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TRANSCRIPT
THE ECONOMIC IMPACT OF THE UNIVERSITY OF NORTH ALABAMA ON COLBERT AND LAUDERDALE COUNTIES
May, 2012
Analysis Performed by:
Dr. J. Douglas Barrett
Dr. Jim F. Couch
Dr. Keith D. Malone
Department of Economics and Finance
University of North Alabama
Table of Contents
1
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Impact of University Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Total Employment and Earnings Generated by UNA . . . . . . . . . . . . . . . . . . 14
University Visitors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Impact of Faculty, Staff and Students . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Taxes Generated in the Local Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Degree Earnings Premium . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Attendance, Accommodations and Spending—Home Football Games . . . . . 30
EXECUTIVE SUMMARY
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What Is the Economic Impact of the University of North Alabama (UNA) to the Local Economy? The Local Economy is impacted through:
University Operations Payroll Purchases Capital Expenditures
Contractor Operations Payroll Purchases
Student Spending Off-campus Purchases
University Events and Activities that Attract Visitors and Guests Off-campus Purchases by Visitors
Total Impact (direct and indirect effects) Jobs as a result of the university 4,433 Earnings as a result of the university $159,268,536 Total Spending $279,935,300
Impact from University Payroll and University Contractor Payroll
EMPLOYMENT Direct Employment 1,092 Indirect Employment 256 Total Jobs 1,348
PAYROLL Direct Payroll $39,542,992 Indirect Payroll (Earnings) $13,544,990
Impact from University and University Contractor Non-payroll Expenditures plus University Capital Expenditures
TOTAL SPENDING $9,601,870 Indirect Employment 300 Indirect Payroll (Earnings) $6,414,165
Direct Employment (Payroll) represents jobs (payroll) at the University of North Alabama and its contractors. Indirect Employment (Payroll) represents jobs (earnings) that exist
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in the local economy as a result of the University of North Alabama. Total impact represents the injection of dollars into the local economy that are spent and re-spent until they leak out of the local economy.
Business Category Annual Spending
Housing/Shelter $27,600,003Utilities 14,923,415Household Furnishings 1,151,983Groceries 14,321,627Restaurants 6,166,150Healthcare 2,268,862Apparel 3,186,540Transportation (vehicle, maintenance) 26,872,622Recreation and Entertainment 3,196,592Personal and Business Services 1,405,672Religious and Charitable Contributions 4,722,022Personal Insurance 10,610,113Other Retail 4,586,743Total Spending $121,012,344
Savings University Employees and Students save a portion of their Incomes
Funds Deposited with Local Institutions
Checking 7,078,090Savings 16,735,049Total $23,813,139
Taxes Ownership of Property and Spending by University Employees and Students Generates Tax Revenue for Local Government.
Amount Total Real Estate Taxes $1,070,601 Total Personal Property Taxes $879,272 Total Property Taxes $1,949,873 Direct Sales Taxes $2,999,470 Indirect Sales Taxes $1,179,392 Total Sales Taxes $4,178,862 Total Local Taxes $6,128,735
UNA Home Football Game Revenues
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Hotel Rent Collected $349,132Total Spent at Event $1,759,593
Total Spent in Community $3,213,555Total Indirect Earnings from
Home Football Games$2,482,869
UNA home football games generate over $7.8 million each year into the Shoals economy.
Earnings Premium for Graduates of the University of North Alabama:
Highest Degree Career EarningsNot High School
Graduate$973,000
High School 1,300,00Some College 1,860,073
Associates Degree 1,550,000Bachelor's Degree 2,270,000Master's Degree 2,670,000
These premiums suggest that each UNA student with a bachelor’s degree who remains in the Colbert/Lauderdale County impact area, has almost $1 million in lifetime earnings to spend or save than a high school graduate in the local impact area. A Master’s graduate who remains in the impact area has access to more than $1.3 million in additional lifetime earnings.
In addition, earning bachelor’s and master’s degrees increases sales taxes and charitable gifts.
Additional Contributions
Bachelor’s Master’s
Sales Taxes $10,822 $15,284Charitable Gifts $14,453 $20,413
For students who remain in the Shoals area, sales taxes and charitable giving are substantially increased, thus helping improve the overall quality of life in the area.
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Community Service
UNA employees devote the following total monthly hours to community service in the Shoals:
Category Hours
Civic Clubs 521Other Service 2,304Board of Directors 367Community/Government 427School Boards 154Youth Organizations 1,024Church 7,596Other 768
The community service further enriches the Shoals quality of life.
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The Economic Impact of the University of North Alabama 2011
INTRODUCTION
The advantages offered to a community from the existence of a university are numerous
and in some cases difficult to quantify: exposure to the arts, to musical performances and to
other cultural events, for example. In addition a more informed citizenry and enhanced personal
enrichment opportunities add to the benefits that result from the presence of an institution of
higher learning. While these factors are of obvious value to a community, the purpose of this
study is to identify the economic benefits.
Economic impact analysis offers a methodology to estimate the monetary effect on a
particular area due to the activities of a given firm. In the current study, the economic impact of
the University of North Alabama is estimated using standard methodology. As one of the largest
employers in the area both in number of employees and payroll, the impact of the University on
the surrounding community is substantial.
The counties considered in the analysis are Lauderdale and Colbert, which contain the
Florence Metropolitan Statistical Area (MSA). Other geographic areas are obviously affected to
varying degrees by the University of North Alabama, but for the purpose of this study only the
impact on Colbert and Lauderdale Counties are estimated.
Spending data were gathered using an online survey of University of North Alabama
(UNA) students and employees. Additional spending data were obtained through the Office of
Business Affairs, covering categories such as direct expenditures by the University, expenditures
by University contractors, visitor expenditures and payroll information. These data were used to
estimate sales taxes generated from direct University spending, employee spending and student
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spending, property taxes collected due to the existence of the University and deposits in local
financial institutions as a result of the University.
A breakdown of the consumption habits of both UNA students and employees is included
in the report. Also discussed in the study are the earnings premium earned by graduates of the
University of North Alabama, the economic impact of UNA home football games, and
community service contributions of UNA employees and their spouses.
IMPACT OF UNIVERSITY OPERATIONS1
The University of North Alabama is a major employer in the Colbert/Lauderdale region
of North-West Alabama both in terms of the number of employees and in terms of the payroll.
UNA provides employment to administrators, faculty and staff on a full-time basis. Total
administrators employed by UNA on a full-time basis equal fourteen. There are 266 total faculty
members employed by UNA on a full-time basis, and 385 total staff. Thus, total full-time
employment at the University is 665.
Additionally, individuals are employed on a part-time basis. Full-time equivalence
positions are constructed in order to estimate the total direct employment impact of UNA.2 The
university has no part-time administrators. The conversion from part-time faculty to full-time
faculty yields an additional 95.5 full-time faculty members. The conversion from part-time staff
to full-time staff yields an additional 93 full-time staff members.
1 All information reported in this section is based on data provided by the University of North Alabama and its contractors in December of 2011. This information was gathered through interviews with various departments and agencies through the Office of Financial Affairs. The survey is located in Appendix A.
2 It is assumed that a full-time employee will work 40 hours per week for a period of 52 weeks which yields 2,080 work hours per year. Thus, full-time equivalences are constructed by dividing total hours worked by part-time employees by 2,080. This calculation yields the total number of full-time employees which would be required to conduct the activities currently performed by part-time employees.
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Student employment at UNA is all on a part-time basis so full-time equivalences must be
calculated. The student employment includes both graduate and undergraduate student
employment. A total of 189.5 full-time students are employed by the university.
Thus, the conversion from part-time to full-time adds an additional 95.5 faculty members,
an additional 93 staff members and an additional 189.5 students. Combining full-time
employees with full-time equivalences for part-time workers yields a total of 1,043 full-time
employees at the University of North Alabama. This information is summarized in Table 1.
Table 1: 2011 Direct UNA Employment
Full-TimeFull-Time
Equivalences TotalAdministrators 14 -- 14
Faculty 266 95.5 361.5Staff 385 93 478
Students* -- 189.5 189.5Total Employment 665 378 1,043
* The student category includes both undergraduate and graduate student employment.
Source: Interviews with UNA personnel with FTE's estimated by consultants
Earnings by administrators, faculty, staff and student employees in 2011 total
$38,597,000. The income earned by UNA personnel is used to purchase various items from
local retailers, make mortgage payments, pay utility bills, provide savings for local financial
institutions, etc. The impact of expenditures by faculty, staff and students on Colbert and
Lauderdale Counties is examined in a subsequent section. Table 2 provides 2011 payroll by
category.
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Table 2: 2011 UNA Payroll by CategoryPayroll
Administrators $2,138,867Faculty 20,309,876
Staff 14,764,323Students 1,383,934
Total $38,597,000Source: Interviews with UNA personnel
Contractors are also employed by the university to provide various services which impact
the local economy. Specifically, UNA employs contractors for foodservice and campus
bookstore operations. During 2011, university contractors employed 30 full-time employees.
Part-time workers adjusted to full-time equivalents total 18.6. Thus, total full-time contractor
employment equals 48.6 workers. Foodservice and bookstore employees earned a total payroll
of $945,992. Table 3 summarizes contractor employment and payroll data.
Table 3: 2011 Direct Contractor Employment and Payroll
Employment Full-TimeFull-Time
Equivalences TotalFoodservice 29 13.9 42.9Bookstore 1 4.7 5.7
Total Employment 30 18.6 48.6
Foodservice Bookstore TotalPayroll $834,356 $111,636 $945,992
Source: Interviews with UNA employees with FTEs estimated by consultants
Indirect and Induced Effects of University of North Alabama Employment and Payrolls
University employees and contractors use their earnings to make purchases in the local
economy. This spending obviously boosts the sales of local vendors. Increased sales generate
additional earnings for business firms and their employees. In addition, these firms must employ
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more workers because of the increased business. Additional rounds of earnings and expenditures
translate into even greater employment and earnings in the Colbert/Lauderdale impact area.
These effects are the indirect/induced effects of university and contractor employee expenditures.
To capture the secondary effects of employee spending, RIMS II multipliers produced by
the Bureau of Economic Analysis (BEA) of the U.S. Department of Commerce are utilized.
Rather than restricting the impact of the university to only the Florence Metropolitan Statistical
Area, the analysis is expanded to include the impact on all of Lauderdale and Colbert Counties.
Therefore, BEA multipliers are constructed to include all of Colbert and Lauderdale Counties.
The appropriate employment multiplier for university services is equal to 0.2355. Thus,
for every 100 jobs at the university, an additional 23.55 jobs are generated in the local economy
(defined as Colbert and Lauderdale Counties). Given UNA’s total employment of 1,043, indirect
jobs generated in the area total 245.63. An additional 8.87 indirect jobs result from UNA
foodservice total employment of 42.9 (the foodservice employment multiplier is equal to
0.2067). Finally, 1.34 indirect jobs are generated in the local economy due to the employment of
5.7 bookstore employees (university services multiplier of 0.2355 used). Total indirect jobs
generated in the local economy as a result of University of North Alabama employment equals
255.84. Thus, almost 256 workers in Colbert and Lauderdale Counties have their jobs because of
UNA employment levels.
When UNA employees and contractors spend their earnings in the local economy,
additional income for other workers is generated. Subsequent rounds of expenditures create
more income so that the initial spending is multiplied. The appropriate earnings multiplier for
Colbert/Lauderdale Counties and for university services equals 0.3407. Thus for each $1 spent
by university personnel, an additional 34 cents of income is generated in the local economy.
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Applying the multiplier to UNA’s payroll of $38,597,000 yields indirect/induced income equal
to $13,149,997.97. Bookstore indirect income totals $26,290.28. The appropriate earnings
multiplier for Colbert/Lauderdale Counties and for foodservice equals 0.4419. Applying the
multiplier to foodservice payroll yields indirect/induced income of $368,701.92. Total
indirect/induced earnings equal $13,544,990.17 This information is found in Table 4.
Table 4: Summary of Indirect and Induced Employment and Earnings
Related to UNA and Contractor employment and Payroll
Employment EarningsUNA 245.63 13,149,997.97Contractors
Food Service 8.87 368,701.92Bookstore 1.34 26,290.28
Contractor Total 10.21 394,992.19Total 255.84 $13,544,990.17
Source: Consultant Projections
Non-Payroll Expenditures by the University of North Alabama and Contractors
In addition to payroll expenditures described in the previous section, UNA also makes
purchases from local vendors each year. University officials estimate that approximately sixty-
three percent (63%) of total university purchases are made with vendors from the defined local
economy. During 2011, the university purchased $7,518,108 of goods and services from
vendors in the Colbert/Lauderdale County impact area.
Furthermore, UNA officials estimate that approximately twenty-one percent (21%) of
expenditures on buildings, site work, equipment and set-up for capital projects are made with
local vendors which equalled $1,842,704 in 2011. Thus, total local expenditures by the
university equal $9,360,812.
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UNA contractors also make purchases from the Colbert/Lauderdale study area each year.
Based on interviews with individual contractors, expenditures of $146,058 by food service
contractors were made with local vendors during 2011. Bookstore officials estimate that
$95,000 was spent in the local economy. Thus, total local contractor spending equals $241,058.
Adding this value to total UNA expenditures yields an estimated $9,601,870 in local purchases
in year 2011.
Indirect Effects of Expenditures
University and contractor purchases boost the sales of local vendors. Increased sales
generate additional earnings for firms engaged in business transactions with UNA and its
contractors. Subsequently, these firms must employ more workers because of the increase in
business. Additional rounds of earnings and expenditures translate into even greater
employment and earnings opportunities for individuals in other industries and businesses in the
Colbert/Lauderdale impact area. These effects are the secondary or indirect effects of university
and contractor expenditures. Thus the total economic impact of transactions with local vendors
is the sum of both direct and indirect impacts.
To capture the secondary effects of direct spending, RIMS II multipliers—produced by
the Bureau of Economic Analysis (BEA) of the U.S. Commerce Department—are used. As
discussed previously, rather than restricting the impact of the University to only the Florence
Metropolitan Statistical Area, the analysis is expanded to include the impact on all of Colbert and
Lauderdale Counties. The BEA multipliers reflect the two-county impact area. The multipliers
account for both the indirect effects of spending and the induced effects of spending. Induced
effects include the impact of the expenditures of indirect earnings generated.
The employment multiplier for university expenditures (and bookstore expenditures) is
equal to 31.28, indicating that slightly more than 31 jobs are created in the local economy for
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every $1 million in expenditures. UNA total local spending equals $9,360,812, an amount that
generates 292.813 jobs in the local economy. Bookstore spending totaled $95,000, which created
2.97 jobs in Colbert and Lauderdale Counties. The appropriate employment multiplier for
foodservice spending is 28.1. Thus, for every $1 million in foodservice spending, slightly more
than 28 jobs are created in the local economy. Food service expenditures equaled $146,058.
Thus, based on the multiplier, foodservice activities generate 4.06 jobs in the local economy.
The earnings multiplier for university expenditures (and bookstore expenditures) is equal
to 0.6711. $1 of university or bookstore spending creates an additional 67 cents in earnings in
the Colbert/Lauderdale region. University expenditures of $9,360,812 generate $6,282,040.624
in additional earnings in the local economy, while bookstore spending of $95,000 generates
$63,754.5 in additional earnings. The appropriate multiplier for foodservice activities equals
0.4681, so $1 of foodservice spending creates an additional 47 cents in earnings in the
Colbert/Lauderdale region. Foodservice expenditures of $146,058 result in an additional
$68,369.75 in earnings.
Total employment in the local economy resulting from total UNA expenditures is equal
to almost 300 full-time jobs. Total indirect and induced earnings resulting from total UNA
expenditures equal $6,414,164.87. This information is found in Table 5.
Table 5: Summary of Indirect and Induced Employment and Earnings 3 Indirect jobs are calculated as follows: (Expenditures with Local vendors/1,000,000)x(BEA employment
multiplier) = Indirect Jobs. In this case we multiply (9,360,812/1,000,000) x (31.28) yielding 292.81 jobs created.4 Indirect earnings are calculated as follows: (Expenditures with Local Vendors) x (BEA earnings
multiplier) = Indirect Earnings. In this case we multiply ($9.6 million) x (0.6711) = 6,282,040.62
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Related to UNA and Contractor Local Spending
Local Spending Employment EarningsUNA $9,360,812 292.81 6,282,040.62Contractors
Food Service 146,058 4.06 68,369.75Bookstore 95,000 2.97 63,754.50
Contractor Total 241,058 7.03 132,124.25Total $9,601,870 299.84 $6,414,164.87
Source: Consultant Projections
Total Employment and Earnings Generated by UNA
The University of North Alabama employs a total of 1,092 full-time (recall that part-time
workers are converted to full-time equivalents) staff, students and faculty. Spending by these
workers generates an additional 255.84 full-time jobs in the Colbert/Lauderdale region. In
addition, expenditures by the university and its’ contractors from local vendors accounts for
299.84 more full-time jobs. Thus, the presence of the University of North Alabama generates a
total of 1,647.28 full-time jobs in the study area. These results are summarized in Table 6.
Table 6: Total Employment Generated by UNA
Direct Indirect/InducedSpending Indirect
and Induced TotalUNA 1,043 245.63 292.81 1,581.44Contractors
Food Service 42.90 8.87 4.06 55.82Bookstore 5.70 1.34 2.97 10.01
Contractor Total 48.6 10.21 7.03 65.84Total 1,091.6 255.84 299.84 1,647.28
Source: Consultant Projections
The University’s direct payroll (including contractor’s payroll) totals $39,542,992. The
expenditure of this payroll generates additional earnings for the local economy through
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subsequent rounds which total $13,544,990 (indirect and induced earnings). The University of
North Alabama and its contractors also purchase goods and services from local vendors. These
expenditures total $9,601,870. These dollars are spent and re-spent through subsequent rounds
of economic activity, generating an additional $6,414,164.87 in earnings in the local economy.
Thus, the presence of the University of North Alabama generates a total of $69,104,017 in total
earnings in the study area. These results are summarized in Table 7.
Table 7: Total Earnings Generated by UNA
DirectIndirect/Induced
Direct Spending
Spending Indirect and
Induced TotalUNA $38,597,000 $13,149,998 $9,360,812 $6,282,041 $67,389,851Contractors
Food Service 834,356 368,702 146,058 68,370 1,417,486Bookstore 111,636 26,290 95,000 63,755 296,681
Contractor Total 945,992 394,992 241,058 132,124 1,714,166
Total $39,542,992 $13,544,990 $9,601,870 $6,414,165 $69,104,017Source: Consultant Projections
University Visitors
The University of North Alabama attracts visitors to campus—visitors who spend money
in the local economy. Theatrical and musical performances, sporting events, band camps,
cheerleading camps, sports related camps, and youth events are all held on campus. An estimate
of a portion of the total overall economic impact of university visitors is presented in a
subsequent section of the report. The report is based on detailed surveys and examines in
particular the economic impact of university football. A full analysis of other university events
is not possible because of data limitations. No information is available on for example, visitor
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length of stay and visitor spending behavior, and therefore no attempt is made to estimate the
exact size of economic impact of campus visitors beyond football.
Interviews with UNA personnel provide some, albeit limited, measure of the number of
visitors to campus each year. A total of 3,220 visited campus through the Admissions Office and
for Preview Day. Visitors through University Events totaled 21,200 for the 2010/2011 academic
year. This includes all visitors to Norton Auditorium and the Guillot University Center for
various events during the year as well as numerous summer camps. This total does not include
figures for athletic camps, since those events are not run through University Events. No
information regarding athletic camps was provided for this report.
Attendance and receipts were reported for UNA sporting events. A total of 66,981
people attended various sporting events at the University generating over $205, 000 in gate
receipts. (This represents an almost doubling of gate receipts over the 2007 season). Table 8
provides a breakdown of attendance and gate receipts by sport by 2011.
Table 8: Sporting Events - Attendance and ReceiptsEvent Attendance Gate Receipts
Football 49,164 $170,786Basketball 10,800 26,288Baseball 3,113 5,028Softball 408 1,337
Volleyball 3,496 1,824Total 66,981 $205,263
Source: UNA Survey Results
IMPACT OF FACULTY, STAFF AND STUDENTS
Estimating the impact of faculty, staff and student expenditures in the region requires
specific information on household characteristics and spending patterns of each group. To obtain
this information, UNA employees and students were asked to complete a survey. There were
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one-hundred seventy responses from students and one-hundred thirty-six responses from
employees. The respondents reflected a representative mix of the overall makeup of the
University’s student body and employees. Significant characteristics of faculty, staff, and student
populations are examined first.
Faculty, Staff, and Students
The following characteristics describe specific responses from respective surveys and do
not represent estimates for the total employee and/or student population. Among employees,
seventy-nine (60.8%) would not be living in the Shoals area if UNA were located elsewhere.
One-hundred eleven students (65.3%) responded similarly. This is further reflected in the fact
that 69.8% of students have parents living outside of the Shoals, and 59.1% of student
respondents are living in the Shoals specifically to attend UNA. Only 23.2% of students live at
home with their parents. More than 94% of responding employees live in the Colbert/Lauderdale
county area. A large majority (90.2%) of responding employees are homeowners, while only
9.0% rent. Excluding students who reside with their parents, 50.4% of student survey
respondents indicate that they rent housing, while 21.5% are homeowners and 23.0% live in
campus housing.
In addition to descriptive characteristics, survey results are utilized to calculate
population estimates and spending patterns for the entire employee and student populations at
UNA. Unless otherwise noted, all remaining estimates in this section are considered to be
representative of total faculty, staff, and student population behavior.
With respect to household information, there are 1,604 projected adults and 586 children
living in employee households. Of the children, 276 attend public school in the Shoals, and 45
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attend private school. Projected student household totals are 19,998 adults and 4,817 children. Of
the children, 1,563 attend public school in the Shoals, and 85 attend private school. Total annual
private school tuition paid by employee and student households is $229,562 for the 130 children
attending private schools. The following section details income and spending estimates for
university employees and students.
Faculty, Staff, and Student Income and Spending Patterns
Over the past year, total payroll for employees was $38,597,000 and students earned a
total net income of $95,416,344. Additional annual net income for family members of employees
and students totaled $133,893,216. Adjusting employee payroll for taxes, retirement, insurance
and other deductions, employee and student households earned in excess of $249 million in net
income during 2011. Households spend this income to purchase goods and services, make
mortgage and car payments, pay the private school tuition discussed above, etc., as well as
paying sales and property taxes. Households will also save a portion of their net income.
Employee and student surveys asked respondents to provide details concerning their spending
habits in the Colbert/Lauderdale county area for 2011. Estimates for total spending by category
are provided in Table 9.
Examination of Table 9 indicates that, excluding private school tuition, employees and
students at UNA spent in excess of $121 million in the local impact area. Housing and Shelter is
the largest expenditure category, totaling more than $27.6 million. As a group, the employee and
student homeowners spent an average of almost $30 million on new home construction and/or
purchases in 2011. Transportation expenditures constitute the second largest spending category
with the total exceeding $26.8 million. More than 53% of transportation expenditures result
from 258 employees and 8887 students purchasing new or used vehicles last year, spending a
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total of over $14 million. Expenditures on utilities totaled $14.9 million, while grocery
purchases were slightly more than $14 million. Charitable contributions from UNA personnel
and students were over $4.7 million.
Table 9: Employee and Student Spending Estimates
Business Category Annual SpendingHousing/Shelter $27,600,003Utilities $14,923,415Household Furnishings $1,151,983Groceries $14,321,627Restaurants $6,166,150Healthcare $2,268,862Apparel $3,186,540Transportation (vehicle, maintenance) $26,872,622Recreation and Entertainment $3,196,592Personal and Business Services $1,405,672Religious and Charitable Contributions $4,722,022Personal Insurance $10,610,113Other Retail $4,586,743
Total Spending $121,012,344Source: Consultant Projections
It is important to note that expenditure levels from Table 9 represent only the direct or
initial round of expenditures in the local economy. As is the case with local spending by UNA
and university contractors, spending within a given region becomes incomes for others, and these
individuals in turn spend a portion of their income on goods and services. Thus, spending by
UNA employees, students and other household members generates additional earnings and
employment opportunities in the area. Indirect employment and earnings are again estimated by
utilizing appropriate BEA multipliers. The most appropriate multipliers are determined by
matching spending categories from Table 9 with BEA industry classifications for the
Colbert/Lauderdale County impact area.
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Thus far, estimates of indirect/induced employment and earnings have ignored spending
by students and by household members of both employees and students. These estimates are
created by combining survey responses and consumption patterns from the Consumer
Expenditure Survey (CEX), produced by the Bureau of Labor Statistics. Survey results indicate
that total student income is $95.4 million. Additional household income of both employees and
students is in excess of $133.8 million. This yields total additional household and student
income of $229.2 million.
Applying an average employment multiplier, student and additional household spending
and subsequent rounds of spending in the local economy generate 2,785.28 indirect/induced jobs.
Earnings multipliers suggest that these jobs inject $90,164,519 in indirect/induced earnings into
the impact area.
Combining these estimates with employee payroll impacts yields total employment of
4,432.86 and total earnings of $159,268,536. (It should be noted that these estimates are made by
assuming that all spending takes place in the Colbert/Lauderdale county impact region. Any
spending that takes place outside of the region then reduces employment and earnings estimates.)
Any income not spent is retained in the form of personal saving. The amount of saving
for employees and students at the local level is estimated by examining average monthly
checking and savings account balances with local financial institutions. These funds are
available to the local market for loans for home construction, automobile financing, new and
expanding business firms, and other expenditures that provide additional indirect benefits to the
local economy. Checking and savings account balances are estimated from survey results, and
are given in Table 10.
Table 10: Funds Deposited with Local InstitutionsChecking 7,078,090
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Savings 16,735,049Total $23,813,139Source: Consultant Projections
Service to Community
Many UNA employees and their families are heavily engaged in community service. Of
the 137 respondents, there are 110 memberships/active participations in community
organizations, including: civic clubs, other service organizations, serving on boards of directors,
community or governmental organizations, school boards, and helping with youth activities.
The spouses of respondents have 45 such memberships/active participations. Each activity
requires a time commitment.
The average amount of time employee respondents devoted to community service
activities is more than fifteen hours/month, while it is over nine hours for spouses. The average
monthly time allotments for service activities are summarized in Table 11.
Table 11: Average Community Service Hours per Month
Category Employee SpouseCivic Clubs 0.61 0.16Other Service 2.70 0.63Board of Directors 0.43 0.10Community/Government 0.50 0.40School Boards 0.18 0.45Youth Organizations 1.20 1.00Church 8.90 6.40Other Service 0.90 0.30Total 15.42 9.44Source: Survey Results
Extrapolating the average community service hours per employee to total University
employment allows us to estimate how many total hours UNA employees volunteer per month.
Unfortunately, total spouse volunteer hours cannot be captured as the total number of spouses
22
cannot be ascertained via the Employee Survey. Table 12 indicates that employees generate
more than 13,100 community service hours per month. On a yearly basis, UNA employees
provide various community organizations with 158,000 hours of service. Furthermore, each
spouse of a university employee adds 113 hours of service per year to this total.
In addition to the time spent in service to the Shoals community, employees and their
families serve in leadership roles within their organizations. Among respondents, 44 employees
and 12 spouses hold leadership positions (president, vice-president, secretary, treasurer, etc.)
within their organizations. Additionally, 11 employees and 6 spouses hold leadership positions
in local churches, two employees and two spouses are leaders in youth activities, and 25
employees and seven spouses hold leadership positions in other community service
organizations.
Table 12: Total Monthly Community Service Hours
Category EmployeeCivic Clubs 520.64Other Service 2,304.45Board of Directors 367.01Community/Government 426.75School Boards 153.63Youth Organizations 1,024.20Church 7,596.15Other Service 768.15Total 13,160.97Source: Consultant Projections
Using total income of the faculty, the staff and the students at the University of North
Alabama enables the calculation of total giving to charity. Applying charitable giving estimates
provided by the Consumer Expenditure Survey (CEX) for the Southern Region to both direct
earnings results in total charitable giving of $4,005,903. It is estimated that indirect/induced
23
earnings generate an additional $2,015,580. Total giving as a result of the existence of the
University of North Alabama is $6,021,483.
Taxes Generated in the Local Economy
Estimates of both property tax collections and personal property tax collections in Colbert
and Lauderdale Counties were obtained through the administration of a survey. This information
is reported in Table 13. Total real estate taxes amounted to $1,070,601 and total personal
property taxes amounted to $879,272.
Table 13: Local Property TaxesReal Estate Personal Property Total
Colbert Employee 170,180 72,868 $243,048Student 328,287 69,847 $398,134
Lauderdale Employee 539,132 509,387 $1,048,519Student 33,002 227,170 $260,172
Total $1,070,601 $879,272 $1,949,873Source: Consultant Projections
Utilizing payroll information from employees, students and household members, sales tax
collections in the local area are estimated. Employee payroll information is reported in Table 2
of the report. Student and family member incomes were collected by survey and reported in the
previous section. The summation of these yields total direct earnings of more than $268.8
million. Using CEX consumption patterns, the portion of total income devoted to taxable
consumption is $63,146,743. Applying the average tax rate in the two-county region, 4.75%, to
this amount yields total sales tax collections of $2,999,470.
Total direct earnings generate more earnings in the impact region through the multiplier
process. Applying the earnings multiplier to total direct earnings results in indirect/induced
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earnings. Of this amount, CEX consumption data suggests, $24,829,299 will be devoted to
consumption that is subjected to sales taxes. Using the average sales tax rate in the two county
region yields sales tax collections of $1,179,392. Thus, total sales tax collections in 2011 as a
result of spending by households both directly and indirectly related to UNA equal $4,178,862.
This information is summarized in Table 14.
Table 14: Total Local Sales TaxesDirect Indirect Total
Taxable Sales 63,146,743 24,829,299 $87,976,042
Direct Indirect TotalSales Taxes 2,999,470 1,179,392 $4,178,862
Source: Consultant Projections
Table 15 summarizes total local taxes5 collected as a result of activities resulting from the
existence of UNA. Summing total real estate taxes, total personal property taxes and total sales
taxes yields total local tax collections of $6,128,735.
Table 15: Total Local Taxes CollectedAmount
Total Real Estate Taxes 1,070,601Total Personal Property
Taxes 879,272Total Property Taxes 1,949,873
5 It is worth noting that a portion of taxes at the state and national levels return to the local economy in various forms (i.e. teacher salaries, highway construction and maintenance, transfer payments of various types, etc.). However, it is impossible to estimate the exact percentage of state and national tax dollars collected from the impact area as a result of the university that are returned to Colbert and Lauderdale counties and therefore these values are noted but not included in this analysis.
25
Direct Sales Taxes 2,999,470Indirect Sales Taxes 1,179,392Total Sales Taxes 4,178,862
Total Local Taxes$6,128,73
5
Degree Earnings Premium
In terms of economic impact, the purpose of the service provided by UNA is the
enhancement of human capital. This contribution to worker quality (enhanced human capital)
results in an increase in the productivity of students after graduation. In this respect, educational
institutions are more than job creators for the employees and the suppliers of the school, they are
also contributing to work force efficiency each time a graduate enters the labor force. This
increased productivity of graduates can be estimated by comparing the earnings of individuals
who hold a college degree with individuals who do not hold a college degree.
The increase in total productivity that results from an extra year of education can be
estimated. The gains result from two complimentary effects: gains attributable to improved
worker quality and productivity gains from the worker’s ability to use available physical capital
more effectively. Research on the experience of the United States from 1840 to 2000 indicates
that an additional year of education affords workers an eight to ten percent productivity gain with
an additional two to four percent productivity gain resulting from workers using capital more
effectively. In total, the productivity gain for an extra year of schooling is approximately 12
percent.6
Workers with college degrees enjoy higher salaries. Researchers Anthony P. Carnevale,
Stephen J. Rose and Ban Cheah of the Georgetown University Center on Education and the 6 INCOME AND EDUCATION OF THE STATES OF THE UNITED STATES: 1840-2000, Scott Baier,
Sean Mulholland, Chad Turner and Robert Tamura, Working Paper 2004-31. Federal Reserve Bank of Atlanta, 2004.
26
Workforce7 estimate the premium paid for educational attainment across a worker’s expected
career in their paper, “The College Payoff—Education, Occupations and Lifetime Earnings.”
Their work suggests a significant lifetime earnings difference based on educational attainment.
Table 16 provides estimates of lifetime earnings based on schooling.
The earnings presented in Table 16 are for the total U.S. economy and do not necessarily
reflect Alabama earnings estimates. Alabama salaries are generally lower than U.S. averages.
However, the education premiums are reported as the difference in earnings for various levels of
educational attainment. Thus, it is possible and perhaps likely that the lower high school
graduate earnings in Alabama and the lower bachelor’s graduate earnings in Alabama retain a
difference similar to those reported in Table 16.
Table 16: Lifetime Earnings by Level of Education
Highest Degree Career EarningsNot High School Graduate $973,000
High School 1,300,000Some College 1,550,000
Bachelor's Degree 2,270,000Master's Degree 2,670,000
Source: Carnevale, Rose, and Cheah (2011)
Earnings premiums for UNA graduates are calculated using high school graduation as the
base case. The earnings premium for a bachelor’s degree is $970,000 and the earnings premium
for a master’s degree is $1,370,000. These premiums suggest that each UNA graduate with a
bachelor’s degree, who remains in the Colbert/Lauderdale County impact area, has almost $1
million in additional lifetime earnings to spend or save than a high school graduate who lives in
the local impact region. A graduate that remains in the local economy and possesses a master’s 7 In a report titled, “The College Payoff – Education, Occupation and Lifetime Earnings”
27
degree has almost $1.4 million in additional lifetime earnings over and above a high school
graduate to impact the local economy.
Recall that CEX estimates for the Southern Region of the United States assert that
75.16% of total income is devoted to consumption and of this amount, 31.25% is devoted to
items subject to sales taxes. Applying this to the lifetime earnings premium (bachelor’s degree
over and above a high school graduate) of a single individual that remains in the local economy
yields $729,052 in additional consumption. $227,828.75 of lifetime earnings premium will be
devoted to consumption that is subject to the sales tax. Thus, a bachelor’s degree earning
individual will pay $10,821.86 in sales taxes over and above what a high school graduate pays
(assuming a sales tax rate of 4.75%, an average tax rate for the four municipalities and the two
counties, and that all spending takes place in the impact area).
Using the same CEX data but applying it to the earnings premium of a single individual
that remains in the area with a master’s degree over and above a high school graduate that
remains in the area yields $1,029,692 in additional consumption. $321,778.75 of the lifetime
earnings premium will be devoted to consumption that is subject to the sales tax. Thus, a
master’s degree earning individual will pay $15,284.49 in sales taxes over and above what a high
school graduate pays (again assuming a sales tax rate of 4.75% and that all spending is in the
impact area).
CEX data also allow for the estimation of the amount of the lifetime earnings premium
that is given to charity. During their careers, those individuals earning a bachelor’s degree
devote $14,453 to charity over and above what a high school graduate donates and those
individuals earning a master’s degree devote $20,413 to charity over and above what a high
school graduate donates.
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Indirect employment and earnings associated with degree earning premiums are
estimated by applying RIMS II multipliers for the Colbert/Lauderdale impact area.8
The spending of the earnings premium of a single bachelor’s degree earning graduate
residing in the local area is expected to generate 8.85 indirect jobs and $286,663.24 in indirect
earnings over a 40 year career. The spending of the earnings premium of a single master’s
degree earning graduate residing in the local area is expected to generate 12.51 indirect jobs and
$404,874.89 in indirect earnings over a 40 year career. The total employment and earnings
impact of the earnings premium in the local area would be the sum of the effect of each graduate
who remains in the impact area after graduation.
Although this report specifically focuses on how the local economy is impacted by UNA,
earnings premiums still exist when a UNA graduate moves outside the Colbert/Lauderdale
County area. Degree earnings premiums follow graduates over their entire careers, regardless of
where they reside and generate jobs and income in those areas. Using premium estimates from
Table 16 and graduation totals for the university, located in Table 179, the total earnings
premium for UNA graduates from 2000-2009 may be estimated. Examination of Table 17
reveals that between 2000 and 2009, UNA matriculated 8,477 undergraduate students and 3,333
graduate students.
Table 17: Total UNA Graduates 2000 - 2009Calendar Year Undergraduate Graduate Total
2000 790 276 1,0662001 809 219 1,0282002 853 246 1,0992003 803 211 1,014
8 See Footnote 3 for a discussion of the calculation of indirect employment and indirect earnings are calculated. The average employment and earnings multipliers for all industries in the Colbert/Lauderdale County impact area are 12.69 and 0.3932 respectively.
9 Source: UNA Institutional Data Book
29
2004 818 258 1,0762005 823 258 1,0812006 822 353 1,1752007 888 470 1,3582008 991 548 1,5392009 880 494 1,374Total 8,477 3,333 11,810
Source: UNA Institutional Data Book
Table 18 provides estimates of total earnings premiums for all graduates from 2000-2009.
This is constructed by multiplying the number of graduates in each category by their respective
premium. Results suggest that the total degree earnings premium of UNA students who
graduated in this time frame approaches $13 billion.10 Again, such contributions are in excess of
contributions made by the earnings of high school graduates. Applying employment and
earnings estimates per graduate reveals that earnings premiums of UNA graduates support
almost 116,700 jobs and more than $3.8 billion in indirect earnings over the career of the nearly
12,000 graduates from 2000 – 2009.
Table 18: Total Earnings Premiums 2000 - 2009
YearUndergraduate
PremiumsGraduate Premiums Total Premiums
2000 $766,300,000 $378,120,000 $1,144,420,0002001 784,730,000 $300,030,000 1,084,760,0002002 827,410,000 $337,020,000 1,164,430,0002003 778,910,000 $289,070,000 1,067,980,0002004 793,460,000 $353,460,000 1,146,920,0002005 798,310,000 $353,460,000 1,151,770,0002006 797,340,000 $483,610,000 1,280,950,0002007 861,360,000 $643,900,000 1,505,260,0002008 961,270,000 $750,760,000 1,712,030,0002009 853,600,000 $676,780,000 1,530,380,000Tota $8,222,690,000 $4,566,210,000 $12,788,900,000
10 An estimate of this nature should be viewed in light of the assumptions involved in the calculation, so that the reader can understand the degree to which the actual outcomes may differ from the estimated outcomes.
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l
Attendance, Accommodations and Spending—UNA Home Football Games
A total of 49,164 individuals attended UNA home football games during the 2011 season.
Based on two surveys administered during the season, it is estimated that approximately 13,384
of the total number of attendees were students, approximately 5,355 were parents, approximately
8,762 identified themselves as alumni and approximately 13,630 were fans. 8,033 were
identified in an “other” category.11
Event Spending Projections (based on survey results)
Projections from survey results suggest that approximately 3,041 hotel rooms were rented
during the season by those attending games. Among the categories of attendees, those
identifying themselves as “fans” and “alumni” rented the largest number of rooms. Hotel
receipts totaled $349,132 as a result of University of North Alabama football games.
The survey also captured expenditures at the event. Total spending on food at the game
is estimated to be $761,420, while spending on clothing amounted to $376,428. Expenditures on
various souvenirs totaled $319,502, and $302,243 in an “other” category. Thus, total
expenditures at the event excluding the ticket price (see Table 8 for gate receipts) equal
$1,759,593 for the 2011 football season.
Outside Event Spending Projections (based on survey results)
Football attendees also spend dollars in the local economy outside of the event. Survey
respondents were asked to identify expenditures on various items in the local economy including
fuel, food, clothing, souvenirs and, once again, an “other” category.
11 Totals were generated by observing the behavior of each attendee category and calculating averages. The averages were next multiplied by the total number of attendees in each of the 5 categories.
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Total expenditures on fuel by football attendees amounted to $1,186,733. Total spending
on food by those attending home games totaled $812,520. Attendees at the games report in the
survey that $458,307 was spent in the local economy, while shopping for clothing and an
additional $331,882 was spent on various souvenirs. Finally, survey respondents claimed
$424,113 was spent on “other” items from the local economy. Thus, total spending by those
attending the football game amounted to $3,213,555.
Total Spending
Summing expenditures for hotel rooms, expenditures at the event and expenditures in the
impact area, because of football game attendance, yields total spending of $5,322,280. This
information is summarized in Table 19.
Indirect/Induced Effects
This spending by football attendees in the local economy becomes income for workers in
the Colbert/Lauderdale impact area. When these workers spend their earnings, additional
income for other workers is generated. Subsequent rounds of expenditures create more income
so that the initial spending is multiplied. Thus, the initial round of spending creates additional
income and additional jobs in the local economy.
To capture the secondary effects of attendee spending, RIMS II multipliers are utilized.
Multipliers were selected to match the type of expenditures made by those attending football
games; in particular an “accommodation” multiplier, a “spectator sport” multiplier and a “retail
spending” multiplier.
Indirect jobs and indirect earnings that result because of football attendee expenditures on
lodging total 5.64 jobs and $130,016.69 respectively. Spending by football attendees at the event
generated 27.37 indirect jobs and $809,060.72 in indirect earnings. Finally, indirect jobs and
32
indirect earnings that result because of football attendee expenditures in the community total
60.64 indirect jobs and $1,543,792.01 in indirect earnings.
The total impact of football attendee spending supports 93.66 indirect jobs and creates
$2,482,869.43 in indirect earnings.
Taxes are collected in the impact region due to the existence of home football games
played by the University of North Alabama. Taxable expenditures in the community on food,
clothing and souvenirs by those individuals attending games equal $1,602,709. This spending
generates subsequent rounds of spending and through the multiplier process results in an
additional $583,164 in indirect taxable sales (CEX data utilized to estimate taxable sales). Thus,
total taxable sales in the area as a result of football equal $2,185,873. Subjecting this amount to
the two-county average sales tax yields $103,828.96 in sales tax collections.
Additionally, $38,405 is collected from lodging taxes in the impact region according to
survey estimates (based on 11% lodging tax rate in Colbert/Lauderdale region).
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Table 19: Attendance, Accommodations and Spending for 2011 UNA Home Football Games
Students Parents Alumni Fans Other Totala
Attendance 13,384.05 5,354.60 8,762.10 13,629.90 8,032.50 49,164Accommodations
Overnight Stays 2,883.54 803.25 1,632.35 1,703.91 1,004.06 8,027.12Staying with Family/Friends 870.08 803.25 0.00 296.33 0.00 1,969.67
Staying at a Hotel 580.06 267.75 1,681.82 2,074.33 1,757.11 6,361.06Rooms Rented 290.03 267.75 840.91 889.00 753.05 3,040.73Nights Stayed 580.06 267.75 1,121.21 889.00 1,004.06 3,862.08
Hotel Rent $52,437.00 $24,204.60 $101,357.58 $80,365.40 $90,767.25 $349,132
Event Spending Food 167,226.84 96,146.59 134,638.89 238,295.32 125,112.27 $761,420
Clothing 168,532.44 25,557.95 71,944.44 92,137.49 18,255.68 $376,428Souvenirs 148,705.09 40,162.50 51,388.89 71,942.97 7,302.27 $319,502
Other 131,356.16 34,077.27 56,527.78 66,894.34 13,387.50 $302,243Total Event Spending $1,759,593
Community SpendingFuel 370,523.52 156,825.00 149,027.78 318,063.67 192,293.18 $1,186,733
Food 338,304.08 102,510.00 105,347.22 199,420.87 66,937.50 $812,520Clothing 255,277.07 38,250.00 55,243.06 102,234.75 7,302.27 $458,307
Souvenirs 168,532.44 19,125.00 34,687.50 102,234.75 7,302.27 $331,882Other 204,469.50 49,725.00 60,381.94 102,234.75 7,302.27 $424,113
Total Community Spending $3,213,555
Total Spending $5,322,280Source: Consultant Projections from Surveys collected at two UNA home football games during 2011 season.
a - sum may not equal total due to rounding
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Note on Results
The last UNA economic impact study was completed in 2008, and used data from 2007.
Much has changed since then, both at UNA and in the world in general. The numbers in the
current study are reflective of this reality. The economic crisis of 2008 had several major
impacts, including: fewer home purchases, decreased household spending in general, decreased
car travel, and increased unemployment. Changes at UNA include: a 70% decrease in
international student enrollment, changes in student employment opportunities (both on and off
campus), increased tuition, and decreased state funding.
The effects of these changes are to be expected. The overall impact of the University of
North Alabama in the Shoals increased in some categories, while decreasing in others. The
overall impact remains strong, both economically and with respect to community service.
Providing services such as continuing education also has an impact on the overall education of
the nonstudent population. These are among the many reasons people tend to prefer to live in or
close to college towns.
36