UNIVERSITY CITES MAJOR ECONOMIC IMPACT

CAPE GIRARDEAU -- Southeast Missouri State University pumps $48.9 million annually into the regional economy, a university study reports.

The university also creates a total economic impact in the area of $310 million, according to the study.

The economic impact report was released at the Chamber of Commerce First Friday Coffee by Harry Rediger, manager of JCPenney's Store here and a member of the University Foundation Board, and Dr. Robert Foster, executive vice president of the university.

Rediger said in addition to providing education for students, Southeast also adds to the financial health of its service area.

"Southeast Missouri State University has grown over the years," said Rediger. "But one constant has remained. The university has never lost sight of its roots or its purpose. It is also a great economic force in the area."

The economic impact study was conducted by the university's Office of Economic Development and Office of Institutional Research and the faculty of the Department of Economics. Dr. Linda Cochran, Economic Development director for the university headed the study.

It is based on a January study of faculty, staff and full-time students, and on other data collected during fiscal 1991.

The last study of the university's impact on the economy was in 1984. The $48.9 million direct impact reported in the 1991 study compares with $34.4 million reported in 1984.

To determine the $310 million economic impact, researchers tallied direct and indirect expenditures, taxes, deposits in financial institutions and the university's effect on "human capital."

"Human capital" is a new factor with the largest impact in the equation. By improving the knowledge and skills of workers, the university helps to make them more productive, which contributes to the economic growth of an area.

The study pegs the value of "human capital" at more than $206 million in the region and $41.9 million in Cape County.

The value of "human capital" is determined by multiplying the number of graduates in an area by $11,000 the average additional annual income of a college graduate over someone with a high school diploma only. The total was adjusted for regional unemployment.

"The human capital impact is something universities have not traditionally reported," said Dr. Linda Cochran, economic development director. "But it is far more significant than the impact of direct expenditures."

Direct expenditures by the university itself, its employees, students, visitors and food service contractor total $48.9 million, Rediger reported.

This money is "re-spent" within the area, resulting in added income and expenditures, called indirect expenditures.

"Indirect spending is the economic activity sometimes referred to as the `multiplier effect,'" Cochran said.

Economists use a multiplier to describe the total effect of dollars as they are circulated in the economy. Multipliers of 4 to 6 are sometimes used in economic impact studies. Southeast's study used a multiplier of 1.85, or 85 percent of the direct figure. The indirect expenditure for the region is $41.6 million.

The university also contributes through real estate and sales taxes, totalling nearly $785,000 per year, paid by employees, students and contracted food service.

And the university has deposited $4 million in local financial institution. The study reports that faculty and staff members have $6.2 million deposited and students have deposited $2.7 million in local financial institution.

"These areas of economic impact are a photograph in time," Rediger said. "The exciting thing to me as a citizen and a businessman is the future.

"Southeast is going Division I in athletics," he said, and cited success and national attention the university's women's and men's basketball, gymnastics, track and cross country teams have achieved.

"Academically Southeast is going Division I also," Rediger said, citing the school's University Studies program as an example.

"I suggest Cape County and the region are also going Division I," Rediger said, citing growth in retail sales in the region, the Southeast Missouri Regional Port Authority and even the new Mississippi River Bridge to be built in Cape Girardeau.

"It's a great and exciting partnership."