USM Economic Impact Study Finds $6.7 Billion in Additional Maryland Incomes and Sales Taxes Generated by Three Classes Analyzed
Study Validates Substantial Return on State's Investment
Adelphi, Md. (Jan. 25, 2013) -- A new report commissioned by the University
System of Maryland (USM) to study the system's impact on the state economy
finds that three representative graduating classes analyzed will yield $6.7
billion in additional Maryland income and sales taxes, from estimated lifetime
incremental earnings and the multiplier effect of the classes' associated
The study reveals ample evidence of the system's
significant contribution to the health of Maryland's economy. It also validates
the recognition that an investment in a USM education pays a lifetime of
dividends in the form of better jobs and higher incomes.
financial impact was estimated by a detailed analysis of three representative
USM graduating cohort classes: 1986, 1989, and 1996. The study finds that the
cumulative impact on state revenues of these graduates is considerable.
the course of their working lives, the 1986, 1989, and 1996 graduates will have
increased earnings, and pay increased taxes, for a total of $2.8 billion in
additional Maryland income and sales taxes as follows:
For 1986 graduates, estimated lifetime incremental earnings
will be $12.0 billion, generating $796.3 million in additional Maryland income
and sales taxes;
For 1989 graduates, estimated lifetime incremental earnings
will be $13.3 billion, generating $883.8 million in additional Maryland income
and sales taxes;
For 1996 graduates, estimated lifetime incremental earnings
will be $17.4 billion, generating $1.2 billion in additional Maryland income
and sales taxes.
In addition to increasing state tax revenues, the incremental earnings
of USM graduates stimulate the Maryland economy through a "multiplier" effect.
When these graduates spend their earnings, other economic activities are
supported that result in jobs.
For instance, economic
activity generated by the lifetime incremental earnings of the three cohorts will
result in nearly $3.9 billion in additional state taxes and will support an
average of 9,356 annual jobs.
The USM commissioned the Jacob France Institute
(JFI) at the University of Baltimore to conduct the study. It provides an in-depth analysis of
the system's impact in three key areas:
Earnings, Economic, and Fiscal Impact: The
system's impact on the state as measured by increased earnings of and taxes
paid by system graduates, and new spending attracted into Maryland from sources
such as federal research support and out-of-state students;
Workforce Development: The system's ability
to produce graduates in areas of workforce shortages;
Economic Development: The system's
contribution to Maryland's economic vitality through its research, partnerships
with the private sector, and technology transfer.
When comparing the
positive impact of the USM to state appropriations for the system, it becomes
clear the state has made a sound investment. For the 1986 cohort of graduates,
the state receives $3.10 in revenue for each $1 invested. The figures are
equally impressive for the 1989 cohort ($2.50 received by state for each $1
invested) and the 1996 cohort ($2.75 for each $1).
"A guiding principle of
the University System of Maryland is a strong commitment to serving not only
our students and institutions but all citizens of Maryland," said USM
Chancellor William E. "Brit" Kirwan. "The USM is a major economic driver in the
state, and this economic impact study confirms the system's long tradition of
delivering a remarkable return on the state's continued investment in our
activities and mission."
information of the graduates was examined and compared to the estimated
earnings of persons with the next lower level of educational attainment.
earnings of a 1986 University System of Maryland bachelor's degree recipient
in 2010 were $85,830, with incremental earnings of $53,482 more than a
person whose highest level of educational attainment was a high school degree. Average
2011 earnings for 1986 master's degree recipients were $84,147, a level
of earnings $3,296 below the earnings of the average USM bachelor's degree
recipient. The average 2011 earnings for a 1986 professional
school graduate were $169,983 with incremental earnings of $82,541 more
than the average USM bachelor's degree recipient.
With three of the state's
four primary research universities-University of Maryland, College Park (UMCP);
University of Maryland, Baltimore (UMB); and University of Maryland, Baltimore
County (UMBC)-the USM is also a core element of Maryland's academic and
scientific infrastructure. The system annually generates $1.1 billion in
academic research and development expenditures.
"I am pleased that this thorough study of the USM's
impact on Maryland's economy reflects the system's substantial influence on the
state's financial well-being," said Gary L. Attman, chair of the Board of
Regents Committee on Economic Development and Technology Commercialization. "I
know that the USM will remain committed to building a culture of
entrepreneurship and continuing to strengthen practices to boost the
translation of campus research into new commercial opportunities that will
benefit citizens throughout the state."
USM institutions host four research parks that
house 117 tenants with nearly 3,200 employees. Those four sites are M Square
Research Park (UMCP); UMB BioPark (UMB), bwtech@UMBC (UMBC); and the Allegany
Business Center at Frostburg State University.
In keeping with a recent strategic goal to help
create 325 companies in 10 years, the USM has had significant impact on the
development of 51 companies from July 2011 to June 2012.
USM Economic Impact Study
Executive Summary of USM Economic Impact Study
Contact: Mike Lurie