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FORT KENT – The University of Maine System is doing good things for Maine’s economy, according to a report presented Monday at the UMS board of trustees meeting in Fort Kent.
For every dollar of state funds it receives, the system generates more than $8 of economic activity in Maine.
“That’s extraordinary by any standard,” UMS Chancellor Richard Pattenaude stated Monday in a press release.
This was Pattenaude’s first meeting as the system’s new chancellor.
“When you factor in the ‘ripple effect’ of those direct expenditures on both nonuniversity employment and related sales of goods and services, the result is $1.5 billion. To put this in context, the University System’s $1.5 billion in economic impact is greater than the record-high worldwide sales [net] that retailer L.L. Bean experienced for 2005,” Pattenaude noted.
Those figures don’t include the indirect economic activity resulting from the outreach work and assistance of UMS institutions to Maine-based businesses and not-for-profit organizations, he said. It also doesn’t reflect the economic impact that the system’s 110,000 in-state alumni have on the local economy through their personal and career activity.
The report was prepared by James Breece, an economist who serves as UMS vice chancellor for academic and student affairs. Breece also serves on the state’s nonpartisan Revenue Forecasting Committee.
The $1.5 billion figure was determined by using a standard model for calculating economic impact, according to Monday’s press release. The model combines the university system’s total operational spending with related consumer spending and applies a multiplier effect to determine economic output.
According to the report, UMS received $184.7 million in state appropriation for the fiscal year that ended June 30, 2006. That amount represented 31 percent of the system’s total revenue.
The remainder of its revenues came from student tuition and fees (30 percent), research and development grants and contracts (22.4 percent); room and board, sales, and services, and other miscellaneous sources (12.4 percent); and gifts, endowments, and investment income (4.1 percent).
In addition to those direct revenues and related expenditures, students and visitors to the universities spent $170.2 million off campus on consumer goods and services such as dining, recreation and transportation.
Along with university-related employment and the salaries and wages it supports, the economic activity generated by UMS stimulated an additional 7,711 nonuniversity jobs throughout Maine.
“These findings are eye-opening,” Pattenaude told trustees. “This new report indicates that, from a purely economic standpoint, the university system’s influence is much broader and more beneficial to our state than many people realize.”
Breece’s report is available online at www.maine.edu/EconomicImpact2007.
Also at Monday’s meeting, Pattenaude presented board members with a set of efficiency initiatives intended to reduce costs, reallocate savings to top-priority areas, and minimize tuition increases.
The five long-term goals outlined for the system are to:
. Ensure student success.
. Enhance Maine’s economy and quality of life.
. Secure a financially sound, high-quality system of universities.
. Advance higher education as a public priority.
. Demonstrate environmental leadership.
Pattenaude told the board he will discuss each initiative further as he visits UMS campuses in the near future.
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