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Allegany College has big economic impact according to report

January 25th, 2017 by WCBC Radio

Allegany College of Maryland provides enormous economic value to Allegany County and the surrounding area, contributing nearly $24 million in employee earnings and benefits each year and generating nearly $98 million in total economic impact.

 

The figures, which show substantial return on state and local taxpayer dollars invested, are among key findings of a newly released study that gauges the social as well as the economic impact of the community college in the region.

 

This analysis of ACM’s economic value is part of a statewide report commissioned by the Maryland Association of Community Colleges and conducted by the nationally known economic research firm Economic Modeling Specialists International. It covered the fiscal year ending June 30, 2016.

 

EMSI used labor market data to draw connections between economics and people to analyze the impact of ACM on the local economy and its return on investment by students and the community.

 

ACM students enjoy an attractive 15.4 percent rate of return on their educational investment, recovering their costs, including wages foregone while enrolled, in less than nine years. The average student’s future income increases by $3.50 for every dollar invested.

 

Taxpayers derive great benefit from ACM as well. State and local governments recoup more than they contribute through higher tax collections from alumni who earn more than they would without a college education.

 

State and local funding of $16.6 million in the study year generated $27.3 million in total benefits through added taxes collected and public-sector savings derived through improved lifestyles.

 

This means that for every $1 of public money invested $1.60 was returned to taxpayers over students’ working lives for an average annual return of 4.8 percent.

 

ACM’s benefits to society as a whole also were calculated based on higher earnings of 2015-16 students in their working lifetime along with associated increases in business output and savings in social costs.

 

Society’s investment of $71.1 million in the analysis year, including student expenditures and student opportunity costs, generated $307.4 million in total benefits to society, the study found. Every dollar invested yields $4.30 in benefits to society.

 

“ACM creates value in many ways,” the report stated. “The college plays a key role in helping students increase their employability and achieve their individual potential. “It provides students with the skills they need to have a fulfilling and prosperous career,” it added. “Further, it supplies an environment for students to meet new people, increase their self-confidence and promote their overall health and well-being.”

The EMSI study determined that the college’s day-to-day operations added $26 million to the region in 2015-16, the equivalent of supporting 601 jobs.

 

ACM students, both drawn to and retained in the area because of the college, added $3.8 million to the regional economy. The sum they spent was the equivalent of supporting 89 jobs.

 

But the college’s greatest economic impact stems from the education and training it provides to area students. New workplace skills by ACM’s thousands of alumni added $67.6 million in income that year, or the equivalent of 1,229 supported jobs.

 

EMSI credits ACM with $97.4 million of total income supported in the regional economy through spending by the college and its students and by the impact of its alumni. This economic energy supports 1,918 jobs in the region.  

 

EMSI’s economic-value analysis of ACM and other Maryland community colleges used the firm’s multi-regional social accounting matrix model. Findings were released last month [December].

 

Maryland’s community colleges enroll more than half of all the undergraduate students in the state’s institutions of higher education.

 

ACM served 3,706 credit and 6,882 continuing education students in the year that EMSI, a CareerBuilder firm, conducted the study. Eleven percent of these 3,706 students were drawn to the area because of the college, and 68 percent of the total remained after their studies ended.

 

ACM employed 563 area residents to educate its students that fiscal year and maintained a total payroll, including benefits, of $23.8 million.

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