2015

The Economic and Fiscal Impact of The University of Pennsylvania

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The University of Pennsylvania’s status as one of the world’s top educational institutions makes it an anchor institution and key economic player in the City of Philadelphia, the Philadelphia metropolitan region, and the state of Pennsylvania. Not only does it yield significant value to its students and graduates, but to the regional and state economy.

Econsult Solutions, Inc. (ESI) was commissioned by the University of Pennsylvania (Penn) to measure and articulate the depth and breadth of this economic impact. The report also included how the university achieves its impact. ESI has produced similar reports for Penn in the past. This study is an update of the 2010 report with data from fiscal year 2015.

The economic and fiscal impacts were estimated for the following categories:

  • Operations
  • Capital investments
  • Student and visitor spending
  • Wage premium
  • Global engagement
  • Local impacts

Penn produces significant economic and fiscal impacts that extend well beyond the local and state economy. The report also indicates Penn’s position as a local and global leader, with its worldwide reputation conferring benefit to Philadelphia and Pennsylvania. In addition to playing a pivotal role in generating employment, earnings and output in the region, Penn draws the vast majority of its students, alumni donations and research funding from outside the region.  Further, Penn also acts as an innovation center, drawing talent and capital into the region, and producing research breakthroughs and successful capital ventures.

Penn’s active local engagements have benefited its immediate community in numerous ways, including, but not limited to, diversity inclusion, influx of tourism and developers, and an overall higher quality of life.

You can view the report on Penn’s website.

Economic Analysis of the Impact of Next Generation Connecticut on the Town of Mansfield

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Econsult Solutions, Inc. was retained in 2015 by the Town of Mansfield, Connecticut and the University of Connecticut to analyze the potential impact of UCONN’s Next Generation Connecticut Initiative (NextGenCT). ESI’s report included a quantification of the economic and fiscal benefits that were anticipated to accrue to the Town as well as an enumeration of any net new Town service, education, and infrastructure expenditures that will result from the initiative.

NextGenCT is a ten-year plan to enhance UCONN’s capacity as a global leader in science, technology, engineering, and mathematics (STEM), as well as an economic development engine and workforce development driver for the State of Connecticut. NextGenCT involves a total capital investment of $1.54 billion and builds from two past UCONN initiatives, UCONN 2000 and UCONN 21st Century, which together represented nearly $2 billion in investment between 1995 and 2014. In order to determine the economic impact of the initiative, ESI reviewed publicly available reports produced by the Town and UCONN, data provided by the Town and UCONN, secondary research, and conducted one-on-one and group interviews with key stakeholders.

The report shows that the implementation of NextGenCT is likely to have significant economic impacts within the Town economy and significant fiscal benefits to the Town government. An increase of partnership opportunities in transportation, public safety and economic development is also anticipated. Further, the report concludes that the Town is likely to receive larger PILOT payments from the State due to the increase of the assessed value of State-owned land as NextGenCT is implemented.

The ultimate size of the economic gains and expenditure increases will depend on what level of growth NextGenCT will produce in terms of increases in student enrollment, faculty/staff headcount, and economic development spin-off, and on how much the Town chooses to capture the net new demand for residential space and commercial activity generated by that growth.

Rowan University Spurs $108 million In Economic Activity In Glassboro

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Econsult Solutions, Inc. released a report detailing Rowan University’s far-reaching economic impact on its host communities and it’s huge – more than $108 million per year in Glassboro alone.

In Rowan’s host communities of Glassboro, Camden, and Stratford, Rowan is stimulating vast private investment, creating jobs, boosting real estate markets, and offering a wide range of services to the public including medical care, education, and arts & entertainment.

In Glassboro, home to the growing university’s main campus, Rowan has an annual economic impact of more than $108 million annually, supports more than 1,000 jobs outside the university and is a critical partner in the $300 million Rowan Boulevard project, a public-private initiative that is transforming a one-time downward turning neighborhood.

“It is our responsibility as a public research University to improve the local economy by improving access to higher education, offering high-quality programs, keeping education affordable and spurring the economy,” said Rowan University President Dr. Ali Houshmand. “I am proud that the University has had such an economic influence on our host communities, our region, and the State.”

In addition to direct economic impact, Rowan students, faculty and staff volunteer an estimated 25,000 hours per year – from free medical services at the University’s two medical schools to work in food pantries, shelters and throughout the community. The market value of Rowan volunteer service in Glassboro and Camden alone is estimated to be $175,000 per year.

Driving construction trades

From Glassboro to Camden to Stratford, Rowan is in the midst of roughly $300 million in active design and construction projects, all of which create good paying, skilled jobs whose ripple effect supports the local economy and reaches far beyond.

In Glassboro, where most of Rowan’s major construction is now centered, work is underway on a $70 million second building for the Henry M. Rowan College of Engineering, a new $63 million home for the Rohrer College of Business, and a $129 million, 1,400-bed residence hall. Those projects alone are creating nearly 2,600 construction jobs.

Concurrently, Rowan is investing directly off campus with a new building for the College of Communication & Creative Arts (CCCA) at 301 W. High Street in Glassboro and has leased space for the CCCA Dean’s office and Journalism faculty in a restored former bank building at 6 E. High Street, moves designed to further integrate Rowan with Glassboro and attract private investment to the historic downtown.

Rowan is also investing heavily in its Camden campus, where a multi-million expansion is underway.
This week’s report by Econsult Solutions, Inc. (ESI) of Philadelphia, Rowan University’s Impact on its Host Communities, notes that the institution, through its popular RowanCard debit card program, supports participating Glassboro businesses with more than $4 million per year and that over the last five years Rowan spent $45 million with Glassboro and Camden vendors.

“Rowan’s effect on its host communities is profound and immediate,” said Lee Huang, senior vice president and principal of ESI. “Equally important, today’s construction projects will have a catalyzing effect as investment is drawn to investment, more students are drawn to Rowan, and the pattern repeats itself.”

Rowan, which today has 15,500 students, is projected to have 25,000 students by 2023 at its three campuses and online.

Stronger communities

ESI found that Rowan’s presence in its host communities is building critical mass, driving real estate markets and supporting residents with a wide variety of programs and resources in education, health care, entertainment and recreation.

Rowan directly supports the real estate market in each of its host communities by encouraging faculty and staff to buy homes and live in them there. It offers a ten-year, $1,500 per year housing incentive for employees who buy homes in Glassboro, Camden, or Stratford.

The program has helped stabilize and boost property values near the University while a program of economic development grants to the municipalities has helped offset the need for tax increases and the cost of public safety.

“The ESI report shows how our redevelopment planning is on track and our partnership with Rowan is especially strong,” said Glassboro Mayor Leo McCabe. “I’ve said it before but it’s never been more true – as the University goes, so does the Borough of Glassboro.”

An even stronger state

The local economic impact study is a companion piece to a statewide evaluation that ESI released in February determining Rowan’s impact throughout New Jersey to be $1.23 billion annually. That report found that Rowan supports 9,200 jobs statewide and generates $19 million in state taxes per year.
Rowan last conducted an economic impact study in 2004 when enrollment, at 9,688, was less than 2/3 what it is today, and its local economic impact, then about $17 million per year in Glassboro, was less than 1/6 what it is today.

Houshmand said Rowan conducts periodic studies about its economic impact to quantify how public investment in it gets returned to the community. Rowan’s annual operating budget of $440 million creates a statewide economic impact of nearly three times that amount.

“I fully expect that the findings in this report will, in turn, spur even greater investment in our host communities,” Houshmand said.

Though major capital projects are greatest in Glassboro this year, Rowan is investing heavily to develop resources in Camden and Stratford. The University in 2012 created Cooper Medical School of Rowan University in Camden (and has since built a $140 million facility) and has operated its Camden campus since 1969.

In 2013 Rowan became New Jersey’s second comprehensive public research university and, the same year, acquired the School of Osteopathic Medicine in Stratford to become just the second university in the nation to offer both osteopathic and allopathic medical degree programs.

To download the report, click here.

Modeling the Impact of Tax Reform in Philadelphia

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Econsult Solutions Inc. (ESI) was asked by the Central Philadelphia Development Corporation (CPDC) to estimate the impacts of the City tax reform proposal put forth by the Philadelphia Growth Coalition on tax revenues, economic growth and employment within the City of Philadelphia over the next decade (FY 2017-2026).

From the perspective of the city government, tax rates represent more than just a mechanism for raising revenues. They are an expression of policy choices, encouraging certain activities and discouraging others, that ultimately have profound implications for the economic opportunity of citizens in addition to their implications for the municipal revenue streams that allow the city to provide needed public services.

The City’s current conservative approach to forecasting, which disregards the impacts of tax rate changes on tax bases, is understandable in a world of budgeting. It is not, however, an appropriate framework for evaluating the economic development and job creation impacts of large scale tax reform proposals like the one advanced by the Growth Coalition. These impacts are not simply budgetary in nature, but instead are designed to address the long-term strategic needs of the City, and are thus best thought of within a long-term financial planning framework.

ESI found that both the Growth Coalition proposal and Five-Year plan will result in economic growth, expanding tax bases to offset decreases in rates. The exact magnitude of that growth is of course uncertain, and small differences in projected growth rates greatly impact long-range revenue forecasts. ESI’s model suggests that the Growth Coalition’s proposal generates slightly more tax revenue than the Five-Year Plan over a ten-year time window. The model also projects the Growth Coalition plan to have a far greater impact on employment growth within the city than the Five-Year plan and to generate significant ongoing incremental revenue for the School District by stimulating growth in the real estate tax base.

 

Parkway Council Economic Impact Study 2015

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Econsult Solutions, Inc. (ESI) was retained in 2015 by the Parkway Council to conduct a study on the economic, fiscal, educational, and social impact the Parkway institutions have on both the City of Philadelphia and the Commonwealth of Pennsylvania.

ESI’s study found that the Parkway Council member institutions create an impressive amount of economic activity within Philadelphia. Approximately $434 million is generated each year in total expenditures through the operations of the member organizations. This spending supports 3,515 jobs with $187 million in annual earnings. Within Pennsylvania, the operational expenses lead to $471 million in economic impact, supporting 3,745 jobs with $198 million in earnings.

The study also determined that the economic activity (direct, indirect and induced) driven by the operations and visitor spending associated with the Parkway institutions generates tax revenue for the City of Philadelphia and the Commonwealth of Pennsylvania. In total Philadelphia gains an additional $18.5 million and Pennsylvania an additional $10.4 million in tax revenues attributable to the Parkway Council institutions.

Beyond the quantitative monetary impacts, ESI found that the Parkway Council institutions and organizations also benefit the area with the educational and social opportunities they provide. Nearly all of the members organizations are involved in extensive educational programming that are important aspects of the Parkway Council’s overall collective impact on the Philadelphia region.

Charting the Multiple Meanings of Blight

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Econsult Solutions, Inc. (ESI), in collaboration with The Vacant Properties Research Network, a project of the Metropolitan Institute at Virginia Tech, was selected to conduct a national literature review on blight by Keep America Beautiful, the leading national nonprofit that envisions a country where every community is a clean, green and beautiful place to live.

This report examines more than 300 academic articles, as well as special policy and practitioner reports devoted to the concept of blight. It also provides a contemporary snapshot of how researchers, experts and practitioners describe and understand the complex conditions that create blight and the policy responses that communities are taking.

Research identified in this report documents the community impacts that blighted properties generate, particularly on the value of adjacent properties. Some of those impacts include:

  • Vacant properties cost city governments $5,000 to $35,000 per property.
  • Foreclosed homes can lead to an average increase of 1 percent in neighborhood crime.
  • Vacant dwellings have higher risks of fires in urban areas.
  • Residents in blighted neighborhoods have greater exposure to public health and environmental risks.
  • Low-income neighborhoods are more vulnerable to increases in property abandonment.

The report delineates what blight really means. Blight is the physical changes of properties that cause harmful impacts on the life cycle of neighborhoods and their residents. Among other findings about blight:

  • Blight is a complex and dynamic phenomenon with different meanings and actions shaped by a variety of actors and institutions.
  • Blighted properties also shift with the times and the place. While most of the articles and reports focused on urban blight, deteriorating properties are now a challenge for suburban and rural areas thanks in part to increasing concentrations of foreclosed homes and the spatial diffusion of poverty.
  • Blight is a symptom of larger social and social forces, such as poverty, and includes a wide variety of actions primarily led by local governments and community-based groups

The report concludes with a series of recommendations for Keep America Beautiful and its community-based affiliates and practical actions local governments and community leaders can take. Some of those recommendations include:

  • Organize blighted/vacant properties working groups: Convene a cross section of public, private and nonprofit leaders to develop more comprehensive and coordinated responses to blight, including changes in state and local laws.
  • Explore urban greening opportunities (gardening, urban agriculture, green infrastructure, etc.) to address vacant lots and blighted land.
  • Publish a problem properties toolkit: Have a guide that explains how communities can take action with vacant and blighted properties.

With a better understanding of blight thanks to this report, Keep America Beautiful will work in conjunction with ESI to develop new tools and resources to better measure the many impacts of blight.

To download and read the report in its entirety, click the link to the right.

For more on this report, click here.

For more information from Keep America Beautiful’s website, click here.