The Economic Impact of the Foothill-De Anza Community College District and its Students October 17, 2005 Kevin Stange Graduate Student Researcher Department of Economics University of California, Berkeley

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 1 Overview 1.What is the aggregate impact of Foothill and De Anza Colleges on the local economy? Spending by the District Spending by students Indirect and multiplier effects Investment in workforce productivity 2.What is the effect of an additional local tax dollar spent at Foothill and De Anza Colleges? Matching from other funding sources Benefits: Indirect multiplier effects and workforce productivity effects

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 2 Overview 1.What is the aggregate impact of Foothill and De Anza Colleges on the local economy? Spending by the District Spending by students Indirect and multiplier effects Investment in workforce productivity 2.What is the effect of an additional local tax dollar spent at Foothill and De Anza Colleges? Matching from other funding sources Benefits: Indirect multiplier effects and workforce productivity effects

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 3 Total Annual Impact of Foothill-De Anza CCD Fiscal Year $ Millions Foothill and De Anza Colleges contribute at least $800 million to the local economy every year

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 4 Goods and Services Costs of goods sold Materials & supplies Operating expenses Some capital outlay Direct Operating Expenses by Foothill-De Anza CCD Fiscal Year 77% Employee Compensation Faculty Staff Students Administrators Foothill and De Anza Colleges spend $195 million on operations every year, primarily for employee compensation 18% Financial Aid to Students 4% Total Yearly Operating Expenditure: $195 million

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 5 20,281,819 Completed 02/03 Completed 03/04 Total Cumulative Spending on Major Recent Capital Projects, $ Dollars Total Annual Spending on All Recent Capital Projects, $ Millions Foothill and De Anza Colleges have completed numerous capital projects in the past few years – approximately $33 million of capital project spending annually

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 6 Foothill-De Anza Community College District is also a Major Local Employer The District has approximately 3,000 full-time and part- time employees Nearly half are faculty Almost all live in or near the District The District is Silicon Valley’s 20 th largest employer –Comparable to Adobe Systems and Electronic Arts –Among colleges, behind only Stanford and San Jose State

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 7 Foothill and De Anza students spend over $300 million in the local economy Full-Time, Full-Year Cost Full-Year (3 terms) Students 10,092 Full-Time, Full-Year* Students 35,701Part-Time, Full-Year* Students 27,942 Full-Year FT and PT Students** + * Equivalent to three quarters ** Counts part-time students 50% Total Student Spending: $99.9 million (FT only) $ million (FT and PT) X

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 8 Spending by the District and its students generates more than $185 million indirect spending and more than 3,000 jobs Direct Spending ($ millions) Multipliers Spending by District $1.67 Total Spending $1 Direct Spending 20.8 Total Jobs $1million Direct Spending Spending by Students $1.59 Total Spending $1 Direct Spending 22.5 Total Jobs $1million Direct Spending Total Indirect Spending: $149.5 million (District) $36.1 million (Students) X Total Indirect Jobs: 1,943 jobs (District) 1,376 jobs (Students)

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 9 Earned Credit Hours per Year to Academic Years Number of Unique Students to Academic Years Earned Credits per Student to Academic Years X = FHDA students earn more than 800,000 credit-hours per year

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 10 Fraction Moving From County over Five Year Period Migration and Mortality Fraction Participating in Labor Force in San Jose MSA, 2000 Labor Force Participation Fraction Surviving over Five Year Period Mortality, migration, and labor force non-participation reduce credit accumulation in local workforce

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 11 Total Estimated Foothill-De Anza Credits Embedded In Local Population and Workforce Total Credits in Population, 2004 = 10,011,146 Total Credits in Workforce, 2004 = 7,062,040 More than 7 million college credit hours are actively employed in the local workforce

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 12 Average Earnings, 2000 Age Group Estimated $ Value of Each FHDA Credit Earned $18.46 $28.53 $45.88 $53.23 $58.08 $63.97 $61.13 $62.82 $65.52 $50.51 $37.49 Every forty-five college credits increase earnings by 6%

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 13 Total Embedded Credits, 2004 Age of Worker in 2004 Estimated $ Value of Embedded Credits ($ millions) $9.6 $29.1 $44.5 $47.5 $47.3 $52.2 $44.7 $37.1 $27.7 $9.4 $2.4 $1.0 $0.3 $0.2 $352.8 million total earnings 7,062,040 total credits More than $350 million of earnings by local alumni can be attributed to Foothill and De Anza Colleges

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 14 Overview 1.What is the aggregate impact of Foothill and De Anza Colleges on the local economy? Spending by the District Spending by students Indirect and multiplier effects Investment in workforce productivity 2.What is the effect of an additional local tax dollar spent at Foothill and De Anza Colleges? Matching from other funding sources Benefits: Indirect multiplier effects and workforce productivity effects

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 15 Income Sources of Foothill-De Anza Community College District Fiscal Year 22% 51% 5% State Sources Federal Sources Property Taxes Tuition Other Local Sources Each $1 of property tax is matched by $0.95 of other funding 13% 9% 5%

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 16 Present Value of Future Earnings Increase: $276,463,813 Indirect Spending (Multiplier Effect): $ 152,485,336 Investment Benefits Present Value of Costs and Benefits of Foothill-De Anza Investment Academic Year Direct Spending: $227,590,053 Investment Costs Each $1 of direct FHDA spending generates $1.88 of indirect spending and future earnings gains

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 17 What are the effects of additional spending at FHDA? How far do local property taxes go? $1 Property Taxes $1.95 Total Spending by Foothill-De Anza $1 Spending by Foothill-De Anza $0.67 Indirect Spending + $1.21 Alumni Earnings Increase = $1.88 Economic Impact What is the effect of additional property tax spending? $1 Property Taxes $3.67 Economic Impact Each $1 of property taxes generates $3.67 of total economic impact

Draft Version 12/10/02- Please direct all comments on this research brief to Kevin Stange at or 18 Conclusions Foothill and De Anza Colleges have a tremendous impact on Silicon Valley’s economy Approximately $800 million of local income can be attributed to – directly and indirectly – the presence of Foothill and De Anza Colleges and their students Numerous other benefits (e.g., improved health, reduced crime) are also present, but have not been quantified The Colleges are an attractive investment for local taxpayers due to increased workforce productivity and induced indirect spending