Study Shows CAC Returns More to Government Budgets Than it Costs
By Angela Askey, Director of Marketing
PINAL COUNTY, Ariz. – Central Arizona College plays a significant role in Pinal County’s economy, according to a study conducted by Economic Modeling Specialist International (EMSI).
Overall EMSI findings state, “CAC adds more money into the state treasury than it takes out. Absent CAC, taxes would actually have to be raised in order to maintain services in all other sectors at their current levels to make up for the lost revenues and added costs.”
The study consists of two analyses; an investment analysis and economic growth analysis. The investment analysis captures private and public benefits that accrue to students and taxpayers in return for their educational support. The economic growth analysis focuses on the role CAC plays in promoting economic development by increasing consumer spending and raising the skill level of the labor force.
“CAC is a sound investment from multiple perspectives,” said Bill Brown, the college’s executive director of planning and research. “This study shows that CAC is an attractive investment to its major stakeholders-students as well as taxpayers. At the same time, state and local governments can take comfort in knowing that their expenditure of taxpayer funds create a wide range of positive social benefits, and perhaps more importantly, actually returns more to government budgets than it costs.”
It is not only the students who benefit from having a two-year college in the county. The study shows that CAC has rewarded tax payers with a total of $83.3 million in benefits. For every dollar of support, taxpayers see a return of $1.70 in the form of higher tax revenues and avoided costs. This is equal to a rate of return of 6.2%, indicating that state and local governments make money on the investment. By funding the college, other recipients of state and local funding are actually subsidized through revenues generated by the college.
The report indicates that CAC and its former students contribute $246.6 million annually to the economy. This is approximately equal to 5.8% of the total Pinal County economy.
Students who earn a degree at CAC can expect a lifetime of higher earnings. CAC students expand the state’s economic base through their higher incomes, while the businesses that employ them also become more productive. These benefits contribute an estimated $37.8 million in taxable income to the Arizona economy each year.
“Many times we do not recognize that higher education has a direct economic impact. CAC promotes economic growth in Pinal County as an employer, a buyer of goods and services, and provider of trained workers. As the study shows, without the increased tax receipts and avoided costs provided by CAC, state and local government would have to raise taxes to make up for lost revenues and added costs,” Brown said.
The full report can be found at www.centralaz.edu/socioeconomic.