Austin – An economic impact study released this week by the Texas Association of Community Colleges (TACC) shows that Austin Community College makes a significant annual contribution in stimulating the local economy; has proved to be a great investment for students; and yields a positive return for taxpayers.

“The data clearly show that ACC has a positive influence on our local economy, while generating a healthy return on investment for students and taxpayers alike,” said ACC President Richard Fonté.

The statewide study, titled The Socioeconomic Benefits Generated by 50 Community College Districts in Texas, was conducted by CCBenefits Inc. for TACC. The study was funded by Houston Endowment Inc. and the 50 community college districts. In addition to statewide data, the study generated a detailed report for each community college.

“The anecdotal evidence of the value of community colleges has long been impressive,” Fonté said. “Students, employers, civic leaders, and local economists all extol the virtues of an ACC education. What has been missing up to this point is data to quantify ACC’s value to this community in hard economic terms. This new study gives us the numbers we need to illustrate ACC’s economic contributions to Austin.”

ACC makes a significant annual contribution in stimulating the local economy, according to the study. In 2000, $70.9 million in salaries and wages of ACC’s faculty and staff were added to the local economy, generating both purchasing power and tax revenues. An additional $28.7 million was generated indirectly through various multiplier effects. ACC’s current and former students contributed another $526.4 million to the local economy, bringing ACC’s total contribution to the local economy to $626 million.

Students also realize an attractive return on their tuition investment. According to the CCBenefits report, ACC students see a return of $9.04 over a 30-year career for every tuition dollar invested. They get back their investment in only 5.7 years.

“What that means is that students attending ACC for two years will get their money back in a very short period of time,” Fonté said. “There may be no better educational investment for them.”

According to the report, the benefits to local taxpayers are equally impressive. One fundamental element of the CCBenefits model is to look at “avoided social costs” – the tax-supported costs that are avoided by an educated population.

These include lower absenteeism due to improved health, lower social service costs such as welfare, public health services, and unemployment compensation, and lower crime costs. The state report calculated that, by helping to reduce social costs, ACC’s training and education programs result in local tax savings of $15.3 million each year.

In addition to avoided social costs, ACC’s graduates become gainfully employed and generate additional taxes. The report indicates that the annual tax benefits of the avoided social costs and the additional tax collections amount to a return to each taxpayer of $4.59 for every local and state tax dollar they invest. This compares favorably with the figure for all 50 community college districts, where each taxpayer receives a $3 return for each tax dollar invested. Taxpayers see their money paid back within 5.5 years.

“You won’t find many private investment opportunities with that kind of yield,” said Fonté.
The report also calculated the long-term tax benefits of Austin Community College. When the earnings of graduates are added to reduced social costs and higher tax revenues over a 30-year period, the return to each taxpayer rises to $29.40 for every local and state tax dollar they invest. This compares favorably with the figure for all 50 community college districts, where each taxpayer receives an $18.50 return for each tax dollar invested.

“The study shows that investing public tax dollars in your local community college not only makes sense from the standpoint of social equity and workforce development, it returns tax savings to the taxpayer,” Fonté said. “We have made this point anecdotally over time, but now we have the numbers to show it.”