Study: University System Economic Contribution Rises to $5.7 Billion

May 12, 2017

The economic contribution of the North Dakota University System and its students on the state is on the rise. It now stands at an estimated $5.7 billion for Fiscal Year 2015, compared to $4.8 billion in FY 2013, according to the most recent NDUS Economic Impact report.

The study evaluated in-state spending patterns for the NDUS colleges and enrolled students. Students and the NDUS had combined in-state expenditures of $2 billion in 2015. The $2 billion of in-state spending was estimated to generate $3.7 billion of additional economic activity. On a statewide level, the impact of NDUS resulted in $1.7 billion of retail trade activity and $1.9 billion in economy-wide personal income, generating $77 million in sales and use tax and $29 million in personal income tax revenues.

“These findings confirm the strategic connection between a strong university system and a strong economy,” said Kathleen Neset, 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.”

NDUS receives funding through general fund appropriations, as well as other revenue sources like grants, contracts and donations. In 2015, non-general fund expenditures made up 66 percent of total spending. The NDUS spent an additional $1.95 in North Dakota for every $1 of general fund appropriations. The ability to leverage general fund revenues to secure funding from grants, contracts, and donations accounted for two-thirds of the economic activity generated by the NDUS.

According to the report, the NDUS directly employed 11,592 individuals in 2015, excluding student workers. With non-general funds supporting 60 percent all salaries in the NDUS, much of the direct jobs in the NDUS could be considered gains from leveraging general fund appropriations. The employment impacts of the NDUS grow if secondary employment is included, which was estimated at about one secondary job in the state’s economy for every one direct job in the NDUS.

“Business in North Dakota continues to grow in many areas, to include the technology area and we need to be able to answer the needs in our workplace as they continue to evolve,” said Chancellor Mark Hagerott of the North Dakota University System. “It is crucial that we seize this opportunity to adapt our system and educate our future workforce that will fill our employer’s needs. The success of our students will depend on skilled faculty and staff, and the programs to support their work even after graduation.”

In June, the State Board of Higher Education will meet to look at any changes to its 2015-2020 strategic plan – The NDUS Edge. “The plan outlines the path to fulfilling workforce needs and giving our students what they need to compete in the ever-changing business community,” said Neset. “Through partnerships with business and industry and government leaders, as well as increasing efficiencies throughout the system, we are able to be good stewards of our funds.”

Key measures of the NDUS economic impact in FY 2015 include:
• Direct economic impacts (expenditures) of $1.6 billion, of which $1.1 billion were expenditures from non-general fund sources. This direct impact created a gross business volume of $4.6 billion, which included $1.2 billion in retail trade activity and $1.7 billion in economy-wide personal income.
• Student living expenses were estimated at $427 million and were in addition to institution spending. Increased business activity generated by student spending was estimated at $1.1 billion, which included $480 million in retail trade activity and $258 million of economy-wide personal income and would support about 1,800 secondary jobs.

The FY 2015 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, 2006, 2008, 2009, 2011, and 2013. Report authors Randall C. Coon, Dean A. Bangsund and Nancy M. Hodur used the North Dakota Input-Output Model to estimate economic impacts.

Click here to view the full report.