Study: University System Economic Impact Rises to $4.8 Billion

December 18, 2014


The economic impact of the North Dakota University System and its students on the state is on the rise. It now stands at an estimated $4.8 billion for Fiscal Year (FY) 2013, compared to $3.7 billion in FY 2009, according to the most recent NDUS Economic Impact report.

This is the result of $1.7 billion in student spending and NDUS expenditures, coupled with secondary economic impacts. On a statewide level, the impact of NDUS resulted in $1.4 billion in additional retail trade activity and $1.7 billion in economy-wide personal income, generating $64.3 million in sales and use tax and $26 million in income tax revenues.

“These findings confirm the strategic connection between a strong university system and a strong economy,” said Kirsten Diederich, chair of the State Board of Higher Education. “By investing in our students, the North Dakota taxpayers are also investing in our economy – boosting business activity, expanding research opportunities, and supporting job growth.”

According to the report, the levels of business activity resulting from student spending and NDUS expenditures would support 10,760 full-time equivalent jobs in 2013.

NDUS receives funding through general fund appropriations, as well as other revenue sources like grants, contracts and donations. In 2013, non-general fund expenditures made up 68 percent of total spending. The authors concluded that the state’s colleges and universities are able to leverage $2.14 from external sources for every dollar of state appropriated funds. Much of those non-appropriated funds come from outside sources, and could be considered new money to the state of North Dakota.

“Business in North Dakota is growing at breakneck speed,” said Larry C. Skogen, interim chancellor of the North Dakota University System. “With a projected population increase of 20 percent by 2020 and 120,000 projected job openings, the majority of which will require postsecondary education, it is crucial that we seize this opportunity to educate North Dakotans and recruit out-of-state students to fill our workforce needs.”

In October, the State Board of Higher Education approved its 2015-2020 strategic plan – The NDUS Edge. “The plan outlines the path to fulfilling workforce needs and giving our students the edge they need to compete in the ever-changing business community,” said Diederich. “Through partnerships with business and industry, as well as increasing efficiencies throughout the system, we are able to be good stewards of our funds while taking advantage of the once-in-a-lifetime opportunities our current economy is presenting.”

Key measures of the NDUS economic impact in FY 2013 include:

  • Direct economic impacts (expenditures) of $1.3 billion, of which $873 million were expenditures from non-general fund sources. This direct impact created a gross business volume of $3.8 billion, which included $923 million in retail trade activity and $1.5 billion in economy-wide personal income.
  • Student living expenses were estimated at $415 million and were in addition to institution spending. Increased business activity generated by student spending was estimated at $1 billion, which included $467 million in retail trade activity and $250 million of economy-wide personal income and would support about 1,900 secondary jobs.

The FY 2013 report was conducted by North Dakota State University’s Department of Agribusiness and Applied Economics and is similar to other studies done in 1999, 2004, 2008, 2009 and 2011. Report authors Dean A. Bangsund, Randall C. Coon and Nancy M. Hodur used the North Dakota Input-Output Model to estimate economic impact.