Virginia higher education system plays major role in state economy

As growing demand for higher education has boosted Virginia's economy, state support continues to shrink (graph courtesy of the Weldon Cooper Center for Public Service).

According to a new study, every dollar spent by Virginia public higher education institutions is associated with an additional $1.29 in state revenue and adds $17.40 to the state gross domestic product.

The study, released by the University of Virginia’s Weldon Cooper Center for Public Service, was created for the Virginia Business Higher Education Council.

“Virginia’s public higher education institutions are economically important to the commonwealth economy,” read the study’s executive summary. “They spend billions of dollars on employee payroll, procurement of supplies and services and capital projects. Students and visitors also generate economic activity by spending on goods and services.”

Between 2007 and 2011, the number of college graduates grew by 17.3 percent, driving the increase in expenditures by the institutions.

The study notes that a large portion of public higher education’s impact on Virginia’s economy stems from the medical centers operated out of Virginia Commonwealth University and the University of Virginia.

“Together [the medical schools] account for 25,399 jobs, $1.842 billion in GDP, and $142 million in state revenues,” read the study.

The report also points out that while the number of students enrolling in state public universities has rapidly expanded, state government support has not kept up with demand.

“Virginia state appropriations, grants and contracts actually declined in both absolute and per capita terms from 2007 to 2011 and were overtaken by student tuition as the largest revenue stream for Virginia public colleges and universities as student tuitions have been raised to compensate for losses in state aid,” read the study.

Declining state support has been an issue for schools like George Mason University, where officials have looked for alternative sources of revenue to support a growing student population.

The study also predicts growing demand for STEM degrees as desired job skills shift to more technical fields.

“Demand is expected to be brisk in this decade for skilled workers in the commonwealth,” read the study. “Virginia public higher education will play a key role in educating this future workforce.

Study of the economic impact of Virginia publichigher education: 2013 update by Frank Muraca