Study: NIC has big impact - Coeur d'Alene Press: Local News

Study: NIC has big impact

EMSI shows college responsible for $164.6 million in region's economy

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Posted: Thursday, September 27, 2012 12:00 am

COEUR d'ALENE - What if North Idaho College didn't exist?

A recent economic impact study shows there would be a $164.6 million hole in the region's economy.

Conducted by EMSI (Economic Modeling Specialists, Intl.), the results of the study were presented to trustees Wednesday during their regular monthly meeting.

"This is a really important study to undertake because, especially in our current economy, education is perceived as a budget item, a cost item, and not an investment," said Gabriel Rench, a representative of the Moscow-based EMSI.

EMSI analyzed NIC's investment value to students and taxpayers and also reviewed the college's effect on the economic growth of Idaho's five northern regions.

"The real impact that you're having is that you're producing an educated workforce that goes out and is more productive than it otherwise would be," said Tim Nadreau, an EMSI research economist.

The study was requested by NIC's administration at a cost of $8,500, said Mark Browning, the college's vice president of community relations and marketing. It will be used to illustrate NIC's value to community members, legislators and policy makers.

Nadreau said EMSI is not an advocacy group, that it has published results that are "below threshold."

"If there is a college that is a bad investment, we're not shy about saying so," he said. "We come at this almost like a financial auditor would come at your books. We're doing an economic audit of your operations."

For students, the annual cost of NIC is $95.4 million. That includes books, tuition and other outlays, and considers the dollars students are giving up to sit in a classroom rather than out making money. The benefit for students is $341.4 million, a cost/benefit ratio of 3.6 for a year or learning, reflecting a 16.1 percent annual rate of return on investment.

For students, the 3.6 ratio means that for every dollar a student spends on education at NIC, that student gets back $3.60.

"That 16.1 percent is a better return than you're going to get on most of your private investments. It's very rare that you're going to get something that high, so the students are really making a killer deal here," Nadreau said.

For taxpayers, EMSI determined NIC costs $30.4 million per year to operate and returns $44.3 million to the economy, reflecting a 1.5 benefit/cost ratio, a 5.8 percent return on investment.

The return for taxpayers comes from a broadening of the tax base, Nadreau explained, because more educated earners are higher paid and they pay more taxes.

There is also a social savings, he said. Higher educated individuals are less likely to engage in crime and other behaviors with health and legal consequences that translate into higher costs for taxpayers.

It's rare for public investments to have a return this high, Nadreau said.

"Essentially, we're saying that for every dollar taken out of the public treasuries (for NIC), we're putting $1.50 back in. That's 50 cents more than the state had to invest in infrastructure. That's 50 cents on the dollar more that they have to invest in other types of public endeavors," he said.

From NIC's operational expenses, the local economy garners $32.9 million annually.

Nadreau said that number reflects jobs that are out there because of NIC.

Students who relocate to Idaho's five northern counties to attend NIC pump $19.2 million into the region's economy. They do this by paying rent, buying food and paying for entertainment, he said.

The community college's total impact on North Idaho is $164.6 million. It represents 2.7 percent of the total regional economy.

"With colleges that are below threshold, these meetings are not very fun. When a college can come in and shine the way NIC has done here, it's a big win for you guys and it's nice to see that my home state is doing its job well and not misappropriating the funds that it receives. It's good to see competent people in Idaho," Nadreau said.

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7 comments:

  • IdahoRyan posted at 12:25 pm on Sun, Sep 30, 2012.

    IdahoRyan Posts: 1

    ...State funding has significantly decreased to NIC, leaving the burden gap with the taxpayers and students. All of the budget info is available to the public for anyone to access. If you take the time to look you can educate yourself to answer your own questions.

     
  • my own opinion posted at 11:59 am on Sun, Sep 30, 2012.

    my own opinion Posts: 397

    Maybe all the defaulted student loans? It can cost a lot to go to school and if one can not find a job, that can lead to a default on the student loan that is forever collectable by all means including IRS refunds. Scary so go to school and enjoy your local collage and go to work ASAP and always pay back the school. It is expensive try pell grants.

     
  • local res posted at 6:06 pm on Thu, Sep 27, 2012.

    local res Posts: 1165

    One thing I dont quite understand is the need for additional funding at NIC. If the student population has increased every year since 2010 and the student receiving an increase in tuition, why has my taxes increased to support the college. The size of the building has not changed only thing that has changed is the number of students filling the class room. Why the increase in student fees and residents taxes?

    One cost not included in the study was the loss of public trust.

     
  • 3Cheers posted at 10:22 am on Thu, Sep 27, 2012.

    3Cheers Posts: 478

    Figures don't lie, liars do figure. When it comes to this study, it's garbage in, garbage out.

     
  • Bob Loblaw posted at 8:18 am on Thu, Sep 27, 2012.

    Bob Loblaw Posts: 413

    Community Colleges are one taxpayer-funded service that are actually a good deal. I'm surprised that more people don't take advantage of it. That being said, do we really need a "study" to change our perception of it? I can't believe it only cost $8500 for this piece of public relations propaganda - the "experts" must be having a hard time, too. Calculating lost earnings of students into the "study" is a stretch. There have to be theoretical jobs that are not being filled by others while they are sitting at their desks for this to be of any relevance. This "study" is nothing more than a guess. Why not have some economics students do it as a class project - they might actually learn something.

     
  • crust123 posted at 7:21 am on Thu, Sep 27, 2012.

    crust123 Posts: 217

    I m sorry, but this article and the STUDY especially are a complete crock... Typical waste of tax dollars, although fortunately this time it was ONLY $8,500. What exactly is the point of this study? to tell us what the financial impact of NIC is? are we considering terminating the college, i think not. So then why a useless study. Oh, purely for public relations and dramatic affect. Again, what a waste of taxpayer dollars. I would love to see the math where they compute a 16.1% annual rate of return for students, particularly those that are unemployed. I would love to see the computation of the $165 million return to the economy. Is that before or after the property tax effect to county residents? The college is fine, although the board of trustees is way too entrenched in their ways, and too wasteful, (ie the purchase of the mill land at inflated value), but why the need for another public relations study??

     
  • Flash Gordon posted at 7:17 am on Thu, Sep 27, 2012.

    Flash Gordon Posts: 1647

    The conclusion of this article is readily evident to anyone who has any common sense. This article just quantifies what we already know.

    Any community throughout this country that has a college/community college in their midst has a "heads up" on any community that doesn't. We're fortunate in that regard. North Idaho College "is" tax payers money well spent no matter the griping and sniping that takes place among those that always gripe and snipe:) That's why the board election is always so.....political, this November being no different. To whoever gets elected to the board, just don't mess things up!!!!!

     
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