Pellissippi State Community College pumped an average of $244 million each year into the local economy during the past five years, a recent study shows.
The 25th annual analysis of the economic impact of the college on the Knox and Blount county area reveals that the value of business volume, jobs and individual income amounted to about $1.22 billion in the 2007-2012 period, or an average of $244 million each year.
Local business volume—the total amount generated locally by businesses from the college’s direct and indirect expenditures—was $589 million for the five-year period, says Fred H. Martin, an educational consultant who completed the study. Of that total, $479 million came from non-local revenues, such as state appropriations, state and federal contracts and grants, and federal and state student financial aid revenues.
Although Pellissippi State had an average of only 477 full-time-equivalent employees per year during the period, the total employment created and sustained by the college’s expenditures was estimated at 40,238 jobs for the five years. Of that number, 32,421 were created by external or new funds.
Using the more conservative of two different calculations, Martin has estimated that the impact of the college’s expenditures on personal income in the area amounted to about $631 million during 2007-2012, of which $523 million came from external or new funds.
Of the college’s $1.22 billion total economic impact, about $1 billion ($200 million each year) can be attributed to the infusion of new non-local revenues.
“This impact would likely not have occurred without the presence of Pellissippi State in the area,” said Martin.
The economic impact study notes that each dollar of local revenue coming into Pellissippi State generated a “return on investment” of around $3.73 in local business volume. The individual income generated ranged from $4.01 to $4.25, for a total return on investment of at least $7.74.
The study also estimates that people who have a two-year associate’s degree can expect to earn about $350,000 more in a lifetime than those who have only a high school diploma. For the most recent class of Pellissippi State graduates, this difference could add up to an additional $386 million in lifetime earnings, plus about $2.1 million in additional annual tax contributions.
The report also describes a number of benefits to society that are proven to accompany higher levels of education.
“The results of this economic impact study clearly demonstrate that Pellissippi State continues to be a major contributor to the economic base of Knox and Blount counties,” Martin said.