencies totaled $2.6 billion in fiscal 2008-09. This includes direct expenditures for goods and services by the university, its employees, students, and visitors, which supported local businesses and in turn employed local individuals to sell the goods and provide the services that university constituencies needed.
When combined with $3.4 billion in indirect spending within Iowa—the re-spending within the state by businesses and individuals that received direct expenditures—the university’s overall economic impact reaches $6 billion. This means that $1 out of every $30 in the Iowa economy is generated by the University of Iowa.
The study also illustrates that when combining how the University of Iowa directly and indirectly contributes back to the state each year, the university contributes more to the state than it receives from the state. Although the university is exempt from state taxes, employees pay income tax, sales tax, and other local taxes such as real estate property taxes. The presence of the university and its spending also generates significant indirect taxes paid by companies who receive payments from the university.
As a result, state and local government revenues attributable to the presence of the University of Iowa totaled $486.9 million in fiscal 2008-09. This equates to $1.28 in tax revenue returned to state and local governments for every $1 dollar in state appropriations.“On a relative basis, the University of Iowa is the most important driver of its state's economy among other universities we have studied,” says Paul O. Umbach, CEO and founder of Tripp Umbach.