Presentation on theme: "Presenting the Socioeconomic Benefits of Coast Community College District Orange Coast College Costa Mesa, CA."— Presentation transcript:
Presenting the Socioeconomic Benefits of Coast Community College District Orange Coast College Costa Mesa, CA
About the District Governed by locally elected Board of Trustees Three colleges Orange Coast College (Costa Mesa) Golden West College (Huntington Beach) Coastline Community College (District-wide) 60,000 students 300 degree and certificate programs offered
About the Study District, along with other OC CC’s, commissioned a study of the socioeconomic benefits of our colleges on our local region The Economic Contribution of the Orange County Community College Districts by CCbenefits, Inc. (affiliated with AACC) Economic impact model subjected to peer review and field-tested on over 500 different community colleges in US & Canada
District Operations Spending District Operations: CCCD creates regional income through the earnings of its faculty and staff, as well as through its own operating and capital expenditures. Total Effect:After adjustingfor tax payment effects, we can say thatCCCD operations annually contribute $74.9 million to regional income in the local region.
Past-Student Productivity Effects Direct Effect: Past students contribute an estimated $2.4 billion worth of added income per year to the regional economy after leaving CCCD. Indirect Effect: The estimated multiplier effect of past student productivityin other industries increases income by yet another $386.1 million.
Total Income in District Service Area The defined economic region generateda total of $112.2 billion inlabor and non-labor income in FY 2004. Of this,CCCD operations spending and past student productivity effects accounted for $2.9 billion, or 2.6% of all regionalincome.
Investment Analysis Component The return to taxpayers for their support Broad taxpayer perspective Narrow taxpayer perspective The student benefits due to higher earnings What we measured: A broad collection of external social benefits Medical savings Crime savings Welfare and unemployment savings
This figure shows the present value of increased future earnings as a direct result of the students’ education. Student costs consist of the tuition paid by the students and, most importantly, the opportunity cost of time (earnings foregone). Student Benefits Higher earnings = Student costs =
Benefit/Cost Ratio: The ratio of benefits over costs. A 1.5 ratio, for example, means that every dollar invested will return a cumulative $1.50 to the investor over the time period analyzed. Criterion for feasibility: The B/C ratio must be greater than or equal to 1. Benefit/Cost Ratio: Student Benefits Higher earnings = Student costs =
Rate of Return: the average earning power of the money used over the life of the investment. A 15% rate of return, for example, means that the revenues collected over time will equal the costs, plus generate a 15% return. Criterion for feasibility: the rate of return must exceed the returns from alternative uses of the same money. Rate of Return: Benefit/Cost Ratio: Student Benefits Higher earnings = Student costs =
Payback Period: This is the length of time needed from the beginning of the investment before the cumulative future revenues return all of the investments made. Payback Period: Rate of Return: Benefit/Cost Ratio: Student Benefits Higher earnings = Student costs =
Student Benefits Some Key Findings Achieving anAssociateDegree from CCCD will increase earnings to $40,438 per year, or35.3% more than the average high school graduate. An Associate Degree graduate will earn$378,500 more than someone with a high school diploma or GED over his or her future career. Lifetime earnings will increase$4.95 for every dollar invested (tuition, fees, books, and foregone earnings).
Social Benefits The medical, crime and welfare/unemployment savings are avoided costs, i.e., the reduced burdens on employers and taxpayers. These external social benefits are generated annually as the education level of the workforce increases. Aggregate. Medical Savings Crime Savings Total Welfare/Unemployment Savings
The broad perspective: State taxpayers invest, but beneficiaries are widely dispersed (students, business community, society). We count all of the benefits regardless of to whom they accrue. Return to Taxpayers Taxpayers Costs = State Appropriations + Property Taxes Taxpayer Benefits = Higher Earnings + Social Benefits Broad Taxpayer Perspective Benefit/Cost Ratio:
Return to Taxpayers Taxpayers Costs = State Appropriations + Property Taxes Taxpayer Benefits = More Taxes Collected + Social Benefits Narrow Taxpayer Perspective Payback Period: Rate of Return: Benefit/Cost Ratio:
To Summarize… IT PAY$ BACK: IT PAY$ TO LEARN: IT PAY$ TO INVEST: TheCCCD regional economy is measurably stronger Taxpayers in theState ofCalifornia are measurably better off TheCCCD students are measurably better off
To Summarize… ECONOMY STUDENTS TAXPAYERS For every dollar invested in our colleges, the public will receive $17 back over the next 36 years For every unit earned, the state and local community saves $20/year