New study estimates University System economic impact at $5.5 billion for Fiscal Year 2019

The economic impact of the North Dakota University System (NDUS) on the state has risen to an estimated $5.5 billion for Fiscal Year 2019, according to a recent report by North Dakota State University's Department of Agribusiness and Applied Economics. The economic impacts include both direct and secondary expenditures.

“As the report illustrates, higher education is vital to North Dakota’s economy,” said NDUS Chancellor Mark Hagerott. “Higher education invests in people and the overall growth of knowledge for young people and adult learners. Higher education directly influences these learners as well as the workplaces that hire these workers. Our goal is to always work toward the betterment of the entire state.”

Titled Economic Impact of the North Dakota University System, the FY 2019 report is similar to studies conducted in reports ranging back to Fiscal Year 1999. Report authors Dean A. Bangsund, research scientist, Department of Agribusiness and Applied Economic; and Nancy Hodur, director, Center for Social Research at North Dakota State University, use the North Dakota Input-Output Model to estimate economic impact. At the end of the report is an abbreviated economic impact analysis for each of the 11 campuses in the state and the NDUS office.

“Institutions of higher education in North Dakota are influential in many perspectives,” the authors concluded. “They help provide the state with an educated workforce ready to meet the challenges of an ever-changing work environment. They provide outreach and continuing education programs for the state’s residents and businesses. In addition to providing education, the state’s universities and colleges create and support jobs and employment opportunities through research, extension, and teaching activities. All these important services and products provide economic benefits which enhance local and state economies.”

Key measures of the economic impact of the NDUS in FY 2019 include:

  •  The state’s colleges and universities leverage $2.82 from external sources for every dollar of state appropriated funds.
  • Direct economic effects (expenditures) by the NDUS have increased from $533 million in FY1999 to $980 million in 2009 and $1.5 billion in FY2019.
  • Direct economic effects decreased from a high of $1.6 billion in FY2015 to $1.5 billion in FY2019.
  • Direct impact increased slightly from FY2018 increasing from $1.3 billion in 2018 to $1.5 billion in FY2019.
  • Non-general fund revenues are an important source of funding for the NDUS, providing 71 percent of the total expenditures in FY2018 and 74 percent in FY2019.
  • Total NDUS economic effects (direct and secondary) were $1.6 billion in FY1999, $2.9 billion in FY2009, and $4.3 billion in FY2019.
  • Direct expenditures created total business activity (direct and secondary effects) of $4.3 billion including $1.1 billion in retail trade activity, and $1.6 billion in economy-wide personal income.
  • NDUS in-state expenditures, student expenditures and subsequent secondary business activity was estimated to generate $48.4 million in state tax collections. Of that total, $19.9 million were sales and use taxes, $12.5 million from property taxes, $7.3 million from personal income taxes, $2.6 million from corporate income taxes, and $6 million in other miscellaneous taxes.
  • Direct employment by the NDUS was 10,489 FTE jobs in FY2019; down slightly from FY2017 and FY2018 employment of 10,741 and 10,857, respectively.
  • Enrollment at the NDUS’s 11 colleges and universities was 34,954 FTE students for Fall Semester 2019, down 1,649 from 2018. Enrollment has been declining since a high of 39,089 in 2011.
  • NDUS student living expenses were estimated to be $453 million for FY2019, down from $455 million in FY2017.
  • Economic effects of student living expenses resulted in $456 million in direct effects and $1.1 billion in total business activity, highlighted by $510 million in retail trade activity and $273 million in economy-wide personal income.
  • Combined NDUS and student expenditures (direct effects) in FY 2019 was $4.7 billion. Total economic contribution (direct plus secondary) from NDUS and student expenditures was nearly $5.5 billion.