Clover Park Technical College creates a significant positive impact on the business community and generates a return on investment to its major stakeholder groups—students, taxpayers, and society.
CPTC creates value in many ways. The college plays a key role in helping students increase their employability and achieve their individual potential. It provides students with the skills they need to have a fulfilling and prosperous career. The value of CPTC influences both the lives of students and also the county economy. The college serves a range of industries in Pierce County, supports local businesses, and benefits society as a whole in Washington from an expanded economy and improved quality of life.
IMPACT ON BUSINESS COMMUNITY
During the analysis year (2014-15), CPTC and its students added $187.9 million in income to the Pierce County economy, approximately equal to 1% of the county’s total gross regional product. By comparison, this impact from the college is nearly as large as the entire Utilities industry in the region.
The economic impacts of CPTC break down as follows:
Operations spending impact
CPTC employed 322 full-time and part-time employees in FY 2014-15. Payroll amounted to $25.9 million, much of which was spent in Pierce County to purchase groceries, clothing, and other household goods and services. The college spent another $20 million to support its day-to-day operations.
The net impact of college payroll and expenses in Pierce County during the analysis year was approximately $32.6 million in income.
Impact of student spending
Around 1,371 students attending CPTC originated from outside the county. Of these, an estimated 1,114 students relocated to Pierce County. In addition, a number of students would have left the county if not for CPTC. These relocated and retained students spent money on groceries, transportation, rent, and so on at county businesses.
The expenditures of relocated and retained students during the analysis year added approximately $8.3 million in income to the Pierce County economy.
Over the years, students have studied at CPTC and entered or re-entered the workforce with newly-acquired skills. Today, thousands of these former students are employed in Pierce County.
The accumulated contribution of former students currently employed in the county workforce amounted to $147 million in added income during the analysis year.
RETURN ON INVESTMENT TO STUDENTS, TAXPAYERS, AND SOCIETY
CPTC’s FY 2014-15 students paid a total of $10.4 million to cover the cost of tuition, fees, and supplies. They also forwent $75.9 million in money that they would have earned had they been working instead of learning.
In return for the monies invested in the college, students will receive a present value of $212.5 million in increased earnings over their working lives. This translates to a return of $2.50 in higher future earnings for every $1 that students invest in their education. The average annual return for students is 11.6%.
In FY 2014-15, state and local taxpayers in Washington paid $24.7 million to support the operations of CPTC. The net present value of the added tax revenue stemming from the students’ higher lifetime earnings and the increased output of businesses amounts to $59.3 million in benefits to taxpayers. Savings to the public sector add another $6.3 million in benefits due to a reduced demand for government-funded services in Washington.
Dividing benefits to taxpayers by the associated costs yields a 2.6 benefit-cost ratio, i.e., every $1 in costs returns $2.60 in benefits. The average annual return on investment for taxpayers is 9.2%.
The economic base in Washington will grow by $945.9 million over the course of the students’ working lives. Society will also benefit from $19.8 million in present value social savings related to reduced crime, lower unemployment, and increased health and well-being across the state.
For every dollar that society spent on CPTC educations during the analysis year, society will receive a cumulative value of $7.70 in benefits, for as long as the FY 2014-15 student population at CPTC remains active in the state workforce.
The results of this study demonstrate that CPTC creates value from multiple perspectives. The college benefits local businesses by increasing consumer spending in the county and supplying a steady flow of qualified, trained workers into the workforce. It enriches the lives of students by raising their lifetime earnings and helping them achieve their individual potential. It benefits state and local taxpayers through increased tax receipts across the state and a reduced demand for government-supported social services. Finally, it benefits society as a whole in Washington by creating a more prosperous economy and generating a variety of savings through the improved lifestyles of students.