2. Economic Impact of Centers and Institutes in Florida’s Public Universities Tim Lynch, Ph.D., Director Julie Harrington, Ph.D., Asst. Dir. Center for Economic Forecasting and Analysis Florida State University www.cefa.fsu.edu September 24, 2002

3. Goods Services Capital Productivity Profits Low cost production Strong economy Entrepreneurs Old Economy People

4. Goods Services Capital Higher productivity Higher wages Higher quality of life Higher profits Entrepreneurs More resilient economy Higher efficiency Higher wealth New Economy People

5. Overview of Florida’s Centers and Institutes (C/Is) For fiscal year 2001, there were 512 C/Is located at 10 Universities in Florida (FSU, FAMU, UF, FIU, UCF, FGCU, FAU, UNF, USF and UWF). The C/Is are categorized by type center (1,2 or 3) based on their budgetary support and overall mission. Our project’s objective is to respond to an overall legislative charge to evaluate the return on the state’s investment in centers and institutes in Florida’s public universities. The project, still in development, has conducted a comprehensive survey (52.2% response rate) as a means to quantify intangible benefits of C/Is, has completed statistical and economic analyses,and is conducting on-site interviews of C/Is. The economic analysis of C/Is was performed using REMI.

6. Percentage of C/I Activities

7. Areas of Principle Concern Addressed by C&I Activities 1.Maternal/Child Health and Child Development Issues 2.Economy/Business/Transportation 3.Elderly/Aging 4.Environmental/Ecology/Energy 5.Governance/Law/Race 6.Healthcare/Medicine 7.Schools/Education 8.Community/State/National/International Outreach

8. C/I Model Framework (Basic Assumptions) As part of our modeling strategy, we examined two scenarios, the revenue and expenditure approach regarding the impact of C/Is on the Florida economy. The base model assumed a constant rate of growth for the economy. The revenue approach model used: data for fiscal year 2001 for type 1,2,3 Total; SUS state investment = $88.8 million; The state investment leverages an additional $212.71 million in contracts and grants, fees (auxillary) and private funding, yielding a total of $301.5 million. The expenditure approach provided a greater level of detail, where actual fiscal year 2001 C/I expenditures (by category; salaries, expenses, etc.) were entered into the model. We assumed that, in the absence of SUS C/Is, the SUS investment ($88.8 million) will be reallocated to other higher educational activities. REMI results will be expressed in terms of impacts on GRP, employment, personal (disposable) income and state tax revenues.

9. Percent of University Expenditures for SUS C/I’s for Fiscal Year 2001

10. C/I Models For REMI Workshop Revenue vs. Expenditure Models Four Expenditure Scenarios Using C/I Employment Numbers Using C/I Salary Data Using C/I Employment Numbers and Detailed Sector Data Using C/I Employment Numbers and Final Sales REMI Tax Results vs. CEFA Tax Results

11. REMI Inputs For Revenue and Expenditure Models Policy Variable CategoriesDetail Selection Output Block  Detailed Government Spending  State & Local Higher Education Output Block  Industry Demand  Final and Intermediate Demand Computer & Data Processing Misc. Business Services Electric Utilities Misc. Professional Services Computer & Office Equipment Labor and Capital Demand Block  Employment Education Medical Misc. Business Services Misc. Professional Services

12. REMI Expenditure Approach Policy Variable and Value Detailed Breakout

13. Revenue and Expenditure Approach Results Revenue Approach Expenditure Approach Using Broader Sector Categories and Salary Data (Salary Model)

14. Revenue and Expenditure Approach Results, Continued Expenditure Approach Using Broader Sector Categories and Employment Numbers (Employment Model) Expenditure Approach Using Detailed Sector Categories (Employment and Detailed Model)

15. Revenue and Expenditure Approach Results, Continued Expenditure Approach Using Broader Sector Categories and Employment Numbers (Final Sales Model)

16. Centers and Institutes Economic and Employment Results for Revenue and Expenditure (Salary Model) Approaches For FY 2001

17. Tax Revenues for Direct and Indirect Economic Activity for C/Is in Florida, 2001

18. Tax Revenues for Direct and Indirect Economic Activity for C/Is in Florida, 2001, Continued.

19. Comparison of Tax Results Using Expenditure Salary Model REMI Results For 2001, tax revenues total $32 million For Years 2001-2035, tax revenues total $320 million (2001 dollars) CEFA Results For 2001, tax revenues total $18 million (excluding property taxes, among others)

20. For the State of Florida, using the revenue approach, if all centers and institutes were removed from the university system, and the state investment ($88.8 million) was reallocated to higher education spending, there would be a net loss of $256 million in GRP, $184 million in personal income, and 5,832 jobs. For the State of Florida, using the expenditure approach (salary model), if all centers and institutes were removed from the university system, and the state investment ($88.8 million) was reallocated to higher education, there would be a net loss of $269 million in GRP, $244 million in personal income, and 6,955 jobs. The difference between the two models (comparing expenditure to revenue model) is $13 million GRP, $60 in personal income and 1,123 jobs. Results of Economic Analysis for University Centers and Institutes For The State of Florida