The Mesquite Online News - Texas A&M University-San Antonio

Provost says ‘Numbers are hard to ignore’

Construction workers place support beams Feb. 20 on the third floor of Central Academic Building. A campus economic impact assessment estimated the construction of the $75 million multipurpose building will contribute $48.6 million in labor income and an estimated creation of 899 jobs. Photo by Jacob Beltran.

By Jason Hogan

The office of the provost released an economic impact assessment study earlier this month which reports Texas A&M-San Antonio as a “vital source in higher education, job creation and economic impact” in Bexar County and South Texas.

Highlights of the 22-page report cite the start-up university as generating $54.9 million in annual gross sales annually across the seven-county service area; a contributor of $16.6 million in value-added to the region’s gross regional product which includes $9.4 million in labor income, and the creator of 422 jobs across the economy annually. Total job creation over the period from 2013 – 2015 is estimated to be 1,304 jobs annually, the study reports.

The report determines the university will “continue to be a very positive catalyst for local growth of the region.”

Armed with a progress report of the university’s growth and impact, campus officials say they plan to bring the study results to the attention of state legislators during the 83rd legislative session to “prove the institution’s viability, educational value and affect on the economy in the South Texas region.”

With the Legislature currently in session, administrators are waiting on the results of funding requests, which include three exceptional items and two tuition revenue bonds for a science and technology building, and a central plant.

In a Feb. 6 interview, Provost Brent Snow said that President Maria Hernandez Ferrier and the university administration’s intent was to document A&M-San Antonio’s impact on Bexar County and the South Side of San Antonio since becoming a stand-alone institution in 2009.

Snow said the study was not a requirement by the Texas A&M System, or any other entity.

“It was a good thing to do, and most universities do (impact studies),” Snow said. “It helps set the stage for the university in trying to develop programs and activities that not only help students get jobs and get employed,” but the value of those educations will help the region’s economy.

Thomas Tunstall, research director for the Center for Community and Business Research at the University of Texas at San Antonio, said these studies are fairly common.

A few universities in San Antonio perform studies for varying reasons, Tunstall said. UTSA has also produced impact studies to gauge the economic value it has on San Antonio.

Trinity University conducts studies to estimate impact of health care systems and manufacturing on the San Antonio area.

The university paid Knowledge Engineering, the economic development unit of Texas A&M Engineering Extension Service (TEEX), an undisclosed amount.

In this economic impact study, TEEX partnered with MIG Inc., the creator of IMPLAN, a software system which provides software and data tools for economic impact analysis, according to the company website.

John Adams, economic development program director under Knowledge Engineering, said they researched other means to perform the study and found the IMPLAN model was the best method because it’s constantly refined. He said compared to other models, IMPLAN was “the most robust.”

“You can’t put a significant university like this in (San Antonio’s South Side) without development,” Adams said. “How much, when and where, I could not speculate but the opportunities are coming.”

The placement of universities always spawn economic development, he said.

To interpret the economic impact study and what it means for A&M-San Antonio, Leonard Love, business management professor, and Syed Harun, finance professor, said the study results show a three-tier effect, or multiplier on the local economy measured in terms of direct, indirect and induced effects.

Love said the impact study examines the value added from having the university on San Antonio’s south side and the effect on Bexar County.

A multiplier is the makeup of an economic system where money spent by one party becomes another’s income, “kind of like a snowball effect,” Love said.

The direct effect, for example, is the $75 million paid to companies that are constructing the new academic building and the Patriots’ Casa on Main Campus.

An indirect effect is money spent locally by those hired companies to complete the project such as building materials, which adds to the city’s economy.

And an induced effect, Harun said, is money spent in the local market by the university’s employees or students who have personal demands, such as the need for houses, apartments or cars, and influences other companies to then build new businesses.

Love said there are specific economic developmental organizations that specialize in studies for educational institutions and MIG Inc., with the IMPLAN system, is one of them.

Having capable individuals in varying fields of study entices outside companies like Rackspace, Love said, which has two locations in San Antonio on the northeast and northwest sides of the city.

In business, Love said these companies are known as stakeholders which have a vested interest in San Antonio and Bexar County. Startup businesses would be less likely to conduct these studies but major organizations would, Love said.

The study, he says, shows the university is creating measures to become an institution for the city that addresses a growing need to educate the population for an incoming flood of higher paying employment opportunities in the state of Texas.

Over the last three years, A&M-San Antonio has steadily increased its enrollment and has become the fastest growing institution in the A&M System, according to the study.

Student enrollment, as of fall 2012, surpassed 4,100, along with 234 full-time faculty and staff. Enrollment has gone up 15 percent on a year-to-year basis over the last three years, and 191 percent overall from fall 2008 to fall 2012.

Educators and city officials are emphasizing science, technology, engineering and mathematics, or STEM, programs as highly probable career fields that will best aid in stimulating the state’s economy.

The study, in general, confirmed what university administrators speculated prior to its authorization — a positive and resolute impact on the surrounding community, Snow said.

In terms of university priorities, Snow attributes the success of the study as confirmation that they are on track.

“It confirms the impact (A&M-San Antonio) has that puts it in dollars and cents,” Snow said.

“It’s pretty hard to ignore numbers,” he said. “Jobs are going to increase and sales are going to increase, but that alone isn’t going to make (state legislators) say, ‘Yeah, we need to fund you.’”

University president Maria Hernandez Ferrier said Feb. 14 during a President’s Leadership Council Meeting that the request for the Science and Technology building is ranked 13 of 75 tuition revenue bond requests from higher education throughout the state.

The last TRBs approved for funding by the state of Texas were during the 81st legislative session toward recovery efforts following Hurricane Ike in September 2008 to the University of Texas Medical Branch at Galveston and Texas A&M University-Galveston, totalling $155 million, according to a report from the Texas Higher Education Coordinating Board’s website.

Economic Impact Study

About the Author

Jason Hogan
Jason B. Hogan is the Copy Editor for The Mesquite. As a communications major, he also reports on campus development and governance. Jason is an Iraq veteran and served four years in the U.S. Army from 2000 to 2004. Jason graduated from East Central High School and received an A.A. in journalism from San Antonio College in December 2012. He served on The Ranger, an award-winning community college newspaper, where he held various titles over more than four years including editor. He is currently interning at KROV, San Antonio Community Radio. He plans on pursuing a career in print and broadcast journalism.

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