The Economic Impact of the University of New Mexico on …

1 University of New Mexico Bureau of Business and Economic Research The Economic Impact of the University of New Mexico on the State of New Mexico February 2011 University OF NEW Mexico BUREAU OF BUSINESS AND Economic RESEARCH 303 Girard Blvd. NE MSC06 3510 / O ate Hall Albuquerque, NM ii University of New Mexico Bureau of Business and Economic Research The Economic Impact of the University of New Mexico on the State of New Mexico February 2011 Doleswar Bhandari, PhD iii Acknowledgements I would like to acknowledge and extend my thanks to the following persons who have made the completion of this report possible: Julia Fulghum, the UNM Vice President of Research, for encouraging BBER to undertake this study and for providing funding and support.

2 Elizabeth Metzger, Chief Financial and Treasury Officer, UNM for her help in collecting UNM campuses revenues and expenditures data. Michael Duran, Chief Human Resources Operations Officer, UNM Human Resource Department for supplying earnings and benefits data for UNM Main, North, and Branch campuses. Jep Choate, Research and Information Manager and Vice President, UNM Enrollment Management Division for supplying student residency data. John Welty, Vice President for University Development and Administration, UNM Foundation for providing UNM Foundation data. Joseph Eggleston, Financial Analyst, Student Accounts Receivable, UNM for providing tuition data.

3 Lorie Chance, Financial Officer, UNM Capital Projects Office for supplying data on UNM capital projects. Martin James Desautels and Bruce Cherrin from Purchasing Department, UNM for providing in-state and out-of-state purchase information. Thanks are due to Gregory Seyk, HRIS Manager at UNM Hospitals for supplying payroll data for UNM Hospitals employees; Ella B. Watt, Chief Financial Officer of UNM hospitals for providing audit report and answering clarification questions as and when needed; and Lynn Ribble, Director of Human Resource Department, UNM Medical Group for providing employment data.

4 I would like to thank Michael O Donnell, Research Scientist at BBER, who carefully edited the report. I also thank our graduate student employee Scott Maddux for collection and compilation of the data from different sources. Finally, thanks are due to Dr. Lee Reynis, Director of BBER, for her overseeing the overall Economic Impact analysis effort. -Doleswar Bhandari iv Table of Contents EXECUTIVE SUMMARY .. V INTRODUCTION .. 1 METHODOLOGY .. 3 Data .. 3 Method .. 3 INPUTS .. 6 Revenue .. 6 Expenditures .. 7 Employment .. 9 IMPACTS .. 10 Output .. 10 Employment .. 10 Income .. 10 CONCLUSION AND LIMITATIONS.

5 12 v Executive Summary The University of New Mexico is a significant contributor to New Mexico s economy and has a significant Impact resulting directly from its ability to attract out-of-state funds. In fiscal year 2010 UNM operations (and construction), including the UNM campuses, UNM hospitals and UNM Medical Group accounted for $ billion in expenditures and nearly 25,100 jobs (including 638 non-resident jobs). Total salaries and benefits were $ billion. Non-personnel expenditures totaled $833 million. Overall, of UNM s expenditures were supported by out-of-state revenue sources.

6 These outside dollars supported $ million in UNM output, 6,839 jobs and $319 UNM payroll. All this additional spending generated indirect and induced Economic activity, generating approximately $ million in additional Economic activity, $ in additional income and 4,325 additional jobs through indirect and induced Economic activity. The total Economic Impact of the out-of-state dollars UNM brought into New Mexico in fiscal year 2010 amounts to more than $ billion in total output, $ million in income, and 11,164 in jobs. A total of $ was generated in the New Mexico economy for every dollar UNM spent in New Mexico that was supported by out-of-state revenues.

7 1 Introduction The University of New Mexico Office of the President commissioned the UNM Bureau of Business and Economic Research (BBER) to conduct a study of the Economic Impact of the University of New Mexico (UNM) on the economy of New Mexico for the fiscal year 2010. This report contains the results of the study and outlines the data and methods used to arrive at these results. Specifically, this study focuses on the Economic impacts resulting from UNM spending and employment. The computed impacts show how the dollars that flow to UNM from outside of New Mexico (out-of-state) sources support direct spending on salaries, benefits, and goods and services.

8 The impacts also show how spending creates additional, derivative, Economic activity in the state of New For instance, UNM s expenditures on goods and services create indirect effects as the firms supplying UNM purchase supplies from other firms and employ people to produce their products. Part of salaries of UNM employees and UNM vendors are then spent in the community, creating induced effects, causing further demand for goods and services and resulting in more jobs and additional income. The indirect and induced effects, combined with the direct contribution of UNM funded by out-of-state sources, result in the total Economic Impact of the University of New Mexico on the state of New Mexico .

9 However, it is important to note that this is not the maximum Impact from UNM. Impacts of other factors such as encouraging technology development and contributing to an educated workforce are likely to be substantial even if they are less easily quantified. A summary of these impacts can be found in Table Approximately percent of UNM s revenues are from non-New Mexico sources. These out-of-state revenues total $ million (see Table ). Additionally, an estimated 68 percent of UNM s expenditures occur within the state, largely due to in-state employee compensation, and local construction spending.

10 As a result, UNM s success in attracting out-of-state revenues is directly responsible for providing 6,839 jobs, $ million in salaries, and nearly $ million in in-state expenditures. These direct impacts go on to fuel total Economic activity of $ billion in output, $ million in labor income, and 11,160 jobs. Finally, the output multiplier of shows that a total of $ was generated in the New Mexico economy for every dollar UNM spent in New Mexico that was supported by out-of-state revenues. 1 Out-of-state sources include a variety of federal funding sources such as federal grants as well as Medicaid and Medicare.