Understanding the Economic Impact of Community Colleges

A recent economic impact study shows Butler Community College helps drive the economy for the 10-county region in southcentral Kansas -- its primary market -- and generates more in tax revenue than it takes. EMSI, a nationally recognized economic analysis partner for higher education completed the study.   

According to EMSI, for every $1 paid in taxes to the college, the college returns $2.30 for the region which includes Butler, Chase, Cowley, Greenwood, Harper, Kingman, Marion, Morris, Sedgwick and Sumner counties. The study, based on data from fiscal year 2018-2019, reviewed three main areas: college operations, student spending and alumni impact.  

The study showed that:

•     Butler added $387.1 million in income to the primary market.
•     Alumni and the productivity of Butler graduates who stay in the region contributed $322.9 million to the economy.
•     The college spends $42.9 million in the region.
•     Students generated $21.3 million in added income for the regional economy through groceries, accommodations, transportation and other household spending.
•     Butler supports 6,311 jobs — one in every 67 jobs in the region.  

Dr. Esam Sohail Mohammad, associate vice president of Research and Institutional Effectiveness for Butler Community College, said studies such as this help taxpayers and college stakeholders better understand the return on investment in education.  

“The primary purpose of the study is to serve as a communication tool between the college and the community,” Mohammad said. “Because Kansas community colleges are supported by local taxpayers, this helps validate that through college operations, classes and opportunities provided to students, and graduates who remain in the region, Butler brings significant value to the county, region, and state’s economy.”    

Additional internal review of the data suggests that the direct impact to Butler County alone is more than $46 million annually, providing a return of at least $2.88 for every dollar invested in the college.

EMSI stated that “the results of this study demonstrate Butler creates value from multiple perspectives. The college benefits regional businesses by increasing consumer spending in the region while also supplying qualified, trained workers to the workforce. Butler enriches the lives of students by raising their lifetime earnings and helping them achieve their individual potential. The college benefits state and local taxpayers through increased tax receipts and a reduced demand for government-supported social services.  

Economic impact studies are detailed examinations that include extensive modeling, Mohammad said. Butler generally completes a study every five to six years with the last study being completed in 2013.   

“Every dollar spent at the college ‘rolls over a few times,’” he said. “This is captured in a quantitative manner to give us a glimpse of what the overall economic impact is.”

EMSI measures not only the economic impact of the college but also its social impact.  

“Butler benefits society as a whole in Kansas by creating a more prosperous economy and generating a variety of savings through the improved lifestyles of students.” Community colleges such as Butler are ‘ramps’ of opportunity to the American Dream. For many, it is the only ramp.”

The study indicated that the state of Kansas will receive an estimated present value of $784 million in added state revenue over the course of the students’ working lives. Kansas will also benefit from an estimated $19.9 million in present value social savings related to reduced crime, lower welfare and unemployment, and increased health and well-being across the state.   

Butler’s economic and social impact “is within the ballpark of how a lot of colleges impact their regions who are similarly situated in terms of enrollment and geographical service area,” Mohammad said.

Many Kansas higher education institutions utilize the expertise of EMSI. Of the 19 community colleges in Kansas, 11 have engaged EMSI for some analysis. Recently the Kansas Board of Regents has considered using EMSI to complete a study of the overall public higher education system in Kansas.