A study has determined that 11 private institutions of higher education pump about $516 million a year into the Arizona economy.

The schools employ 13,020 persons and have a combined payroll of nearly $269 million, plus the study determined that spending by the schools, school employees and students support 5,634 jobs at other Arizona businesses.

The schools are DeVry University, Embry-Riddle Aeronautical University, Frank Lloyd Wright School of Architecture, Grand Canyon University, Keller Graduate School of Management, Midwestern University, Ottawa University, Southwestern College, Thunderbird — The American Graduate School of International Management, University of Phoenix and Western University.

Applied Economics, a Scottsdale firm, performed the study for the Independent Colleges and Universities of Arizona.

“Private colleges and universities are all too often overlooked for the value they bring to Arizona,” said Kathleen Goeppinger, president of Midwestern University and chairman of the board of the Independent Colleges and Universities of Arizona.

“In addition to helping to create a more educated and skilled workforce, which attracts corporations to the state, the schools contribute hundreds of millions of dollars directly to the economy through job creation, attracting out-of-state visitors, purchasing local goods and services and in paying taxes,” she said.

The study says, “In addition to making higher education available locally, an education institution has an economic impact on the community or region in which it is located.

“From an economic perspective, these institutions are just like other businesses or organizations,” it continues. “They hire people and pay them wages, purchase goods and services from local and non-local suppliers, pay state and local taxes and receive income from their ‘customers.’”

11 Schools Employ 4,321

Combined gross revenue of the schools is more than $616 million a year.

The 11 schools currently have 4,321 full-time employees and 8,699 part-time employees. The University of Phoenix with 2,779 full-time employees and 6,325 part-time employees has the largest staff of the group while the Frank Lloyd Wright school with a total staff of seven has the smallest.

More than 78,000 students are enrolled at the schools with 11,218 going full time and 67,087 part time.

The study notes that most of the students attending the University of Phoenix, Keller, Western International and Ottawa are working adults. The average age of Ottawa students is 37 while at Western International it is 35 and at University of Phoenix it is 34.

The 11 schools themselves spend slightly more than $71 million on goods and services from local businesses. The largest expenditure is $12.3 million a year on advertising.

Institutional spending supports about 1,440 jobs at local suppliers and $49 million a year in income for those workers, Applied Economics concluded.

School employees spend about $301 million a year with local business, the study determined.

“This amount of economic activity and sales supports close to 2,900 jobs and $80 million in payroll at other local businesses,” it says.

Students spend about $87 million a year, the study found, supporting about 1,130 jobs and $29 million in payroll.

School Attract Visitors

Finally, the schools attract visitors from out of state. In 2002, the study concluded the 11 schools generated 62,531 visitor days. Based on Greater Phoenix Convention and Visitors Bureau calculations that the average visitor spends $120 a day on food, lodging, transportation, entertainment and retail purchases, visitors to the schools spent about $7.5 million in 2002.

When the spending was added up, Applied Economics concluded total spending was $515.95 million a year, which supported 5,634 jobs and a payroll of $162.28.

In addition, Applied Economics calculated that the schools generate nearly $10 million a year in local taxes and $17 million in state taxes. Four of the schools are for-profit organizations, and the study determined they pay about $4 million a year in corporate income taxes.

The private institutions are apparently a growth industry. Since 1993, the schools have expanded their staffs by 77 per cent.

“Future population increases in the [Phoenix] metro area and the state will spur continued long-term growth for higher education,” says the study.

To accommodate their growth, nine of the schools have been involved in construction during the past five years, spending an average of about $20 million a year.

“The largest expenditures were reported by Midwestern University and University of Phoenix, which each spent over $40 million in the past five years,” says the study.

In summing up the schools’ impact on Arizona, the study says:

“These 11 schools not only provide a wide range of higher education alternatives for residents, but also support a significant amount of additional economic activity, jobs and payroll at related local supplier and consumer businesses in the state.

“They play an important role in helping the state achieve its economic development goals by enhancing the local business climate and by serving as key building blocks of the economy.” —