“Economic Impact” Is Not Why We Support Public Universities

You know it’s time to kick off another legislative session when the North Dakota University System drops a report alleging billions of dollars in economic impacts from spending on the state’s institutions and from the spending of the students/faculty/workers at those universities.

The argument being, I guess, that the more we spend on higher education the more “economic impact” we get. It’s a handy political ploy from a bunch of academics who enjoy posturing themselves as though they’re above politics.

This session is no different. Yesterday the NDUS dropped a press release touting their latest study (conducted by two professors who work for North Dakota universities) claiming $5.3 billion in total economic impact.

[mks_pullquote align=”right” width=”300″ size=”24″ bg_color=”#ffffff” txt_color=”#000000″]When I hear university officials touting the “economic impact” of their institutions, counting up the amount of money spent in restaurants or on apartment rent, I hear public servants with the wrong priorities.[/mks_pullquote]

The full study is below.

There are a number of reasons why we shouldn’t care about it at all.

For one thing, these “economic impact” studies never take into account the economic costs associated with the expenditure of tax dollars. While it’s true that there is commerce created by the universities – the institutions hire people, the students spend money, etc. – counting that up without also estimating the economic cost of diverting hundreds of millions of tax dollars to the university budgets. Even despite a more than 30 percent decrease over the last two budget cycles, in the current biennium general fund appropriations to the state’s universities total $625.9 million.

That money didn’t appear from the ether. It was taken from the taxpayers, and leaving it with the taxpayers would have had an economic impact too. Which isn’t an argument against spending on higher education. Only an illustration of a part of this equation which is conveniently ignored by those touting these studies.

For another, “economic impact” is not why we build universities. They exist not as a government jobs program, or a means to stimulate the local pizza delivery/bar/gas station industry, but to enrich students with education and pursue research as a way to expand our society’s collective knowledge.

When I hear university officials touting the “economic impact” of their institutions, counting up the amount of money spent in restaurants or on apartment rent, I hear public servants with the wrong priorities.

I would much rather the universities kick off each new legislative session by touting what really matters. Such as how many students were able to obtain degrees which were useful to them, or research accomplishments. That would tell me the university system understands their job it to serve those students, and the state in general, as opposed to the more parochial interests of land lords and bar owners.

[scribd id=396743310 key=key-S9VqmpYT2UYzoJ9MgWRu mode=scroll]