Economic impact study reveals university benefit to EUP and beyond
Posted: October 11th, 2013
SAULT STE. MARIE, Mich. – Each student who attends Lake Superior State University brings $45,000 worth of economic activity to the region, for a total economic impact of $113 million per year, according to a study recently undertaken by an LSSU professor and one of his students.
LSSU professor of business Bob Boston and student Katie Weckesser, a senior finance and economics major from East Lansing, completed the study in the spring and recently presented it to the LSSU Board of Trustees. Boston and David Finley, dean of the LSSU School of Business and Engineering, presented the study to the Sault Ste. Marie City Commission on Oct. 7.
Boston and Weckesser said the study showed that the economic impact of LSSU in the community means the equivalent of 1,400 jobs, or 9 percent of all of the jobs in Chippewa County. The two said the total includes $27 million in wages circulated in the local economy, and $10 million spent by visitors who come to campus to visit students, hold business meetings, and more. Students spend $37 million in tuition, room and board, in addition to food and services in the community.
LSSU senior finance and economics student Katie Weckesser, E. Lansing, and LSSU business professor Bob Boston.
A print-quality version of this photograph is available at this link.
“We’ve had some studies done in the past that have shown how important LSSU is to the region and to the state, but this is the first comprehensive study we’ve had in some time that thoroughly lays out the sources of this economic activity,” said LSSU President Tony McLain. “It demonstrates what happens when the state makes an investment in higher education.”
McLain said the LSSU study will complement a statewide economic study that is being conducted by the Presidents Council of State Universities of Michigan.
“We started this last fall as an experiential learning activity,” said Boston, who has taught at LSSU part-time for several years and was recently hired full-time. “I was hoping that it would not only be a great exercise for Katie, but that it would also provide a benefit to LSSU…What it showed is that LSSU is a major economic anchor that has a great impact on the economy of Chippewa County and the surrounding area.”
The pair broke out the spending in four sources: operating, capital, student and visitor. Weckesser said they used data from LSSU’s 2011-2012 audited financial statements, in addition to interviews conducted with staff and local businesses.
Under operating expenses, Boston and Weckesser said that in addition to the $27 million in wages circulated through the local economy, LSSU generates $12 million in operating supplies that come from local and regional suppliers, supporting the equivalent of 972 jobs.
In capital spending, Boston noted that the coming James Norris Center expansion will be a “good shot in the arm for the community, and a generator of construction jobs and more over 18 to 24 months.” He said the $12 million remodeling and expansion of South Hall, which will house the Lukenda School of Business, will be not only an economic boost, but a great magnet to prospective students.
The study showed that LSSU attracts more than 23,000 visitors to the region annually, accounting for the equivalent of 145 jobs and $10 million in economic activity in local hotels, restaurants and stores.
Boston and Weckesser said the study also looked at “positive externalities” that enrich the local community, including the availability of facilities for community physical fitness and well-being in the Norris Center, and student involvement in local projects and causes. In addition, LSSU facilities such as the environmental analysis and aquatic research laboratories, as well as the product development center, provide a great benefit to the local community and beyond.
“LSSU is a key anchor institution and a vital leader in the fiscal well-being of Chippewa County and the surrounding area,” Boston said. “It represents ‘sticky capital’ – something that has been here, will continue to be here and is one of the area’s best opportunities for providing additional economic development.”
Weckesser told the LSSU Board of Trustees that the study was constructed so that it may be updated periodically with current data.
LSSU Trustee Doug Bovin, recently retired city manager of Munising and former Michigan House of Representatives member, said he believed the study may be too conservative.
“I’ve seen many economic impact studies for the federal government and the state,” Bovin said. “In a word, I would describe yours as ‘believable.’ It is well put together and if anything, it might be too conservative. You could probably take credit for even more economic activity.”
Bovin said family members who have been introduced to the Eastern Upper Peninsula because of relatives who attended LSSU end up returning to the area to vacation and that generates even more economic activity.
Trustee Rod Nelson concurred, noting that LSSU Foundation activities, such as golf fundraisers in outlying communities, spread the wealth in a “spin-off effect.” Trustees Patrick Egan and Scot Lindemann asked if the study could show the economic effect on other areas of the state generated by LSSU graduates who open businesses after graduation.
Boston said many of those types of activities could be studied and quantified.
McLain reiterated the effect on the state of Michigan, saying “With the small amount that the state contributes, the payback to the state is immense. Our students come from all over the state and they work all across the state.”
To read the LSSU study in its entirety, you’ll find it on the president's page of the LSSU website. -LSSU-
CONTACT: Tom Pink, 906-635-2315; firstname.lastname@example.org; John Shibley, 635-2314, email@example.com; David Finley, 635-2426, firstname.lastname@example.org