The university contributes $3.4 billion a year and 23,508 jobs to the state’s economy, giving taxpayers an eightfold return on their money, according to a study released earlier this month.
The study, titled “Impacts of the University of Maryland, College Park,” gives citizens, public officials and other stakeholders a holistic look at the university as an academic, economic, social and cultural institution and helps to quantify the university’s crucial economic role in the state. The report, completed by the Baltimore-based economic consulting firm Sage Policy Group, Inc., was commissioned by the University of Maryland College Park Foundation.
A similar assessment that another group conducted in 2001 found the university’s economic impact to be just under $1.8 billion, said Brian Darmody, the university’s associate vice president for research and economic development. The new number is based on data from fiscal year 2007, but Darmody said it is still valid.
Though definitions of economic impact differ across various institutions, the university’s numbers were similar to peer institution University of California, Berkeley, but far lower than University of California, Los Angeles.
The university’s $3.4 billion impact reflects four measures: economic input and output caused by direct and indirect university spending, said Carl DeLorenzo, Sage’s chief operating officer. The university helps generate $1 billion in income and $2.4 billion in business spending in the state, the study found. Direct university spending includes things such as paying employees and purchasing equipment. Indirect impact includes the businesses that set up shop on Route 1 and the students who pay rent in College Park, among other factors.
University spending generated $70 million in tax revenue for state and local governments, and student and visitor spending added about $9 million in taxes, the report found.
“The University of Maryland, College Park, doesn’t have an economic impact in a vacuum,” DeLorenzo said. “It has an economic impact through those chains in the community.”
The university’s economic contribution to the state was a key selling point in Gov. Martin O’Malley’s (D) decision to give the university system an extra $16 million in this year’s budget, allowing the Board of Regents to maintain an in-state undergraduate tuition freeze for the fourth straight year. While lobbying the state government last spring, university President Dan Mote emphasized research and small business incubation as university strengths.
The study focused on research spending in mathematics, science and engineering because innovations in those fields are easily quantifiable, said Anirban Basu, Sage’s chief executive officer. University faculty and staff unveiled 114 inventions and obtained 22 patents in fiscal year 2006, the report found. Research funding has more than doubled from about $200 million in fiscal year 1999 to $407 million in fiscal year 2007.
Will this report push legislators in Annapolis to give the university more money? Probably not, said state Sen. Jim Rosapepe (D-Anne Arundel and Prince George’s), who represents College Park. Rosapepe hasn’t seen the Sage report but said reports like it are good for public relations.
“Everybody knows [the university] has a big economic impact, but I don’t think it changes anybody’s mind,” Rosapepe said. Hearing directly from students, parents and alumni about the importance of an affordable education compels legislators more than reports, Rosapepe said.
But Ross Stern, the university’s lobbyist, said the report “certainly doesn’t hurt” the university’s attempts to get increased state funding.
“Obviously we will be talking about it every chance we get,” Stern said.
The report might also attract potential private sector donors by illustrating what the university gives to the community, Darmody said.
Beyond economics, the report found that in 2007, the university conferred a higher number of master’s and doctoral degrees compared to its previous five-year average. The report also discussed the university’s progress toward increasing diversity and environmental sustainability.