the economic impact of guilford county schools and the 2008 bond referendum
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The Economic Impact of Guilford County Schools and the 2008 Bond Referendum. Dr. Andrew Brod Center for Business and Economic Research Bryan School of Business and Economics University of North Carolina at Greensboro Email: [email protected] Web: http://cber.uncg.edu. April 2008. - PowerPoint PPT PresentationTRANSCRIPT
The Economic Impact of Guilford County Schools and the 2008 Bond Referendum
Dr. Andrew BrodCenter for Business and Economic ResearchBryan School of Business and EconomicsUniversity of North Carolina at GreensboroEmail: [email protected]: http://cber.uncg.edu
April 2008
• CBER is the main contact point at UNCG for economic-development research
• Contract research– Economic-impact analyses– Surveys– Industry profiles– Regional profiles– Econometrics, data mining… and more!
• Public education
About CBER
What is Economic Impact?
• An activity (e.g. hiring or spending) begets more activity.– Which begets more activity, which begets more…– A chain reaction of hiring or spending– Add up all the chain reactions: a multiplier effect
• Three components of economic impact:– Direct: The initial activity– Indirect: Business-to-business linkages– Induced: Business-to-household linkages– Add these up to get the total economic impact
What is Economic Impact?
• Economic impact can be measured in various ways:– Final demand (akin to gross sales revenue)– Value added (akin to GDP, GSP)– Employment (total FT + PT, not FTE)– I’ll focus on final demand and employment
• Needed for this study:– Regional economic data from IMPLAN– Specific data and information from GCS, focusing
on 2006-07 fiscal year
Sources of Economic Impact
• Three sources in this study:– GCS operations
• Subset: operations of academies– Improved educational outcomes since 2000
• Lower drop-out rate• Increase in college scholarships• Increase in AP credits earned
– School bonds• 2000 and 2003• Projection of 2008, if approved• Subset: contracts awarded to MWDBEs
• Fiscal impacts expressed in 2006 dollars
Impact Region
Indicator Value
Area (square miles) 650
Population 451,905
Employment 363,241
Number of Households 192,664
Total Personal Income (millions) $15,984
Average Income per Household $82,964
Guilford County, 2006
Source: 2006 IMPLAN data
Impact of GCS Operations
Institution Direct Indirect Induced Total
GCS 744.1 215.7 306.3 1,266.1
Academies 10.3 2.6 3.7 16.6
Final Demand ($ millions)
Institution Direct Indirect Induced Total
GCS 10,599 1,746 3,032 15,377
Academies 127 21 36 184
Employment (jobs)
Note: Implied multiplier for GCS ops = 1.70
Improved Educational Outcomes
• Lower Drop-Out Rates:– Drop-out rates not the same as the graduation
rates that have been in the news– Drop-outs have lower incomes, higher rates of
unemployment, pay less taxes, etc.– Rate in 2000 = 5.97%, rate in 2006 = 2.99%
• Decline of 2.98 percentage points• Implies 655 students did not drop out in 2006
– Economic impact via…• Reduced Medicaid costs• Reduced incarceration costs• Other mechanisms not considered in this study
Improved Educational Outcomes
• Lower Drop-Out Rates:– Implies total savings in 2006 of $784,445 in
Guilford County.– An implicit grant to county government, and
hence to taxpayers– Money freed up for other uses
• Increased scholarships to GCS seniors:– Total in 2000 = $31.0 million; total in 2006 =
$68.1 million– Increase of $37.2 million– Direct grant to households
Improved Educational Outcomes
• More AP credits earned– 1,650 AP exams earned scores of 3+ in 2000– 3,897 AP exams earned scores of 3+ in 2006
• Increase of 2,247 successful exams– 3 college credits– Weighted average of 3 college credits (based on
school types and GCS seniors’ choices) is $1,844– Total implied savings = $4.1 million in 2006– Implicit grant to households
Impact of Improved Outcomes
Outcome Direct Indirect Induced Total
Lower DO Rate 0. 8 -0.2 0.5 1.1
Higher Sch & AP 41.3 6.2 6.0 53.6
Final Demand ($ millions)
Outcome Direct Indirect Induced Total
Lower DO Rate 7 -4 7 9
Higher Sch & AP 279 41 71 391
Employment (jobs)
Comprehensive Impact of GCS
• Sum of…– Impact of operations– Impact of lower drop-out rate– Impact of increased scholarships & AP credits
• In 2006-07…– Final-demand impact of $1.32 billion– Employment impact of 15,777 jobs
• Compares to other recent CBER EIAs:– MCHS, 2003: $1.48 billion, 16,322 jobs– Furniture Mkt, 2003: $1.07 billion, 13,038 jobs– UNCG, 2006: $1.22 billion, 13,520 jobs
Impact of Bonds
• Bonds:– 2000: $200 million– 2003: $300 million– 2008: $412 million and $45 million (proposed)
• Impacts from construction, design, purchasing
• Contracts awarded to MWDBEs:– 11.3% of contracts awarded in 2000 and 2003
bonds; goal of 12.5% for 2008 bonds
• Details:– All-in-one-year assumption– Subtract out land purchases– Fiscal impacts in 2006 dollars
Impact of Bonds
Bond Direct Indirect Induced Total
2000 209.4 46.5 54.7 310.6
2003 316.9 72.9 86.7 476.5
2008: Total 428.7 103.7 124.4 656.8
2008: E.Guilford 42.9 10.7 12.9 66.5
Final Demand ($ millions)
Impact of Bonds
Bond Direct Indirect Induced Total
2000 1,822 450 541 2,813
2003 2,862 714 859 4,434
2008: Total 3,980 1,027 1,231 6,238
2008: E.Guilford 411 106 127 645
Employment (“job-years”)
Impact of Bonds: MWDBEs
Bond Direct Indirect Induced Total
2000 14.0 3.7 4.5 22.1
2003 34.0 9.0 10.8 53.8
2008: Total 47.3 12.7 15.3 75.4
2008: E.Guilford 21.5 5.8 7.0 34.3
Final Demand ($ millions)
Impact of Bonds: MWDBEs
Bond Direct Indirect Induced Total
2000 148 36 44 229
2003 357 89 107 554
2008: Total 490 126 152 769
2008: E.Guilford 223 58 69 349
Employment (“job-years”)
The Economic Impact of Guilford County Schools and the 2008 Bond Referendum
Dr. Andrew BrodCenter for Business and Economic ResearchBryan School of Business and EconomicsUniversity of North Carolina at GreensboroEmail: [email protected]: http://cber.uncg.edu
April 2008