Economic Impact Summary
The Economic Value of BCTC
Bluegrass Community and Technical College (BCTC) creates a significant positive impact on the business community and generates a return on investment to its major stakeholder groups-students, taxpayers, and society. Using a two-pronged approach that involves an economic impact analysis and an investment analysis, this study calculates the benefits received by each of these groups. Results of the analysis reflect fiscal year (FY) 2018-19.
Economic impact analysis
In FY 2018-19, BCTC added $419.1 million in income to the Bluegrass Region* economy, a value approximately equal to 1.2% of the region's total gross regional product (GRP). Expressed in terms of jobs, BCTC's impact supported 6,516 jobs. For perspective, the activities of BCTC and its students support one out of every 75 jobs in the Bluegrass Region.
OPERATIONS SPENDING IMPACT
- BCTC employed 1,026 full-time and part-time faculty and staff. Payroll amounted to $33.2 million, much of which was spent in the region for groceries, mortgage and rent payments, dining out, and other household expenses. The college spent another $22.7 million on day-to-day expenses related to facilities, supplies, and professional services.
- The net impact of the college's operations spending added $44.9 million in income to the regional economy in FY 2018-19.
CONSTRUCTION SPENDING IMPACT
- BCTC invests in construction each year to maintain its facilities, create additional capacities, and meet its growing educational demands, generating a short-term infusion of spending and jobs in the regional economy.
- The net impact of BCTC's construction spending in FY 2018-19 was $1.5 million in added income for the Bluegrass Region.
STUDENT SPENDING IMPACT
- Around 24% of credit students attending BCTC originated from outside the region. Some of these students relocated to the Bluegrass Region. In addition, some in-region students, referred to as retained students, would have left the Bluegrass Region for other educational opportunities if not for BCTC. These relocated and retained students spent money on groceries, mortgage and rent payments, and other living expenses at regional businesses.
- The expenditures of relocated and retained students in FY 2018-19 added $8.1 million in income to the Bluegrass Region economy.
* For the purposes of this analysis, the Bluegrass Region is comprised of Anderson, Boyle, Clark, Estill, Fayette, Franklin, Garrard, Jessamine, Lincoln, Madison, Mercer, Powell, Scott, and Woodford Counties.
- Over the years, students have studied at BCTC and entered or re-entered the workforce with newly-acquired knowledge and skills. Today, thousands of these former students are employed in the Bluegrass Region.
- The net impact of BCTC's former students currently employed in the regional workforce amounted to $364.6 million in added income in FY 2018-19.
- BCTC's FY 2018-19 students paid a present value of $22.6 million to cover the cost of tuition, fees, supplies, and interest on student loans. They also forwent $46 million in money that they would have earned had they been working instead of attending college.
- In return for their investment, students will receive $442 million in increased earnings over their working lives. This translates to a return of $6.40 in higher future earnings for every dollar students invest in their education. Students' average annual rate of return is 22.6%.
- Taxpayers provided BCTC with $19.3 million of funding in FY 2018-19 (excluding state allocations recovered by KCTCS). In return, they will benefit from added tax revenue, stemming from students' higher lifetime earnings and increased business output, amounting to $145.7 million. Reduced demand for government-funded services in Kentucky will add another $11.1 million in benefits to taxpayers.
- For every dollar of public money invested in BCTC, taxpayers will receive $8.10 in return, over the course of students' working lives. The average annual rate of return for taxpayers is 19.7%.
- In FY 2018-19, Kentucky invested $113.1 million to support BCTC. In turn, the Kentucky economy will grow by $1.5 billion, over the course of students' working lives. Society will also benefit from $45.1 million of public and private sector savings.
- For every dollar invested in BCTC in FY 2018-19, people in Kentucky will receive $13.60 in return, for as long as BCTC's FY 2018-19 students remain active in the state workforce.
About the study
Data and assumptions used in the study are based on several sources, including the FY 2018-19 academic and financial reports from KCTCS, industry and employment data from the U.S. Bureau of Labor Statistics and U.S. Census Bureau, outputs of Emsi's Multi-Regional Social Accounting Matrix model, and a variety of studies and surveys relating education to social behavior. The study applies a conservative methodology and follows standard practice using only the most recognized indicators of economic impact and investment effectiveness. For a full description of the data and approach used in the study, please contact KCTCS for a copy of the main report.
Emsi is a labor market analytics firm that integrates data from a wide variety of sources to serve professionals in higher education, economic development, workforce development, talent acquisition, and site selection. Emsi is a leading provider of economic impact studies and labor market data to educational institutions in the U.S. and internationally. Since 2000, Emsi has completed over 2,000 economic impact studies for institutions across three countries. Additionally, Emsi has completed statewide economic impact studies for 32 state college systems. For more information about Emsi's products and services, visit www.economicmodeling.com.