The Economic Impact of James Madison University on the Harrisonburg Metropolitan Area and Commonwealth of Virginia Terance J, Rephann, Ph.D. May 2016 2 The Economic Impact of James Madison University on the Harrisonburg Metropolitan Area and Commonwealth of Virginia Terance J. Rephann, Ph.D. Weldon Cooper Center for Public Service May 2016 Copyright © 2016 by the Rector and Visitors of the University of Virginia P.O. Box 400206 Charlottesville, VA 22904 (434) 982-5522 • FAX: (434) 982-5524 • TDD: (434) 982-HEAR Website: www.coopercenter.org/ Richmond 11 South 12th Street, Suite 225 Richmond, VA 23219-4035 (804) 371-0202 • FAX: (804) 371-0234 • TDD: (804) 982-HEAR Southwest One College Avenue Wise, VA 24293 (276) 328-0133 • FAX: (276) 328-0233 • TDD (540) 328-0191 ii TABLE OF CONTENTS List of Figures ..........................................................................................................................................iv List of Tables ............................................................................................................................................. v Acknowledgements .................................................................................................................................vii Executive Summary .................................................................................................................................. 1 Introduction ............................................................................................................................................. 7 James Madison University Characteristics and Growth ........................................................................... 9 Methodology and Data ............................................................................................................................ 15 Economic Impact Results ....................................................................................................................... 19 Other Economic and Social Contributions ............................................................................................. 23 References .............................................................................................................................................. 33 Appendix A. Input Data Preparation ...................................................................................................... 35 iii LIST OF FIGURES Figure 1.1 Fall Enrollment by Year, 1992-2014 ....................................................................................10 Figure 1.2 University Operating Revenues (2015 Dollars) by Source, 2004-2015 ..............................12 Figure 1.3 Campus Landscape ..............................................................................................................12 Figure 1.4 Capital Outlay Project Expenses by Year, FY 2010- FY 2015 ............................................13 Figure 4.1 University STEM-H Graduates as a Percentage of Total, 2005-2015 .................................24 Figure 4.2 Number of University Academic Articles by Year, 1990-2014 ..........................................29 Figure 4.3 University Industry Sponsored Program Funding, FY 2011-FY 2015 ................................31 iv LIST OF TABLES Table 1.1 Fall 2014 Enrollment Demographic Characteristics .............................................................. 11 Table 1.2 University 2016-2018 Biennial Projects, A/E and Construction ...........................................14 Table 2.1 University Spending by Major Category and Location, FY 2015 .........................................16 Table 2.2 Local and State University Spending by Component, FY 2015 ............................................17 Table 3.1 Economic Effect of University Spending on Local and State Economies, FY 2015 .............19 Table 3.2 University Expenditures in Harrisonburg Metropolitan Area by Component, Growth and Jobs, FY 2009-2015........................................................................................20 Table 3.3 University Expenditures in State by Component and Jobs, FY 2015 ....................................20 Table 3.4 State and Local Tax Revenue Impacts, FY 2015 ...................................................................20 Table 3.5 University Economic Impacts for Harrisonburg Metropolitan Area, FY 2005, FY 2010, and FY 2015 .......................................................................................................21 Table 4.1 Industry Employment Program Preparation ..........................................................................24 Table 4.2 Community Service Participants and Service Hours by Department/Office, 2013-14 ..........25 Table 4.3 Non-local Visitors by University Function, FY 2015 ............................................................32 Table A.1 Operational Expenditures by IMPLAN Sector and Location ................................................36 Table A.2 Capital Planning and Construction Expenditures by IMPLAN Sector and Location ............38 Table A.3 Health Care Insurance Related Expenditures by IMPLAN Sector and Location ..................39 Table A.4 Student Cost of Attendance, FY 2015 ....................................................................................39 Table A.5 Student Expenditures by IMPLAN Sector .............................................................................41 Table A.6 Student Visitor Expenditures by IMPLAN Sector and Location ...........................................41 v vi ACKNOWLEDGEMENTS This study is the fifth economic impact study that student personal expenditure allowances used to has been conducted for James Madison University compute the university Cost of Attendance. Gary (JMU) over the last two decades, and the first one Shears and Debbie Gordon from the Department of since fiscal year 2009. Chuck DeHart, former Assis- Engineering and Construction gave detailed infor- tant Director of Institutional Research at JMU, au- mation about previous and planned capital project thored the previous three studies, with Tim Kestner, outlays, and Charlie Newman of Procurement Ser- an economist with the Virginia Employment Com- vices furnished data on the geographical location of mission performing the IMPLAN modeling. Since university capital project sub-contractors. Mr. Rich that study was published, university enrollment has Harris, Director of Community Service-Learning, increased by 13 percent and university outlays have Dr. Christie-Joy Brodrick Hartman, Executive Di- grown to over $500 million. Moreover, the univer- rector of the Office of Environmental Stewardship sity has furthered its mission by increasing its focus and Sustainability, and Dr. Nick Swartz, Associate on student, community, and civic engagement as Vice Provost of Research and Scholarship and Di- part of delivering a well-rounded education and in- rector of the Madison Center for Community De- creasing its social and economic impact on the com- velopment, assembled information on university munities it serves. outreach and engagement activities. Geoff Polglase, Deputy Director of Athletics, Ramonna Messenger, The author would like to thank many people for pro- Director of University Events, Steve Smith, Asso- viding data, information, and feedback used in the ciate Vice President for Constituent Relations, and study. Director of Institutional Research, Dr. Frank Michael Walsh, Dean of Admissions, obtained data Doherty, served as project manager for JMU and for university visitors. Mary Lou Bourne described connected me with various departments and centers economic development and technology transfer ac- that were crucial for developing a comprehensive tivities within the region. Mr. Rich Rogness, Tech- picture of the university economic and social im- nology Team Support Leader at the Virginia Retire- pacts. Other Office of Institutional Research staff, ment System and his staff provided information on including Dave Chase, Lou Hedrick, Tina Grace, pension payments made to retired JMU faculty and and Elaine Smith, provided data and other assistance staff who reside in the Commonwealth. for the study. Associate Controllers Mark Angel and Jimmy Rule of the Finance Office provided key in- Additional thanks go to Weldon Cooper Center for formation on university payroll, operations expen- Public Service staff, Mike Phillips, Steve Kulp and ditures, and capital expenditures. Mr. Brad Barnett, Dave Borszich, who assisted with data interpreta- Senior Associate Director of the Office of Financial tion and document design. Any errors or omissions Aid and Scholarships, provided detailed data on are the responsibility of the author. Terance J. Rephann, Ph.D. Regional Economist Charlottesville, Virginia vii viii EXECUTIVE SUMMARY James Madison University (JMU) is a comprehen- meant that the university has had to rely more on sive public university that is part of the statewide tuition payments to fund its operations. Compensa- system of public higher education in the Com- tion expenses (i.e., wages, salaries, benefits), which monwealth of Virginia. From modest beginnings in represented 55 percent of JMU’s total operating 1908 as the State Normal and Industrial School for expenses, are the largest category of expense. Ap- Women at Harrisonburg, the school officially be- proximately three-fourths of JMU’s core expendi- came coeducational in 1966 when it was known as tures are made on instruction and academic sup- Madison College and was re-named in 1977 after