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The Economic Impact of the Foothill-De Anza Community College District and its Students October 17, 2005 Kevin Stange Graduate Student Researcher Department of Economics University of California, Berkeley. Overview.

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Overview

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  1. The Economic Impact of the Foothill-De Anza Community College District and its Students October 17, 2005Kevin StangeGraduate Student Researcher Department of EconomicsUniversity of California, Berkeley

  2. Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us Overview • What is the aggregate impact of Foothill and De Anza Colleges on the local economy? • Spending by the District • Spending by students • Indirect and multiplier effects • Investment in workforce productivity • What is the effect of an additional local tax dollar spent at Foothill and De Anza Colleges? • Matching from other funding sources • Benefits: Indirect multiplier effects and workforce productivity effects

  3. Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us Overview • What is the aggregate impact of Foothill and De Anza Colleges on the local economy? • Spending by the District • Spending by students • Indirect and multiplier effects • Investment in workforce productivity • What is the effect of an additional local tax dollar spent at Foothill and De Anza Colleges? • Matching from other funding sources • Benefits: Indirect multiplier effects and workforce productivity effects

  4. Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us Foothill and De Anza Colleges contribute at least $800 million to the local economy every year Total Annual Impact of Foothill-De Anza CCD 2003-2004 Fiscal Year $ Millions

  5. Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us Foothill and De Anza Colleges spend $195 million on operations every year, primarily for employee compensation Direct Operating Expenses by Foothill-De Anza CCD 2003-2004 Fiscal Year Financial Aid to Students 4% • Goods and Services • Costs of goods sold • Materials & supplies • Operating expenses • Some capital outlay • Employee Compensation • Faculty • Staff • Students • Administrators 18% 77% Total Yearly Operating Expenditure: $195 million

  6. Total Annual Spending on All Recent Capital Projects, $ Millions Total Cumulative Spending on Major Recent Capital Projects, $ Dollars 20,281,819 Completed 03/04 Completed02/03 Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us Foothill and De Anza Colleges have completed numerous capital projects in the past few years – approximately $33 million of capital project spending annually

  7. Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us Foothill-De Anza Community College District is also a Major Local Employer • The District has approximately 3,000 full-time and part-time employees • Nearly half are faculty • Almost all live in or near the District • The District is Silicon Valley’s 20th largest employer • Comparable to Adobe Systems and Electronic Arts • Among colleges, behind only Stanford and San Jose State

  8. Full-Year (3 terms) Students Full-Time, Full-Year Cost 10,092 Full-Time, Full-Year* Students X + 35,701 Part-Time, Full-Year* Students 27,942 Full-Year FT and PT Students** * Equivalent to three quarters ** Counts part-time students 50% Total Student Spending: $99.9 million (FT only) $303. 3 million (FT and PT) Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us Foothill and De Anza students spend over $300 million in the local economy

  9. Spending by the District and its students generates more than $185 million indirect spending and more than 3,000 jobs Multipliers Spending by District $1.67 Total Spending $1 Direct Spending 20.8 Total Jobs $1million Direct Spending Spending by Students $1.59 Total Spending $1 Direct Spending 22.5 Total Jobs $1million Direct Spending X Total Indirect Spending: $149.5 million (District) $36.1 million (Students) Total Indirect Jobs: 1,943 jobs (District) 1,376 jobs (Students) Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us Direct Spending ($ millions)

  10. FHDA students earn more than 800,000 credit-hours per year Number of Unique Students 1958-59 to 2004-05 Academic Years Earned Credit Hours per Year 1958-59 to 2004-05 Academic Years = X Earned Credits per Student 1958-59 to 2004-05 Academic Years Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us

  11. Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us Mortality, migration, and labor force non-participation reduce credit accumulation in local workforce Migration and Mortality Labor Force Participation Fraction Moving From County over Five Year Period Fraction Surviving over Five Year Period Fraction Participating in Labor Force in San Jose MSA, 2000

  12. Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us More than 7 million college credit hours are actively employed in the local workforce Total Estimated Foothill-De Anza Credits Embedded In Local Population and Workforce Total Credits in Population, 2004 = 10,011,146 Total Credits in Workforce, 2004 = 7,062,040

  13. Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us Every forty-five college credits increase earnings by 6% Estimated $ Value of Each FHDA Credit Earned Average Earnings, 2000 Age Group $18.46 $28.53 $45.88 $53.23 $58.08 $63.97 $61.13 $62.82 $65.52 $50.51 $37.49

  14. Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us More than $350 million of earnings by local alumni can be attributed to Foothill and De Anza Colleges Age of Worker in 2004 Estimated $ Value of Embedded Credits ($ millions) Total Embedded Credits, 2004 $9.6 $29.1 $44.5 $47.5 $47.3 $52.2 $44.7 $37.1 $27.7 $9.4 $2.4 $1.0 $0.3 $0.2 7,062,040 total credits $352.8 million total earnings

  15. Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us Overview • What is the aggregate impact of Foothill and De Anza Colleges on the local economy? • Spending by the District • Spending by students • Indirect and multiplier effects • Investment in workforce productivity • What is the effect of an additional local tax dollar spent at Foothill and De Anza Colleges? • Matching from other funding sources • Benefits: Indirect multiplier effects and workforce productivity effects

  16. Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us Each $1 of property tax is matched by $0.95 of other funding Income Sources of Foothill-De Anza Community College District 2003-2004 Fiscal Year Other Local Sources 13% Tuition 9% Property Taxes 51% 22% 5% State Sources 5% Federal Sources

  17. Present Value of Costs and Benefits of Foothill-De Anza Investment 2003-2004 Academic Year Investment Benefits Indirect Spending (Multiplier Effect): $ 152,485,336 Present Value of Future Earnings Increase: $276,463,813 2005 2010 2015 2020 2025 2030 2035 Direct Spending: $227,590,053 Investment Costs Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us Each $1 of direct FHDA spending generates $1.88 of indirect spending and future earnings gains

  18. Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us Each $1 of property taxes generates $3.67 of total economic impact What are the effects of additional spending at FHDA? How far do local property taxes go? What is the effect of additional property tax spending? $1 Spending by Foothill-De Anza $1 Property Taxes $1 Property Taxes $0.67 Indirect Spending + $1.21 Alumni Earnings Increase = $1.88 Economic Impact $1.95 Total Spending by Foothill-De Anza $3.67 Economic Impact

  19. Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at 415-557-6569 or kevin_stange@ci.sf.ca.us Conclusions • Foothill and De Anza Colleges have a tremendous impact on Silicon Valley’s economy • Approximately $800 million of local income can be attributed to – directly and indirectly – the presence of Foothill and De Anza Colleges and their students • Numerous other benefits (e.g., improved health, reduced crime) are also present, but have not been quantified • The Colleges are an attractive investment for local taxpayers due to increased workforce productivity and induced indirect spending

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