Where Minds and Money Meet

Is a university’s presence in a community
a boost for brains alone?

Spring/Summer 2005

To say that California State University, San Bernardino aims to give students a high quality education is pretty similar to saying a hospital’s mission is to make people well or that government seeks to create and enact law and policy. These exercises are, by definition, what such institutions were meant to do. But when it comes to estimating the whole value of a university, one advantage in particular often goes unnoticed or, at the very least, unconsidered.

So when you say that CSUSB contributes more than $500 million in spending to California’s economy each year, that’s a number worth noticing. Add to that the fact that the university also supports more than 10,000 California jobs and generates more than $28 million in state taxes, according to a report commissioned by the California State University, then you just begin to see that a university has more to bring to the social table than its ability to dispense knowledge.

The recently completed study, “Working for California: The Impact of the California State University,” examined how the entire CSU system and its 23 campuses affect the economic, social, intellectual and cultural life throughout the state and its many regions. ICF Consulting of San Francisco conducted the study.

In economic terms, the study is essentially a picture of the multiplier or ripple effect. For every dollar the state government invests in Cal State San Bernardino, university-related spending generates $4.53 in additional spending. That’s more than four times the return on Sacramento’s investment.

“Because Cal State is here, you have a job and I have a job,” said Tom Pierce, a CSUSB economist who’s tracked the university’s impact for years. “We go out and spend money at the grocery store or restaurants and that provides businesses with money that they wouldn’t otherwise have.” The businesses, in turn, he adds, might hire new employees who go out and spend their money, or maybe the businesses spend money locally for technological upgrades that might improve their service. Bottom line, CSUSB generates $532,863,097 in annual spending in California.

“The report confirms what we have worked hard to achieve,” said CSUSB President Albert Karnig. “The university, our students and alumni clearly have a significant and meaningful impact on the local and state economy. Our challenge is to help ensure that there are local jobs that match the high skill levels of our graduates. In fact, we’re working to promote the chances that our graduates will live and work locally and help to build inland California’s overall level of productivity.”

The report also found that CSUSB alumni earnings supply more than $635 million to the state economy on an annual basis. Spending throughout the California State University system creates $13.6 billion annually in economic activity, supports 207,000 California jobs and produces $760 million in taxes for the state’s coffers.

“The CSU directly or indirectly impacts everyone in the state,” said CSU Chancellor Charles B. Reed. Analysts estimate that the 1.7 million CSU alumni living and working in California earn $89 billion in income, $25 billion of which results directly from their degrees. Those earnings, combined with the total economic impact of CSU expenditures, pumps $53 billion into the state’s economy.

A 2001 study conducted by Pierce showed that Cal State San Bernardino’s presence in the region increased annual regional output (productivity measured by the purchase of goods and services) by more than $212 million and regional earnings by more than $91 million. Of the total economic impact, $81.4 million of additional local output and $55.2 million of additional earnings was directly due to the education and the educationally-related services CSUSB provides for San Bernardino and Riverside counties.

CSUSB is one of the fastest-growing universities in the California State University system, with total student enrollment increasing nearly 25 percent over the past six years to almost 17,000 students in 2003-2004. While state budget reductions caused enrollment to decrease slightly for the 2004-2005 academic year, Cal State San Bernardino’s annual total student enrollment is expected to top 20,000 by the end of the decade.

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