ECONOMIC AND FISCAL IMPACTS, AND EDUCATION PREMUIM OF McNEESE STATE UNIVERSITY

Transcription

1 ECONOMIC AND FISCAL IMPACTS, AND EDUCATION PREMUIM OF McNEESE STATE UNIVERSITY Prepared by Mostafa Malki, Ph.D. Disclaimer: This Report was Prepared by Dr. Mostafa Malki who is solely responsible for its contents. McNeese State University is not responsible for any error of omission or commission in the methodology employed, data used, and materials collected from different sources. December 2015

2 TABLE OF CONTENTS EXECUTIVE SUMMARY... 5 I. ECONOMIC AND FISCAL IMPACT RESULTS... 5 II. McNEESE EDUCATION PREMIUM... 9 I. INTRODUCTION Purpose and Scope Education, Knowledge Creation and the Common Good McNeese State University II. THE ECONOMY OF SOUTHWEST LOUISIANA Occupations Industry Labor Force Participation Educational Attainment Poverty Shift Share Analysis Analysis of Employment Changes III. ECONOMY OF SOUTHWEST LOUISIANA PARISHES McNeese Demographics and Economic Impact IV. ECONOMIC AND FISCAL IMPACT RESULTS Introduction Economic Impact of McNeese Operations Fiscal Impact of McNeese Operations Economic Impact of McNeese Capital Expenditures Fiscal Impact of McNeese Capital Expenditures Economic Impact of McNeese Salaries Fiscal Impact of McNeese Salaries Economic Impact of McNeese Students Spending Fiscal Impact of McNeese Student Spending Economic Impact of McNeese Events Fiscal Impact of McNeese Events Total Economic Impact Total Fiscal Impact V. McNEESE EDUCATION PREMIUM VI. CONCLUSION APPENDIX A METHODOLOGY AND DATA Methodology Data Sources IMPLAN data Shift Share Analysis Shift Share Components Page

3 APPENDIX B INVENTORY OF DEGREE PROGRAMS REFERENCES Page

4 TABLES AND FIGURES Figure 1. Unemployment Rate and Earnings by Educational Attainment, Table 1. Historical Degrees Conferred by Gender Figure 2. Southwest Louisiana Occupations, Figures 3. Change in Employment by Industry Figure 4. Labor Force Participation Rate Figure 5. Educational Attainment: Population 18 to 24 years Figure 6. Educational Attainment: Population 25 and over Table 2. Percentage of Families whose Income in the Past 12 Months is below the Poverty Level..20 Figure 7. Percentage of Families whose Income in the Past 12 Months is below the Poverty Level.21 Figure 8. Change in Employment 1990 to Table 3. Employment Changes in Southwest Louisiana, Table 4. Shift-Share Analysis for McNeese Area, Figure 9. Distribution of 2014 Employment Figure 10. McNeese Primary Catchment Area Table 5. Enrollment by Parish of Origin Table 6. Enrollment by State of Origin Table 7. Enrollment by Country of Origin Table 8. Fall 2014 Enrollment by Level Figure 11. Enrollment by Rank - Fall Figure 12. Enrollment by Full-Time/Part-Time Status - Fall Table 9. Fall 2014 Enrollment by Gender Figure 13. Enrollment by Gender and Ethnicity - Fall Table 10. Fall 2014 Average Age of Students Figure 14. Enrollment by Age - Fall Figure 15. UL System Budget History FY 2009 to FY Table 11. McNeese State University Funding FY 2009 and Table 12. McNeese State University Expenditures by Function Table 13. McNeese State University Expenditures by Category Table 14. Summary Impact on 12 Immediate Parishes Table 15. Summary Impact on the State Table 16. Top 10 Industries in the 12 Immediate Parishes Impacted Table 18. State and Local Tax Impact in the 12 Immediate Parishes Table 19. State and Local Tax Impact in the State Table 20. Federal Tax Impact in the 12 Immediate Parishes Table 21. Federal Tax Impact in the State Table 22. Capital Outlays at McNeese Table 23. Summary Impact of McNeese Capital Expenditures on 12 Immediate Parishes 38 Table 24. Summary Impact of McNeese Capital Expenditures on the State Table 25. Top 10 Industries in the 12 Immediate Parishes Impacted by McNeese Capital Expenditures Table 26. Top 10 Industries in the State Impacted by McNeese Capital Expenditures Page

5 Table 27. State and Local Tax Impact in the 12 Immediate Parishes Table 28. McNeese Constituents State and Local Tax Impact in the State Table 29. McNeese Constituents Federal Tax Impact in the 12 Immediate Parishes Table 30. McNeese Constituents Federal Tax Impact in the State Table 31. Summary Impact of McNeese Salaries on 12 Immediate Parishes Table 32. Summary Impact of McNeese Salaries on the State Table 33. Top 10 Industries in the 12 Immediate Parishes Impacted Table 34. Top 10 Industries in the State Impacted Table 35. State and Local Tax Impact in the 12 Immediate Parishes Table 36. State and local tax impact in the state Table 37. Federal Tax Impact in the 12 Immediate Parishes Table 38. Federal Tax Impact in the State Table 39. Summary Impact on 12 Immediate Parishes Table 40. Summary Impact on the State Table 41. Top 10 Industries in the 12 Immediate Parishes Impacted Table 42. Top 10 Industries in the State Impacted Table 43. State and Local Tax Impact in the 12 Immediate Parishes Table 44. State and Local Tax Impact in the State Table 45. Federal Tax Impact in the 12 Immediate Parishes Table 46. Federal Tax Impact in the State Table 47. Summary Impact on 12 Immediate Parishes Table 48. Summary Impact on the State Table 49. Top 10 Industries in the 12 Immediate Parishes Impacted Table 50. Top 10 Industries in the State Impacted Table 51. State and Local Tax Impact in the 12 Immediate Parishes Table 52. State and Local Tax Impact in the State Table 53. Federal Tax Impact in the 12 Immediate Parishes Table 54. Federal Tax Impact in the State Table 55. Summary Impact on 12 Immediate Parishes Table 56. Summary Impact on the State Table 57. Top 10 Industries in the 12 Immediate Parishes Impacted Table 58. Top 10 Industries in the State Impacted Table 59. State and Local Tax Impact in the 12 Immediate Parishes Table 60 State and local tax impact in the state Table 61. Federal Tax Impact in the 12 Immediate Parishes Table 62. Federal Tax Impact in the State Table 63. Synthetic Work Life Earnings and Education Premium Figure 16. Unemployment Rates, Figure 17. Multiplier Process Page

6 ECONOMIC AND FISCAL IMPACTS, AND EDUCATION PREMIUM OF McNEESE STATE UNIVERSITY EXECUTIVE SUMMARY This study presents key economic features of McNeese State University in the academic year and those aspects of its contribution to Louisiana and more particularly to Southwest Louisiana s economy that can be readily measured. The university is analyzed as a conventional industry, through its economic linkages, highlighting major economic characteristics of McNeese as a state university, including its sources of revenue, employment created, output generated and value added. Estimates are made of the economic activity generated in other sectors of the economy through the secondary multiplier effects of expenditure by the university, its faculty and staff, and its students and visitors. Additional analysis is undertaken of the overall contribution of McNeese State University to improving the synthetic work-life earning of its graduates. Two types of impacts are measured: The economic and fiscal impacts of McNeese University and various activities attributable to the university on the local and state economy using IMPLAN, an input-output modeling software, and IMPLAN s Louisiana Social Accounting Matrix (SAM). The estimation is based on university expenditures, faculty and staff expenditures, student expenditures, sporting and cultural events, and other extra-curricular activities. Education premium impact which measures the differential earning powers generated by a university education using synthetic work-life earnings. I. ECONOMIC AND FISCAL IMPACT RESULTS The economic and fiscal impacts of McNeese State University reach far beyond the immediate environment of the University s physical location. The economic impact of McNeese State University was calculated by accounting for various activities that occur from the presence and operation of the University. Some of these impacts are the direct result of University expenditures, while others occur through a number of different sources such as expenditures of faculty and staff, spending of students, expenditures of visitors to the University. The economic impact is estimated at the regional and state levels. The impact at the state level includes the estimated regional impact. Direct annual expenditures from McNeese State University, its faculty and staff, its students, and its visitors have a significant economic impact on the economies of Southwest Louisiana and the state. The impact is estimated using budget data obtained from the University of Louisiana System (UL System) for fiscal year Page

7 Additional data on salaries were obtained from UL System and added to the appropriate category of University operating expenditures. In addition to budget and salary data, McNeese Office of Facilities and Plant Operations compiled capital expenditures data so that the economic impacts of these expenditures could be calculated. The Dean s Office of the College of Business contacted different McNeese departments to provide data on enrollment and on sporting and cultural events at the university. Budget data from UL System show that between 2009 and 2015 state funding to institutions in the UL System declined by 55 percent while self-generated funding increased by 61 percent. In 2009, state funding represented 62% of total funding. This share declined to 31%, while the share of tuition and fees increased form 38% to 69% over the same period. The overall change in total funding declined by $90.23 million or percent between 2009 and According to the expenditures by function data, expenditures on Instruction accounted for 41.2 percent of total expenditures followed by Institutional Services and Academic Support at 11.6 percent and 9.8 percent respectively. Expenditures by category show that Salaries, Related Benefits, and Other Charges are the three biggest expenditure categories accounting for 88.6 percent of total expenditures, with expenditures on salaries alone account for 50 percent of total expenditures. The majority of McNeese State University economic impact is concentrated around Calcasieu parish and extends beyond the borders of Louisiana, however, the University s operations and impacts in terms of property owned and constituent residences stretch over the 12 parishes identified above, which includes Acadia, Allen, Beauregard, Calcasieu, Cameron, Evangeline, Jefferson Davis, Iberia, Lafayette, St Landry, Vermillion, and Vernon parishes. The vast majority of students enrolled at McNeese State University reside in the 12 Southwest parishes. Direct annual spending from McNeese State University contributes a significant economic impact to southwest Louisiana and statewide economies. Expenditures, both in and out of the state, from the University totaled $62.9 million in the 2014 fiscal year. The university operation, students, faculty and staff, and visitors provide numerous economic impacts, which are detailed throughout this report. The magnitude of impact diminishes as one moves away from the university physical location in Calcasieu parish and the immediate 11 parishes surrounding Calcasieu parish. Through its local spending, as well as direct and indirect support of jobs, the presence of the University stabilizes and strengthens the local, regional, and statewide tax base. The total output impact on the region generated by the university operations is $57 million, $33.7 million in direct impact, $8.9 million in indirect impact and $14.3 million in induced impact. The university s operation generates 1,038 FTE jobs, with 859 direct, 58 indirect and 121 induced. Economic Impact of McNeese Operations. The annual business expenditures of the university created additional economic activity within the Southwest Louisiana region and throughout the state of Louisiana through indirect and induced impacts. For the 6 Page

8 Southwest Louisiana region and the state, the output multipliers for economic activities associated with the annual business expenditures was 1.69 and 1.80 respectively in the 2014 fiscal year. This means for every dollar of business expenditures by the University, the total economic impact generated within the region and the state was $1.69 and $1.80. In 2014, these annual business expenditures generated an economic impact of $57.0 million in Southwest Louisiana and $60.8 million in the state. These activities directly supported 859 jobs and a total of 1,038 jobs regionally, and a total of 1,067 jobs statewide through indirect and induced effects. Total labor income generated in Southwest Louisiana and in the state by the annual business expenditures was $24.1 million and $25.3 million respectively. The top 10 impacted industries by employment at the regional level are the University (859 jobs), real estate establishments (23 jobs), food services and drinking places (17 jobs), offices of physicians (7 jobs), dentists, and other health practitioners (6 jobs), private hospitals (5 jobs), nursing and residential care facilities (5 jobs), retail stores - general merchandise (5 jobs), private household operations (5 jobs), other state and local government enterprises (5 jobs), and services to buildings and dwellings (5 jobs). Fiscal Impact of McNeese Operations. It is a common misperception that public universities do not generate tax revenue. The presence of public universities generates significant tax impact through indirect and induced impacts, and through spending by its various constituency. State and local government tax revenues attributable to the presence of McNeese State University totaled $2.4 million ($1.1 million sales tax revenue) in fiscal year The University presence also generates $2.8 million is federal tax revenue in the form of dividends, social insurance tax, excise tax, custom duty, corporate profits tax, and personal income tax. Specific taxes, generated at the state and local level, are presented in the tables below. Economic Impact of McNeese Capital Expenditures. The direct expenditures from capital outlays activities at McNeese State University created additional economic activity within the region and the state through indirect and induced impacts. The output multiplier for economic activities associated with capital outlays was 1.67, for both the region and the state in the 2014 fiscal year. This means for every dollar of capital expenditures at the University, the total economic impact generated within the state was $1.67. In 2014, capital expenditures activities generated an economic impact of $97.4 million in Southwest Louisiana and $106.1 million at the state level. The capital expenditures directly supported a total of 662 jobs in the region and 722 jobs at the state level through indirect and induced effects. Total labor income generated in Southwest Louisiana by these activities was $35.0 million and $38.2 million at the state level in Fiscal Impact of McNeese Capital Expenditures. The presence of McNeese State University has significant impact on the tax revenues paid to state, local, and federal governments indirectly through various University constituents. In the fiscal year 2014, the estimated state and local tax revenue that is attributable to capital expenditures is $2.6 million and the federal tax revenue is $6.6 million. 7 Page

9 Economic Impact of McNeese Salaries. This impact is a purely household or induced impact. To estimate the salaries impact we divided and matched faculty and staff salaries by income brackets with IMPLAN household income brackets. Impact results show that faculty and staff output impact in fiscal year 2014 was $34.4 million in Southwest Louisiana and $38.1 million at the state level through household spending. Household spending by faculty and staff generated 288 jobs and labor income of $11.6 million within the region and 319 jobs and labor income of $12.8 million at the state level. The most impacted industries by faculty and staff spending are food services and drinking places, offices of physicians, dentists, and other health practitioners, private hospitals, real estate establishments. Fiscal Impact of McNeese Salaries. Tax impact from faculty and staff salaries in fiscal year 2014 was estimated at $2.1 million in state and local tax revenue and $2.4 million in federal tax revenue. Economic Impact of McNeese Students Spending. Students at McNeese State University spending create additional economic activity directly within the region and the state through indirect and induced impacts. Students spent an estimated $99.7 million in Southwest Louisiana in Certain student expenditures such as spending on groceries, restaurants, entertainment, books and supplies, clothing, laundry, fuel and others are subject to the state sales tax. The output multiplier for economic activities associated with capital outlays was 1.31 and 1.34 at the regional and state levels respectively in the 2014 fiscal year. For every dollar of students spending, the total economic impact generated within the region was $1.31 and $1.34 within the state. In 2014, Students expenditures generated an economic impact of $130.2 million in Southwest Louisiana and $133.5 million at the state level. These students expenditures supported a total of 1,370 jobs in the region and 1,396 jobs at the state level through indirect and induced effects. Total labor income generated in Southwest Louisiana by these activities was $30.1 million and $31.2 million at the state level in The top industries impacted are real estate establishments, various retail stores (including food and beverage, general merchandise, clothing and clothing accessories, and gasoline stations), and food and drinking places Fiscal Impact of McNeese Student Spending. Students spending generated $12.1 million in state and local tax revenue at the regional level and added another $1.3 million at the state level. In fiscal year 2014, federal tax revenue that is attributable to students spending $9.7 million at the regional level, another $1.1 million at the state level. Economic Impact of McNeese Events. McNeese State University attracts many visitors to Lake Charles, Louisiana through three major visitor categories. The categories are: visitors to various athletic events, visitors of students, and visitors to the various cultural and conferences organized by the University. Visitors included in the economic impact estimation come from outside Lake Charles, as spending from local residents does not add to the total expenditures in the area. Spending by local visitors typically replaces other spending in the local area. At the regional level, events organized by the University 8 Page

10 generated a total output impact of $52.7 million, and 562 total jobs. The total labor income from these events was estimated to be $16.7 million. At the state level total output impact was $54.8 million. This impact includes the impact generated within the University region. Hospitality and tourism industries were among the top 10 industries impacted. Sporting, cultural events, and conferences organized by McNeese State University generated $3.6 million in state and local tax revenue at the regional level and added another $386,886 at the state level. Fiscal Impact of McNeese Events. In term of federal tax revenue, University events generated $2.8 million at the regional level and added another $ 1.2 million at the state level. Total Economic Impact. In the Southwest Louisiana region, the impact from McNeese State University presence, its operations, its faculty and staff salaries, its students spending, and visitors expenditures at the cultural and sporting events organized by the university, is summarized in the following tables. The impacts are estimated at the regional and state levels. The estimated total output impact on the Southwest Louisiana region is $371.6 million in University activities supported 2,762 jobs directly and generated another 1,158 jobs through the indirect and induced impacts. Total labor income that is attributable to the university s presence was $117.5 million. At the state level, the total output impact was $407.8 million. These activities directly supported 3,031 jobs and a total of 3,301 jobs through indirect and induced effects. Total labor income generated by these expenditures was $128.9 million. Total Fiscal Impact. At the regional level, the total state and local tax impact from the combined activities listed above was $22.7 million another $2.2 million in tax revenue is added statewide. Sales tax revenue represents the largest component in this impact category. Federal tax revenue at the regional level was estimated to be $26.1million another $2.5 million is added at the state level. II. McNEESE EDUCATION PREMIUM While the economic and fiscal impacts of McNeese State University on the regional economy s output is $371.6 million in the year 2014/2015, the major contribution of the university to the economy is the increase in human capital and the educational earning premium, which we estimate in this part of the study. This is measured by estimating the incremental human capital generated by the education acquired at McNeese State University. We estimate the incremental human capital - education premium - by using the differential synthetic work-life earnings by educational attainments for the university graduates in one year. With 1,591 degrees granted (121 associates, 1,150 bachelors, 280 masters, 5 graduate certificates, 31 post-bachelor s certificate, and 4 post-master s 9 Page

11 certificate) by McNeese State University in 2014, the study considers the estimated incremental synthetic work-life earning powers as the education premium created by the university in Typically, synthetic work-life earning powers is computed by summing a person s yearly earnings over that person s work-life. The resulting estimate represents what that person would expect to earn over a hypothetical 40-year working life. The work-life earning powers estimates in this section depend upon the following assumptions. Estimates assume cross-sectional earnings are representative of the patterns in future earnings. Median earnings do not take into account factors which may affect earnings (past performance, work history). Estimates do not account for any future productivity gains in the economy. In estimating the synthetic work life earning powers we considered level of education, college major, and average age of undergraduate and graduate students. We also used 2014 median income data by education and training from the Bureau of Labor Statistics (BLS). First, we computed the median income for McNeese State University graduates based on degrees and majors then subtracted the synthetic work life earning powers for the typical worker with high school education. The total education premium from the graduating class of 2014 is approximately $1.4 billion. The average graduate with a bachelor degree would earn nearly $1 million more than a high school graduate over his/her work life and the average graduate with a master degree would earn approximately $1.3 million more than what a high school graduate would earn. In addition to the earning premium a college education offers, there are additional benefits. For decades, the U.S. Bureau of Labor Statistics (BLS) data have shown that workers with more education have lower unemployment and higher earnings than workers with less education. For example, BLS data and figures show, the unemployment rate drops with every additional level of education attained. Workers with less education than a high school diploma had the highest unemployment rate (11 percent), while those with a doctoral degree had the lowest rate (2.2 percent). Earnings by educational attainment generally follow the opposite pattern, peaking for workers with a professional degree a group that includes lawyers and dentists and decreasing as education levels fall. The earnings data in the chart are medians; within each education level, half of workers earned more than the amount shown, and half earned less. 10 Page

12 Figure 1. Unemployment Rate and Earnings by Educational Attainment, 2013 Source: U.S. Bureau of Labor Statistics, Current Population Survey According to data released in January 2014 from BLS, the higher your level of education, the lower your rate of unemployment. In the last decade, as the chart shows, people with higher levels of education consistently had lower unemployment rates than people with lower levels of education. For example, in February 2010 unemployment rates peaked at 15.8 percent for people who had less than a high school diploma. At that time, the unemployment rate for people who had a bachelor s degree or higher also reached a high point, but at 5.0 percent about one-third the rate for people who had less than a high school diploma. Even in times of low unemployment, rates have differed markedly by education. For people with less than a high school diploma, the lowest unemployment rate in the last 10 years was 5.8 percent in October That was more than triple the lowest rate, 1.8 percent, for people with a bachelor s degree or higher. The unemployment rate is the percentage of the labor force that is jobless, has actively looked for a job in the prior 4 weeks, and is currently available for work. (It does not take into account people who would like a job but are not looking for one.) Seasonally adjusted, unemployment rates of people in the labor force ages 25 years and over. 11 Page

13 I. INTRODUCTION Purpose and Scope This study presents key economic features of McNeese State University in the academic year and those aspects of its contribution to Louisiana and more particularly to Southwest Louisiana s economy that can be readily measured. It does not include any assessment of the value of the university s collaboration with business or the impact of new ideas generated by the university or its graduates, any cultural, social and intellectual capital to local economies which is often significantly larger than the economic impact but difficult to quantify. The university is analyzed as a conventional industry, through its economic linkages, highlighting major economic characteristics of McNeese as a state university, including its sources of revenue, employment created, output generated and value added. Estimates are made of the economic activity generated in other sectors of the economy through the secondary multiplier effects of expenditure by the university, its faculty and staff, and its students and visitors. Additional analysis is undertaken of the overall contribution of McNeese State University to improving the synthetic work-life earning of its graduates. Two types of impacts are measured: 1) The economic impact of McNeese University and various activities attributable to the university on the local and state economy using IMPLAN, an input-output modeling software, and IMPLAN s Louisiana Social Accounting Matrix (SAM). The estimation is based on university expenditures, faculty and staff expenditures, student expenditures, sporting and cultural events, and other extra-curricular activities. 2) Education premium which measures the differential earning powers generated by a university education using synthetic work-life earnings. Education, Knowledge Creation and the Common Good The economic impact of McNeese State University and the changing global economy demonstrate that emphasis on higher education and development of a skilled labor force is a requirement for the region to be globally competitive. It is unquestionably the proper way to achieve regional economic development with secure jobs, higher incomes, and greater production of goods and services for local households and businesses and overall improvement in quality of life. Over the last few decades, economists have begun to identify technical progress, or more generally, knowledge creation, as the major determinant of economic growth and development. A 2001 study by the Kentucky Long Term Policy Research Center (Education and the Common Good) found that male and female Bachelors holders lifetime earnings are $357,000 and $156,000 higher than high school graduates. The study also found that Bachelors holders vote more, volunteer more, smoke less, and rely on social assistance 12 Page

14 less. A California study (Return on Investment, 2005) found that college graduates incomes are double that of high school graduates. When comparing students who started college at a 4-year institution with those who started at a community college Monk- Turner (1994) found a 2.5 percent earning return differential by age 27 (7.9 percent vs. 5.4 percent) Jacobson et al. (2005) study estimates 7 percent higher future earnings with each additional year of college. Other studies have looked at spillover impacts of higher education. Lochner and Moretti (2004) found that the presence of more degreed individuals in a regional economy positively impacts productivity and earnings for everyone. They also found that higher education is correlated with less crime, increased civic engagement, lower dependence on welfare, better health outcomes, and more charitable giving. McNeese State University McNeese State University, originally called Lake Charles Junior College, is a public regional university founded in 1939 as a division of Louisiana State University. The university is centrally located in Lake Charles, Louisiana. Its main campus consists of 68 main buildings on more than 120 acres In addition, it includes the Louisiana Environmental Research Center, Burton Coliseum, a 503-acre McNeese farm, a 65-acre Athletic plant, and nearly 1,600 acres of donated farm property used for research, farming, and ranching. The university is accredited by the Southern Association of Colleges and Schools, and all programs of study are accredited by their respective national boards. McNeese State University s purpose and mission statement indicate that McNeese State University is primarily a teaching institution whose mission is successful education of the undergraduate students and services to the employers and communities in its region. McNeese uses a traditional admissions process based on courses completed, GPA, and standardized test scores. The University fulfills its mission with 434 faculty and 386 staff that serve some 7,431 undergraduate students and 811 graduate students in fall Over the last 5 years McNeese State University conferred 7,660 degrees. The university conferred 121 associate degrees, 1,150 bachelor degrees, 280 master s degree, 5 graduate certificates, 31 post-bachelor certificates, and 4 post-master s certificates. Table 1. Historical Degrees Conferred by Gender Female ,037 1,017 Male Total 1,405 1,518 1,535 1,611 1, Page

15 II. THE ECONOMY OF SOUTHWEST LOUISIANA This section provides an overview of the economy and a context for McNeese State University s impact on its catchment area. McNeese is not only a stand-alone economic entity but it is also one of the most important supporting economic pillars affecting every sector and industry in southwest Louisiana economy. A first step is to list the region s main occupations and industries, the importance of each industry as an employer, and as a wealth generating entity. A second step is to evaluate the prospect for growth in each industry. The number of jobs in an area is a primary indicator of local economic health and vitality. It is important for an area's leadership, including colleges and universities, to understand employment conditions in order to develop programs that prepare students to enter the workforce seamlessly. The employment data presented in this analysis were obtained from the U.S. Bureau of Labor Statistics' Census of Employment and Wages 1. Occupations Figure 2 provides a breakdown of the type of occupations in Southwest Louisiana. Most occupations require education. Management, business, science, and arts occupations, represents 29.6 percent of employment followed by sales and office occupations with 24.7 percent, Service occupations with 18.8 percent, natural resources, construction, and maintenance occupations with 13.9 percent, and production, transportation, and material moving occupations with 13.0 percent. Figure 2. Southwest Louisiana Occupations, 2014 Service occupations, 18.8% Sales and ofbice occupations, 24.7% Management, business, science, and arts occupations, 29.6% Other, 26.9% Natural resources, construction, and maintenance occupations, 13.9% Production, transportation, and material moving occupations, 13.0% Source: U.S. Census and U.S. Bureau of Labor Statistics 1 For more information about this data source, you can explore this link: 14 Page

16 Industry Figure 3 shows the distribution of employment by industry, the average annual wage rate, and the percentage change in employment over a 13 years period 2000 to The number of employees within each industry determines the size of each sphere in Figure 3. For example, over the 2000 to 2013 period, Professional, Scientific, and Management, and administrative and waste management services was the fastest growing industry with a growth rate of 38 percent, and the second highest paying industry with an average annual salary of $66,705. Educational services, and health care and social assistance have an average annual salary of $40,159. They are the second fastest growing industries (28.4 percent) and the largest employer (84,263). Employment in manufacturing, the highest paying industry ($67,469), remained virtually unchanged over the 2000 to 2013 period. All industries experienced growth during that same period except for information, and wholesale trade, which declined by 12.1 percent and 13.1 percent respectively. Figures 3. Change in Employment by Industry % 45% 40% 35% 30% Arts, entertainment, and recreation, and accommodation and food services Educational services, and health care and social assistance Professional, scienti?ic, and management, and administrative and waste management services 25% 20% 15% 10% - 10% Agriculture, forestry,?ishing and hunting, and mining Construction Other services, except public administration Public administration Finance and insurance Transportation and warehousing 5% Retail trade Manufacturing 0% - $20,000 - $10,000 $0-5% $10,000 $20,000 $30,000 $40,000 $50,000 $60,000 $70,000 $80,000-15% - 20% - 25% - 30% Source: U.S. Census and U.S. Bureau of Labor Statistics Information Wholesale trade 15 Page

17 Labor Force Participation Labor force participation rate measures the share of Americans who are eligible to work, people that are at least 16 years old, who are either employed or actively looking for work. It does not include people who are not actively looking for work. Figure 4 summarizes the labor participation rate for the U.S., Louisiana, and 12 southwestern Louisiana parishes that represent McNeese State University s principal catchment area. The labor force participation rate in Louisiana and the 12 southwestern parishes are relatively similar and are approximately 3 percent lower that the U.S. labor force participation rate in Figure 4. Labor Force Participation Rate 70.00% 65.00% 60.00% 55.00% 50.00% 64.30% 61.60% 61.0% 45.00% 40.00% U.S Louisiana 12 Southwest Parishes Source: U.S. Census and U.S. Bureau of Labor Statistics Educational Attainment With a global economy increasingly based on knowledge and information, a highly educated labor force is becoming a basic necessity in order for a region or country to be competitive. Unfortunately, the educational attainment in southwest Louisiana is lagging both the state and national average. Figures 5 and 6 summarize the educational attainment in the U.S., Louisiana, and southwest Louisiana for two age groups people between the ages of 18 and 24 years, and 25 years and over. The figures show that southwest Louisiana s population tends to have a lower educational attainment than the state and the U.S. in both groups. In the long run, this relatively lower educational attainment could erode the region s competitiveness. 16 Page

18 Figure 5. Educational Attainment: Population 18 to 24 years 50.00% 45.00% 40.00% 35.00% 32.0% 31.6% 30.20% 45.80% 41.7% 38.7% 30.00% 25.00% 20.0% 19.2% 20.00% 15.00% 10.00% 13.90% 10.10% 7.2% 5.2% 5.00% 0.00% Less than high school graduate High school graduate (includes equivalency) Some college or associate's degree Bachelor's degree or higher Source: U.S. Census and Bureau of Labor Statistics U.S. Louisiana Southwest Louisiana Figure 6. Educational Attainment: Population 25 and over 40.00% 36.7% 35.00% 33.8% 30.00% 25.00% 27.70% 21.5% 21.00% 20.0% 18.70% 20.00% 15.00% 10.00% 5.7% 5.60% 7.6% 11.5% 10.7% 7.50% 8.20% 5.4% 5.6% 15.2% 13.1% 11.40% 7.8% 5.5% 5.00% 0.00% Less than 9th grade 9th to 12th grade no diploma High school graduate (includes equivalency) Some college or associate's degree Associate's degree Bachelor's degree or higher Graduate or professional degree Source: U.S. Census and Bureau of Labor Statistics U.S. Louisiana Southwest Louisiana 17 Page

19 Poverty The percentage of families in 2013 whose income in the past 12 months is below the poverty level is higher in Louisiana and the 12 southwestern parishes than in the U.S. for families with related children under 18 years the poverty rate for Louisiana and the 12 parishes was 22 percent and 21.3 percent respectively compared to 18 percent in the U.S. and 15 percent and 14.6 percent for all families in Louisiana and the 12 southwestern parishes and 11 percent in the U.S. Within the 12 parishes the poverty rate varies significantly. For example Cameron parish has the lowest poverty rate at 5.3 percent for all families and 4.9 percent for families with related children under18 years while St Landry and Evangeline parishes have the highest poverty rates at 21.9 percent for all families in St Landry and 20.6 percent in Evangeline. Table 2. Percentage of Families whose Income in the Past 12 Months is below the Poverty Level All Families With related children under 18 years United States 11.3% 17.8% LA 14.8% 22.4% Acadia 14.8% 18.9% Allen 14.2% 18.3% Beauregard 12.9% 18.9% Calcasieu 13.1% 20.7% Cameron 5.3% 4.9% Evangeline 20.6% 28.9% Iberia 17.6% 24.9% Jefferson Davis 14.8% 21.2% Lafayette 12.7% 18.0% St Landry 21.9% 33.9% Vermillion 13.7% 21.3% Vernon 11.7% 15.6% Source: U.S. Census 18 Page

20 Figure 7. Percentage of Families whose Income in the Past 12 Months is below the Poverty Level 22% 21.3% 18% 15% 14.6% 11% U.S Louisiana 12 Parishes All families With related children under 18 years Source: U.S. Census and Bureau of Labor Statistics Shift Share Analysis Shift share is a regional analysis method that helps answer why employment is growing or declining in a regional industry, cluster, or occupation. Shift share analysis attempts to determine the sources of regional job growth. The analysis determines the share of jobs that are attributed to national trends and shares that are attributed to the regional specific factors. In shift share analysis, change in regional employment over a specified time period is divided into three components: 1- industrial mix effect, 2- national growth effect, and 3- regional competitive effect. Analysis of Employment Changes Southwest Louisiana employment trend over is presented in Figure 8. During that time period, employment grew at an annual rate of 1.55 percent with a high of 369,132 in 2014 and a low of 255,049 in The change in employment raises 4 principal questions: 19 Page

21 1- Has employment growth been steady, or volatile and unpredictable over the years? 2- What industries in the local economy have gained or lost employees? 3- Has there been growth in high wages industries? 4- Have employment changes been driven by local or external forces? To answer these questions we divide the economy into eleven major economic sectors listed in Table 3. Figure 8. Change in Employment 1990 to 2014 Source: University of Georgia Table 3. Employment Changes in Southwest Louisiana, SECTOR PERCENT EMPLOYMENT, EMPLOYMENT, EMPLOYMENT GROWTH, CHANGE Trade, Transportation, and Utilities 60,840 73,649 12, Education and Health Services 32,318 61,015 28, Leisure and Hospitality 19,623 39,445 19, Professional and Business Services 16,696 36,739 20, Manufacturing 30,194 31, Construction 17,502 29,433 11, Natural Resources and Mining 20,334 25,691 5, Financial Activities 12,626 17,519 4, Public Administration 11,771 14,771 3, Other Services 6,080 7,474 1, Information 3,857 4, Page

22 Source: University of Georgia and Bureau of Labor Statistics 231, , ,306 Employment Changes in McNeese State University Catchment Area, Table 3 presents the employment changes from 1990 to 2014 in McNeese State University catchment area. The table divides the employment in all industries including some jobs that Bureau of Labor Statistics (BLS) could not classify into 11 categories. The region had 369,132 employees in The industries are ordered from largest to smallest employer during the latest year selected, Trade, transportation, and utilities sector employed the most workers, followed by education and health services, and the leisure and hospitality sector is third. During the period 1990 to 2014, employment in southwest Louisiana region increased by 109,306 jobs. Education and Health Services experienced largest increase in jobs (28,697 jobs), followed by Professional and Business Services (20,043 jobs), and Leisure and Hospitality (19,822 jobs). The next set of questions to answer is: 1- Are these employment changes consistent with changes during this time period? 2- Did a new employer move into your area? 3- Did an old employer layoff workers or go out of business? Within any single sector it is possible to observe these effects simultaneously. For example, a new large retailer relocating to the region may create a number of jobs, but these new jobs may come at the expense of existing retail jobs at smaller shops, this is also known as a cannibalization effect. The net gain in employment could be either positive or negative. Next the change in employment for the region is decomposed into the three sources that caused the change: 1. The National Growth Component: The first source of change is the growth or contraction in the United States economy. During the time period 1990 to 2014, the nation's employment grew by 25.8 percent. Table 4. Shift-Share Analysis for McNeese Area, Sector National Growth Component, Percent National Growth Component, Jobs Industrial Mix Component, Percent Industrial Mix Component, Jobs Competitive Share Component, Percent Competitive Share Component, Jobs Manufacturing 25.8% 7, % -17, % 10,498 Construction 25.8% 4,512-9% -1, % 9,001 Leisure and Hospitality 25.8% 5, % 5, % 8,810 Education and Health Services 25.8% 8,332 38% 12,283 25% 8,082 Professional and Business Services 25.8% 4,305 55% 9, % 6, Page

23 Trade, Transportation, and Utilities 25.8% 15, % -6, % 4,090 Financial Activities 25.8% 3, % -1, % 3,333 Natural Resources and Mining 25.8% 5, % -1,517 8% 1,631 Public Administration 25.8% 3, % -1, % 1,432 Information 25.8% % -1, % 524 Other Services 25.8% 1, % % 82 59,774-4,501 54,031 Source: University of Georgia The first two columns, the national growth component, in Table 4 list the rate at which employment grew nationally between 1990 and The effect of the national growth component is felt most acutely during recessions and boom times. Local businesses are very aware of how the general business climate affects them. As reported in Table 4, the region's biggest employer, the Trade, Transportation, and Utilities sector, had the highest national growth component, in absolute numbers. The 25.8 percent national growth component led to this sector's employment growing by 15,686 jobs. Overall, the national growth component was responsible for a total of 59,774 jobs in southwest Louisiana. 2. The Industrial Mix Component: This component measures how well an industry has grown, net of effects from the business cycle. The industrial mix component is found by calculating the percent growth rate for a specific industry at the national level and subtracting from it the national growth component. Columns 3 and 4 in Table 4 list these components for each sector. The highest industrial mix component was 55 percent in the Professional and Business Services sector, and it was responsible for 9,191 jobs. If southwest Louisiana's employment were concentrated in these sectors with higher industrial mix components, then the area could expect more employment growth. After adding up across all eleven sectors, it appears that the industrial mix component was responsible for decreasing employment by 4,501 jobs. Thus, the region has a concentration of employment in industries that are decreasing nation-wide, in terms of employment. The majority of these jobs can be attributed to decreases in the manufacturing sector. 3. The Competitive Share: The third and final component of shift-share analysis is called the competitive share. It is the remaining employment change that is left over after accounting for the national and industrial mix components. If a sector's competitive share is positive, then the industry has a local advantage in promoting employment growth. For example, trade, transportation, and utilities sector employment grew by 21.1 percent (from Table 3). Of this 21.1 percent, 25.8 percent was due to the national growth component and percent was due to the industrial mix (from Table 4). This leaves a remainder of 6.7 percent that is attributable to the local conditions facing this industry. For trade, transportation, and utilities sector, the competitive share translated into 4,090 jobs. 22 Page

24 The top three sectors in competitive share were Manufacturing, Construction, and the Leisure and Hospitality sector. Across all sectors, the competitive share component totals to 54,031 jobs. This indicates that southwest Louisiana region is competitive in securing additional employment. A positive competitive share component would indicate that southwest Louisiana has a productive advantage. This advantage could be due to local firms having superior technology, management, or market access, or the local labor force having higher productivity and/or lower wages. A negative competitive share component could be caused by local shortcomings in all these areas. By examining the competitive share components for each industry, we can easily identify which local industries have a positive competitive share component. This also indicates which industries have competitive advantages over other parishes and regions. Local officials can then devise strategies to improve local conditions faced by particular industries selected for focus. These strategies may include specialized training programs for workers and management, improved access to input and product markets through transportation and telecommunications, or arranged financial alternatives for new machinery and equipment. Figure 9. Distribution of 2014 Employment Information Other Services Public Administration Financial Activities Natural Resources and Mining Construction Manufacturing Professional and Business Services Leisure and Hospitality Education and Health Services Trade, Transportation, and Utilities Thousands Source: University of Georgia 23 Page

25 III. ECONOMY OF SOUTHWEST LOUISIANA PARISHES McNeese Demographics and Economic Impact Although, McNeese State University s students originate from 58 Louisiana parishes, 40 different states and 57 different countries. The university serves primarily the southwestern region of Louisiana. The largest share of McNeese State University students come from 12 southwest Louisiana parishes, Acadia, Allen, Beauregard, Calcasieu, Cameron, Evangeline, Jefferson Davis, Iberia, Lafayette, St Landry, Vermillion, and Vernon, shown in Figure 10 below. In fact, these 12 parishes make up percent of McNeese 7,215 in state students and 80 percent of the 8,242 total students. Tables 1, 2 and 3 list students parish, state, and country of origin. Figure 10. McNeese Primary Catchment Area 24 Page

26 Table 5. Enrollment by Parish of Origin PARISH ENROLLMENT PARISH ENROLLMENT Acadia 197 Morehouse 4 Allen 331 Natchitoches 21 Ascension 17 Orleans 31 Assumption 5 Ouachita 28 Avoyelles 18 Plaquemines 1 Beauregard 585 Point Coupee 39 Bossier 16 Rapides 53 Caddo 32 Red River 1 Calcasieu 3,925 Richland 6 Caldwell 4 Sabine 11 Cameron 168 St Bernard 2 Catahoula 2 St Charles 10 Concordia 3 St Helena 1 DeSoto 6 St James 3 East Baton Rouge 64 St John 11 Evangeline 160 St Landry 142 Franklin 1 St Martin 32 Grant 4 St Mary 30 Iberia 84 St Tammany 40 Iberville 8 Tangipahoa 14 Jackson 1 Terrebonne 25 Jefferson 28 Union 2 Jefferson Davis 550 Vermilion 112 Lafayette 165 Vernon 155 Lafourche 13 Washington 11 LaSalle 1 Webster 1 Lincoln 3 West Baton Rouge 9 Livingston 18 West Carroll 5 Madison 1 West Feliciana 5 Total Louisiana Students Source: McNeese State University 7,215 Number of Parishes 58 Table 6. Enrollment by State of Origin STATE ENROLLMENT STATE ENROLLMENT Alabama 4 Missouri 5 Arizona 7 Nebraska 3 Arkansas 4 Nevada 2 California 31 New Jersey 2 Colorado 5 New Mexico 3 Connecticut 2 New York 2 Florida 24 North Carolina 4 Georgia 1 Ohio 6 Idaho 1 Oklahoma 8 Illinois 15 Oregon 2 Indiana 3 Pennsylvania 1 25 Page

27 Iowa 2 Rhode Island 1 Kansas 4 South Carolina 1 Louisiana 7,215 South Dakota 1 Maine 1 Tennessee 5 Maryland 7 Texas 408 Massachusetts 1 Utah 1 Michigan 3 Virginia 3 Minnesota 2 Washington 2 Mississippi 10 Wisconsin 2 Total Out of State 589 Source: McNeese State University Number of States (Other than Louisiana) 40 Table 7. Enrollment by Country of Origin COUNTRY ENROLLMENT COUNTRY ENROLLMENT Australia 1 Latvia 1 Azerbaijan 1 Lebanon 1 Bangladesh 6 Mexico 7 Benin 2 Nepal 90 Bolivia 5 Nigeria 5 Brazil 3 Norway 1 Cameroon 3 Pakistan 1 Canada 15 Peru 2 Chile 2 Philippines 3 China 32 Poland 1 Colombia 7 Romania 5 Czech Republic 1 Russia 1 Ecuador 5 Rwanda 2 France 2 Saudi Arabia 60 Germany 4 Slovakia 2 Greece 6 Spain 3 Guatemala 1 Sweden 3 Hong Kong 1 Syria 1 Hungary 1 Taiwan 2 Iceland 1 Thailand 2 India 47 Trinidad and Tobago 1 Indonesia 9 Turkey 4 Iraq 2 Uganda 1 Ireland 1 United Kingdom 13 Jamaica 5 Venezuela 6 Japan 2 Vietnam 44 Jordan 1 Yemen 1 Kenya 3 Zimbabwe 2 Korea, Republic of 4 Source: McNeese State University Number of Countries (Other than USA) The southwest Louisiana region is the primary beneficiary from the economic activity generated by the university and by its various constituents. The majority of the benefits Page

28 are concentrated in Calcasieu parish and around the immediate 11 southwestern parishes surrounding it. Some benefits leak-out beyond the borders of these 12 parishes to the rest of the state and beyond. Table 8 shows that undergraduate students at McNeese State University make-up 90 percent of the total student population while graduate students make-up the remaining 10 percent. Figure 10 shows the enrollment in fall 2014 by rank. Seniors and freshman constitute percent and percent of total students respectively, followed by sophomores percent, juniors percent, early admission 9.77 percent, and graduate students 10.2 percent. Table 8. Fall 2014 Enrollment by Level Enrollment Percent Undergraduate 7, % Graduate % Total 8, % Source: McNeese State University Figure 11. Enrollment by Rank - Fall 2014 Education Specialist 0.15% Special Graduate 0.58% Non- Credit/Non- Degree 1.97% Masters Candidate 7.50% Early Admissions 9.77% Senior 24.04% Freshman 24.02% Junior 15.40% Sophomore 16.59% Source: McNeese State University Figure 12 shows that percent of the students are enrolled as full-time students while percent attend the university on a part-time basis. Enrollment data in Table 9 show that female make-up close to two thirds of the students. Figure 12 breaks down the enrollment by gender and ethnicity. The data show that females outnumber males in every category except for foreign students. White students represent percent of total student body, followed by black students percent. 27 Page

29 Figure 12. Enrollment by Full-Time/Part-Time Status - Fall ,000 8,000 Part- Time, 2,048 7,000 Part- Time, 1,600 6,000 5,000 4,000 3,000 Full- Time, 5,831 Full- Time, 6,194 2,000 Part- Time, 448 1,000 0 Full- Time, 363 Undergraduate Graduate Total Source: McNeese State University Table 9. Fall 2014 Enrollment by Gender Undergraduate Graduate Total Percent Female 4, , % Male 2, , % Total 7, , % Source: McNeese State University Figure 13. Enrollment by Gender and Ethnicity - Fall 2014 Race/Ethnicity Unknown Two or More Races White Hispanic Hawaiian or Paci?ic Isl Foreign Black Asian Amer Indian/Alaska Native ,695 2, ,000 2,000 Female 3,000 Male 4,000 5,000 6,000 7,000 Source: McNeese State University More than three quarters of McNeese State University students are under the age of 25 years old. The average age of students is years, and a median age of years. Undergraduate students have an average age of 22.3 years and a median age of 20 years 28 Page

30 while graduate students average age is 31.2 years and a median of 28 years. Table 10 lists the average and median age of students. Table 10. Fall 2014 Average Age of Students Average Age Median Age All Students First-Time Freshmen Undergraduate Graduate Source: McNeese State University Figure 14. Enrollment by Age - Fall 2014 Age 40-49, 279 Age 35-39, 274 Age 30-34, 447 Age 50-64, 130 Age Over 64, 14 Age Under 18, 813 Age 25-29, 904 Age 18-19, 2,167 Age 22-24, 1,357 Age 20-21, 1,857 Source: McNeese State University IV. ECONOMIC AND FISCAL IMPACT RESULTS Introduction The economic and fiscal impacts of McNeese State University reach far beyond the immediate environment of the University s physical location. The economic impact of McNeese State University was calculated by accounting for various activities that occur from the presence and operation of the University. Some of these impacts are the direct 29 Page

31 result of University expenditures, while others occur through a number of different sources such as expenditures of faculty and staff, spending of students, expenditures of visitors to the University. The economic impact is estimated at the regional and state levels. The impact at the state level includes the estimated regional impact. Direct annual expenditures from McNeese State University, its faculty and staff, its students, and its visitors have a significant economic impact on the economies of Southwest Louisiana and the state. The impact is estimated using budget data obtained from the University of Louisiana System (UL System) for fiscal year Additional data on salaries were obtained from UL System and added to the appropriate category of University operating expenditures. In addition to budget and salary data, McNeese Office of Facilities and Plant Operations compiled capital expenditures data so that the economic impacts of these expenditures could be calculated. The Dean s Office of the College of Business contacted different McNeese department to provide data on enrollment and on sporting and cultural events at the university. Budget data from UL System in Figure 15 show that between 2009 and 2015 state funding to institutions in the UL System declined by 55 percent while self-generated funding increased by 61 percent. In 2009, state funding represented 62% of total funding. This share declined to 31%, while the share of tuition and fees increased form 38% to 69% over the same period. The overall change in total funding declined by $90.23 million or percent between 2009 and Figure 15. UL System Budget History FY 2009 to FY 2015 Source: Table 11. McNeese State University Funding FY 2009 and 2015 State Funding Self-Generated Total FY $45,427,196 $27,232,488 $72,659,684 FY $19,231,646 $43,689,120 $62,920,766 $ Difference -$26,195,550 $16,456,632 -$9,738,918 % Difference -57.7% 60.4% -13.4% Source: 30 Page

32 Table 11 shows that the annual budget for McNeese State University declined from $72.7 million in 2009 to $62.9 million a decrease of 13.4 percent. Expenditures by McNeese State University in fiscal years 2013 and 2014 are provided in Tables 12 and 13 below by function and by category. According to the expenditures by function data, expenditures on Instruction accounted for 41.2 percent of total expenditures followed by Institutional Services and Academic Support at 11.6 percent and 9.8 percent respectively. Expenditures by category show that Salaries, Related Benefits, and Other Charges are the three biggest expenditure categories accounting for 88.6 percent of total expenditures, with expenditures on salaries alone account for 50 percent of total expenditures. Table 12. McNeese State University Expenditures by Function Actual % Budgeted Expenditures by Function Instruction $25,112, % $25,922, % Research $2,201, % $2,129, % Academic Support $5,475, % $6,189, % Student Services $3,361, % $3,714, % Institutional Services $6,922, % $8,575, % Scholarships/Fellowships $5,038, % $5,038, % Plant Operations/Maintenance $5,517, % $5,693, % Transfers out of agency $2,169, % $1,707, % Athletics $3,163, % $3,350, % Other $1,612, % $598, % Total Expenditures $60,575, % $62,920, % Source: McNeese State University Table 13. McNeese State University Expenditures by Category Actual % Budgeted Expenditures by Expense Category Salaries $29,859, % $31,384, % Other Compensation $275, % $647, % Related Benefits $13,445, % $14,866, % Travel $133, % $159, % Operating Services $2,491, % $3,800, % Supplies $359, % $507, % Professional Services $244, % $246, % Other Charges $10,018, % $9,416, % Interagency Transfers $2,169, % $1,707, % General Acquisitions $592, % $83, % Library Acquisitions $100, % $100, % Major Repairs $885, % $0 0.0% % % 31 Page

33 Total Expenditures $60,575, % $62,920, % Source: McNeese State University As stated previously, The majority of McNeese State University economic impact is concentrated around Calcasieu parish and extends beyond the borders of Louisiana, however, the University s operations and impacts in terms of property owned and constituent residences stretch over the 12 parishes identified above, which includes Acadia, Allen, Beauregard, Calcasieu, Cameron, Evangeline, Jefferson Davis, Iberia, Lafayette, St Landry, Vermillion, and Vernon parishes. As seen in the Table 5 above, the vast majority of students enrolled at McNeese State University reside in the 12 Southwest parishes. Direct annual spending from McNeese State University contributes a significant economic impact to southwest Louisiana and statewide economies. Expenditures, both in and out of the state, from the University totaled $62,9 million in the 2014 fiscal year. The university operation, students, faculty and staff, and visitors provide numerous economic impacts, which are detailed throughout this report. The magnitude of impact diminishes as one moves away from the university physical location in Calcasieu parish and the immediate 11 parishes surrounding Calcasieu parish. Through its local spending, as well as direct and indirect support of jobs, the presence of the University stabilizes and strengthens the local, regional, and statewide tax base. The following tables summarize the economic impact the university has on its catchment area and on the state of Louisiana. The economic impacts of operations on the catchment area and the state are presented in Tables 8 and 9 above. The impact estimated is based on a budget of $62.9 million and does not include the impact from salaries paid to university employees, which represents a separate category of impacts. The impact from salaries paid by the university is computed separately. The total output impact on the region generated by the university operations is $57 million, $33.7 million in direct impact, $8.9 million in indirect impact and $14.3 million in induced impact. The university s operation generates 1,038 FTE jobs, with 859 direct, 58 indirect and 121 induced. Economic Impact of McNeese Operations The annual business expenditures of the university created additional economic activity within the Southwest Louisiana region and throughout the state of Louisiana through indirect and induced impacts. For the Southwest Louisiana region and the state, the output multipliers for economic activities associated with the annual business expenditures was 1.69 and 1.80 respectively in the 2014 fiscal year. This means for every dollar of business expenditures by the University, the total economic impact generated within the region and the state was $1.69 and $1.80. In 2014, these annual business expenditures generated an economic impact of $57.0 million in Southwest Louisiana and $60.8 million in the state. These activities directly supported 859 jobs and a total of 1,038 jobs and 1,067 through indirect and induced effects. Total labor income generated in 32 Page

34 Southwest Louisiana and in the state by the annual business expenditures was $24.1 million and $25.3 million respectively. Table 14. Summary Impact on 12 Immediate Parishes Impact Type Employment Labor Income Total Value-Added Output Direct Effect 859 $16,927,788 $17,348,885 $33,736,245 Indirect Effect 58 $2,354,457 $5,098,926 $8,946,776 Induced Effect 121 $4,805,133 $8,745,827 $14,325,853 Total Effect 1,038 $24,087,378 $31,193,638 $57,008,875 Table 15. Summary Impact on the State Impact Type Employment Labor Income Total Value-Added Output Direct Effect 859 $16,927,788 $17,348,885 $33,736,245 Indirect Effect 68 $2,741,598 $5,937,337 $10,417,886 Induced Effect 141 $5,595,236 $10,183,895 $16,681,439 Total Effect 1,067 25,264,622 33,470,117 60,835,570 The top 10 impacted industries by employment at the regional level are the University (859 jobs), real estate establishments (23 jobs), food services and drinking places (17 jobs), offices of physicians (7 jobs), dentists, and other health practitioners (6 jobs), private hospitals (5 jobs), nursing and residential care facilities (5 jobs), retail stores - general merchandise (5 jobs), private household operations (5 jobs), other state and local government enterprises (5 jobs), and services to buildings and dwellings (5 jobs). Table 16. Top 10 Industries in the 12 Immediate Parishes Impacted Description Employment Labor Income Value-Added Output Private junior colleges, colleges, universities, and professional schools 859 $16,927,788 $17,348,885 $33,736,245 Real estate establishments 23 $272,174 $1,994,405 $2,385,507 Food services and drinking places 17 $354,699 $546,269 $1,030,932 Offices of physicians, dentists, and other health 7 $606,809 $626,470 $1,029,077 practitioners Private hospitals 6 $408,889 $446,445 $895,314 Nursing and residential care facilities 5 $139,782 $160,634 $275,483 Retail Stores - General merchandise 5 $129,002 $201,057 $247,489 Private household operations 5 $39,484 $39,484 $41,945 Other state and local government enterprises 5 $316,076 $252,989 $1,354,379 Services to buildings and dwellings 5 $94,005 $124,061 $269, Page

35 Table 17. Top 10 Industries in the State Impacted Description Employment Labor Income Value-Added Output Private junior colleges, colleges, universities, and professional schools 859 $16,927,788 $17,348,885 $33,736,245 Real estate establishments 27 $316,927 $2,322,343 $2,777,754 Food services and drinking places 20 $413,022 $636,091 $1,200,447 Offices of physicians, dentists, and other health 8 $706,586 $729,480 $1,198,287 practitioners Private hospitals 7 $476,122 $519,854 $1,042,530 Nursing and residential care facilities 6 $162,766 $187,047 $320,780 Retail Stores - General merchandise 6 $150,214 $234,117 $288,183 Private household operations 6 $45,976 $45,976 $48,842 Other state and local government enterprises 6 $368,048 $294,588 $1,577,078 Services to buildings and dwellings 6 $109,462 $144,460 $313,413 Fiscal Impact of McNeese Operations It is a common misperception that public universities do not generate tax revenue. The presence of public universities generates significant tax impact through indirect and induced impacts, and through spending by its various constituency. State and local government tax revenues attributable to the presence of McNeese State University totaled $2.4 million ($1.1 million sales tax revenue) in fiscal year The University presence also generates $2.8 million is federal tax revenue in the form of dividends, social insurance tax, excise tax, custom duty, corporate profits tax, and personal income tax. Specific taxes, generated at the state and local level, are presented in the table below. Table 18. State and Local Tax Impact in the 12 Immediate Parishes Tax on Production and Imports Households Corporations Description Employee Compensation Proprietor Income Dividends $2,421 Social Ins Tax- Employee Contribution $17,570 Social Ins Tax- Employer Contribution $40,708 Imports: Sales Tax $1,102,506 Imports: Property Tax $373, Page

36 Imports: Motor Vehicle $4,691 Lic Imports: Severance Tax $75,037 Imports: Other Taxes $70,494 Imports: S/L NonTaxes $220,336 Corporate Profits Tax $56,660 Personal Tax: Income Tax $280,961 Personal Tax: NonTaxes (Fines- Fees $89,622 Personal Tax: Motor Vehicle License $7,771 Personal Tax: Property Taxes $7,065 Personal Tax: Other Tax (Fish/Hunt) $17,187 Total State and Local Tax $58,278 $1,846,912 $402,606 $59,081 Table 19. State and Local Tax Impact in the State Description Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Dividends $2,819 Social Ins Tax- Employee Contribution $20,459 Social Ins Tax- Employer Contribution $47,402 Imports: Sales Tax $1,283,790 Imports: Property Tax $435,318 Imports: Motor Vehicle $5,462 Lic Imports: Severance Tax $87,375 Imports: Other Taxes $82,085 Imports: S/L NonTaxes $256,566 Corporate Profits Tax $65,977 Personal Tax: Income Tax $327,159 Personal Tax: NonTaxes (Fines- Fees $104,358 Personal Tax: Motor Vehicle License $9,049 Personal Tax: Property Taxes $8, Page

37 Personal Tax: Other Tax (Fish/Hunt) Total State and Local Tax $20,013 $67,861 $2,150,597 $468,806 $68,796 Table 20. Federal Tax Impact in the 12 Immediate Parishes Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Description Social Ins Tax- Employee Contribution $1,154,651 $76,159 Social Ins Tax- Employer Contribution $1,138,251 Imports: Excise Taxes $114,319 Imports: Custom Duty $44,850 Imports: Fed NonTaxes $76,370 Corporate Profits Tax $351,773 Personal Tax: Income Tax $1,312,277 Total Federal Tax $2,292,902 $76,159 $235,539 $1,312,277 $351,773 Table 21. Federal Tax Impact in the State Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Description Social Ins Tax- Employee Contribution $1,344,509 $88,682 Social Ins Tax- Employer Contribution $1,325,412 Imports: Excise Taxes $133,116 Imports: Custom Duty $52,225 Imports: Fed NonTaxes $88,927 Corporate Profits Tax $409,615 Personal Tax: Income Tax $1,528,053 Total Federal Tax $2,669,922 $88,682 $274,268 $1,528,053 $409,615 Economic Impact of McNeese Capital Expenditures The table below presents the University s capital expenditures projects. Some of these projects will be undertaken over a time period that exceed one year. To estimate the capital expenditures impact we computed an average annual capital expenditures budget. Table 22. Capital Outlays at McNeese 36 Page

38 Expended Over the Last Five Years (Completed Projects) ADA Improvements, Phase I $1,289,778 Band Hall Renovation and Addition $1,733,347 Burton Dormitory Rebuild $7,500,000 Demolish Pine Haven $500,624 Doland Field House Addition and Renovation $2,557,744 Fine Arts Addition $15,065,540 Kaufman Hall Renovation and Repairs $4,767,923 Nolan Pavilion $704,696 Parking Garage $13,850,000 Quadrangle Renovation $1,091,300 SEED Center $14,400,000 Small Capital Improvements o 77 Agency-Funded Projects in Fiscal Year 2011 $2,263,163 o 106 Agency-Funded Projects in Fiscal Year 2012 $1,653,294 o 84 Agency-Funded Projects in Fiscal Year 2013 $1,349,699 o 86 Agency-Funded Projects in Fiscal Year 2014 $1,839,749 o 56 Agency-Funded Projects in Fiscal Year 2015 $746,398 Currently Budgeted with Planned Starts within next 2 Years ADA Improvements, Phase II ($158, YTD, design expense) $4,707,122 Frasch Annex ($266,977.76, design expense) $6,448,323 H&HP Building ($1,550, YTD, design expense) $44,014,360 Contraband Bayou Beautification ($154, YTD, design expense) $5,700,000 Renovation of Fine Arts ($9, YTD, design expense) $4,257,856 Holbrook Walkway Canopy (no expenditures yet) $1,750,000 Construction in Progress & Small Improvements in Current Fiscal Year Library Renovation ($4,224, YTD, design & constr. expense) $7,519,515 Alpha Hall Renovations (247, YTD, design & constr. expense) $2,028,382 Small Capital Improvements (on-going) $634,972 o 35 Agency-Funded Projects in Current Fiscal Year 2016 (to date) The direct expenditures from capital outlays activities at McNeese State University create additional economic activity within the region and the state through indirect and induced impacts. The output multiplier for economic activities associated with capital outlays was 1.67, for both the region and the state in the 2014 fiscal year. This means for every dollar of capital expenditures at the University, the total economic impact generated within the state was $1.67. In 2014, capital expenditures activities generated an economic impact of $97.4 million in Southwest Louisiana and $106.1 million at the state level. The capital expenditures directly supported a total of 662 jobs in the region and 722 jobs at the state level through indirect and induced effects. Total labor income generated in Southwest 37 Page

39 Louisiana by these activities was $35.0 million and $38.2 million at the state level in Table 23. Summary Impact of McNeese Capital Expenditures on 12 Immediate Parishes Impact Type Employment Labor Income Value-Added Output Direct Effect 370 $21,317,223 $23,902,340 $58,153,639 Indirect Effect 117 $6,766,194 $9,749,267 $18,398,372 Induced Effect 176 $6,979,110 $12,715,422 $20,810,510 Total Effect 662 $35,062,528 $46,367,029 $97,362,521 Table 24. Summary Impact of McNeese Capital Expenditures on the State Impact Type Employment Labor Income Value-Added Output Direct Effect 403 $23,231,515 $26,048,775 $63,375,848 Indirect Effect 127 $7,373,800 $10,624,754 $20,050,550 Induced Effect 191 $7,605,836 $13,857,269 $22,679,298 Total Effect 722 $38,211,150 $50,530,798 $106,105,696 Table 25. Top 10 Industries in the 12 Immediate Parishes Impacted by McNeese Capital Expenditures Description Employment Labor Income Value-Added Output Food services and drinking places 331 $18,129,223 $20,661,008 $52,611,963 Hotels and motels, including casino hotels 69 $5,587,164 $5,680,632 $9,712,124 Amusement parks, arcades, and gambling 25 $503,746 $775,815 $1,464,135 industries Museums, historical sites, zoos, and parks 12 $147,189 $1,078,557 $1,290,061 Other amusement and recreation industries 10 $877,982 $906,430 $1,488,955 Real estate establishments 9 $590,554 $644,796 $1,293,093 Services to buildings and dwellings 9 $277,918 $299,640 $372,754 Offices of physicians, dentists, and other 9 $643,570 $1,144,070 $1,226,667 health practitioners Private hospitals 8 $227,855 $355,123 $437,135 Employment services 8 $213,506 $308,077 $396,038 Table 26. Top 10 Industries in the State Impacted by McNeese Capital Expenditures Description Employment Labor Income Value-Added Output Food services and drinking places 360 $19,757,231 $22,516,371 $57,336, Page

40 Hotels and motels, including casino hotels 76 $6,088,893 $6,190,754 $10,584,275 Amusement parks, arcades, and gambling 27 $548,982 $845,483 $1,595,615 industries Museums, historical sites, zoos, and parks 13 $160,407 $1,175,411 $1,405,909 Other amusement and recreation industries 11 $956,825 $987,827 $1,622,664 Real estate establishments 10 $643,586 $702,699 $1,409,213 Services to buildings and dwellings 10 $302,875 $326,547 $406,227 Offices of physicians, dentists, and other 10 $701,363 $1,246,808 $1,336,822 health practitioners Private hospitals 9 $248,317 $387,013 $476,390 Employment services 8 $232,678 $335,743 $431,603 Fiscal Impact of McNeese Capital Expenditures As discussed earlier, the presence of McNeese State University has significant impact on the tax revenues paid to state, local, and federal governments indirectly through various University constituents. In the fiscal year 2014, the estimated state and local tax revenue that is attributable to capital expenditures is $2.6 million and the federal tax revenue is $6.6 million. Table 27. State and Local Tax Impact in the 12 Immediate Parishes Description Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Dividends $4,438 Social Ins Tax- Employee Contribution Social Ins Tax- Employer Contribution Imports: Sales Tax Imports: Property Tax Imports: Motor Vehicle Lic Imports: Severance Tax Imports: Other Taxes Imports: S/L NonTaxes $23,466 $54,369 $1,109,882 $376,348 $4,723 $75,539 $70,966 $221,810 Corporate Profits Tax $103,851 Personal Tax: Income Tax $411, Page

41 Personal Tax: NonTaxes (Fines- Fees Personal Tax: Motor Vehicle License Personal Tax: Property Taxes Personal Tax: Other Tax (Fish/Hunt) $131,130 $11,370 $10,337 $25,147 Total State and Local Tax $77,835 $1,859,268 $589,068 $108,289 Table 28. McNeese Constituents State and Local Tax Impact in the State Description Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Dividends $4,837 Social Ins Tax- Employee Contribution $25,573 Social Ins Tax- Employer Contribution $59,251 Imports: Sales Tax $1,209,550 Imports: Property Tax $410,144 Imports: Motor Vehicle Lic $5,147 Imports: Severance Tax $82,322 Imports: Other Taxes $77,339 Imports: S/L NonTaxes $241,729 Corporate Profits Tax $113,177 Personal Tax: Income Tax $447,999 Personal Tax: NonTaxes (Fines- Fees $142,906 Personal Tax: Motor Vehicle License $12,391 Personal Tax: Property Taxes $11,265 Personal Tax: Other Tax (Fish/Hunt) $27,405 Total State and Local Tax $84,825 $2,026,231 $641,966 $118,013 Table 29. McNeese Constituents Federal Tax Impact in the 12 Immediate Parishes Description Social Ins Tax- Employee Contribution Employee Compensation Proprietor Income $1,542,131 $233,160 Tax on Production and Imports Households Corporations 40 Page

42 Social Ins Tax- Employer Contribution Imports: Excise Taxes Imports: Custom Duty Imports: Fed NonTaxes $1,520,227 $115,084 $45,150 $76,881 Corporate Profits Tax $644,763 Personal Tax: Income Tax $1,920,044 Total Federal Tax $3,062,358 $233,160 $237,115 $1,920,044 $644,763 Table 30. McNeese Constituents Federal Tax Impact in the State Description Social Ins Tax- Employee Contribution Social Ins Tax- Employer Contribution Imports: Excise Taxes Imports: Custom Duty Imports: Fed NonTaxes Employee Compensation Proprietor Income $1,680,615 $254,098 $1,656,744 Tax on Production and Imports $125,419 $49,204 $83,785 Households Corporations Corporate Profits Tax $702,663 Personal Tax: Income Tax $2,092,464 Total Federal Tax $3,337,358 $254,098 $258,408 $2,092,464 $702,663 Economic Impact of McNeese Salaries The summary impact of faculty and staff salaries is presented in Tables 31 and 32. The impact is a purely household or induced impact. To estimate the salaries impact we divided and matched faculty and staff salaries by income brackets with IMPLAN household income brackets. The tables below show that faculty and staff output impact in fiscal year 2014 was $34.4 million in Southwest Louisiana and $38.1 million at the state level through household spending. Household spending by faculty and staff generated 288 jobs and labor income of $11.6 million within the region and 319 jobs and labor income of $12.8 million at the state level. The most impacted industries by faculty and staff spending are food services and drinking places, offices of physicians, dentists, and other health practitioners, private hospitals, real estate establishments. Table 33 and 34 present the top 10 industries impacted at the regional and state levels. Table 31. Summary Impact of McNeese Salaries on 12 Immediate Parishes Impact Type Employment Labor Income Total Value-Added Output 41 Page

43 Direct Effect - $ - $ - $ - Indirect Effect - $ - $ - $ - Induced Effect 288 $11,560,808 $20,813,133 $34,374,756 Total Effect 288 $11,560,808 $20,813,133 $34,374,756 Table 32. Summary Impact of McNeese Salaries on the State Impact Type Employment Labor Income Total Value-Added Output Direct Effect - $ - $ - $ - Indirect Effect - $ - $ - $ - Induced Effect 319 $12,820,705 $23,081,349 $38,120,918 Total Effect 319 $12,820,705 $23,081,349 $38,120,918 Table 33. Top 10 Industries in the 12 Immediate Parishes Impacted Description Employment Labor Income Total Value- Added Output Food services and drinking places ,600 1,000,443 1,888,059 Offices of physicians, dentists, and other health practitioners 18 1,492,394 1,540,750 2,530,928 Private hospitals 16 1,037,592 1,132,893 2,271,936 Real estate establishments ,447 1,432,174 1,713,022 Nursing and residential care facilities , , ,270 Retail Stores - General merchandise , , ,832 Private household operations 10 85,523 85,523 90,854 Retail Stores - Food and beverage , , ,253 Individual and family services 8 175, , ,668 Wholesale trade businesses 7 522, , ,390 Table 34. Top 10 Industries in the State Impacted Description Employment Labor Income Total Value- Added Output Food services and drinking places 35 $720,393 $1,109,471 $2,093,820 Offices of physicians, dentists, and other 20 $1,655,035 $1,708,661 $2,806,749 health practitioners Private hospitals 18 $1,150,669 $1,256,356 $2,519,532 Real estate establishments 18 $216,747 $1,588,252 $1,899,707 Nursing and residential 13 $385,041 $442,479 $758, Page

44 care facilities Retail Stores - General merchandise Private household operations Retail Stores - Food and beverage Individual and family services Wholesale trade businesses 11 $319,565 $498,058 $613, $94,843 $94,843 $100, $299,079 $431,555 $554,771 9 $194,689 $185,154 $304,601 8 $579,725 $1,030,573 $1,104,977 Fiscal Impact of McNeese Salaries Tables 35 and 36 summarize the state and local tax impact, and the federal tax impact. Tax impact from faculty and staff salaries in fiscal year 2014 was estimated at $2.1 million in state and local tax revenue and $2.4 million in federal tax revenue. Table 35. State and Local Tax Impact in the 12 Immediate Parishes Description Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Dividends $3,495 Social Ins Tax- Employee Contribution $7,640 Social Ins Tax- Employer Contribution $17,702 Imports: Sales Tax $1,058,901 Imports: Property Tax $359,061 Imports: Motor Vehicle Lic $4,506 Imports: Severance Tax $72,070 Imports: Other Taxes $67,706 Imports: S/L NonTaxes $211,621 Corporate Profits Tax $81,792 Personal Tax: Income Tax $135,639 Personal Tax: NonTaxes (Fines- Fees $43,267 Personal Tax: Motor Vehicle License $3,752 Personal Tax: Property Taxes $3,411 Personal Tax: Other $8, Page

45 Tax (Fish/Hunt) Total State and Local Tax $25,342 $1,773,864 $194,366 $85,288 Table 36. State and local tax impact in the state Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Description Dividends $3,876 Social Ins Tax- Employee Contribution $8,473 Social Ins Tax- Employer Contribution $19,631 Imports: Sales Tax $1,174,300 Imports: Property Tax $398,191 Imports: Motor Vehicle Lic $4,997 Imports: Severance Tax $79,924 Imports: Other Taxes $75,085 Imports: S/L NonTaxes $234,683 Corporate Profits Tax $90,706 Personal Tax: Income Tax $150,421 Personal Tax: NonTaxes (Fines- Fees $47,982 Personal Tax: Motor Vehicle License $4,161 Personal Tax: Property Taxes $3,783 Personal Tax: Other Tax (Fish/Hunt) $9,201 Total State and Local Tax $28,104 $1,967,181 $215,548 $94,582 Table 37. Federal Tax Impact in the 12 Immediate Parishes Employee Compensation Proprietor Income Description Social Ins Tax- Employee Contribution $502,106 $82,493 Social Ins Tax- Employer Contribution $494,974 Imports: Excise Taxes $109,798 Imports: Custom Duty $43,076 Tax on Production and Imports Households Corporations 44 Page

46 Imports: Fed NonTaxes $73,349 Corporate Profits Tax $507,810 Personal Tax: Income Tax $633,528 Total Federal Tax $997,080 $82,493 $226,223 $633,528 $507,810 Table 38. Federal Tax Impact in the State Description Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Social Ins Tax- Employee Contribution $556,826 $91,483 Social Ins Tax- Employer Contribution $548,916 Imports: Excise Taxes $121,764 Imports: Custom Duty $47,770 Imports: Fed NonTaxes $81,343 Corporate Profits Tax $563,151 Personal Tax: Income Tax $702,570 Total Federal Tax $997,080 $82,493 $226,223 $633,528 $507,810 Economic Impact of McNeese Students Spending Students at McNeese State University spending create additional economic activity directly within the region and the state through indirect and induced impacts. Students spent an estimated $99.7 million in Southwest Louisiana in Certain student expenditures such as spending on groceries, restaurants, entertainment, books and supplies, clothing, laundry, fuel and others are subject to the state sales tax. The output multiplier for economic activities associated with capital outlays was 1.31 and 1.34 at the regional and state levels respectively in the 2014 fiscal year. For every dollar of students spending, the total economic impact generated within the region was $1.31 and $1.34 within the state. In 2014, Students expenditures generated an economic impact of $130.2 million in Southwest Louisiana and $133.5 million at the state level. These students expenditures supported a total of 1,370 jobs in the region and 1,396 jobs at the state level through indirect and induced effects. Total labor income generated in Southwest Louisiana by these activities was $30.1 million and $31.2 million at the state level in The top industries impacted are real estate establishments, various retail stores (including food and beverage, general merchandise, clothing and clothing accessories, and gasoline stations), and food and drinking places 45 Page

47 Table 39. Summary Impact on 12 Immediate Parishes Impact Type Employment Labor Income Value-Added Output Direct Effect 1,123 $20,059,264 $79,776,344 $99,685,949 Indirect Effect 95 $4,070,556 $7,577,683 $12,630,384 Induced Effect 151 $5,985,677 $10,912,656 $17,850,091 Total Effect 1,370 $30,115,497 $98,266,683 $130,166,423 Table 40. Summary Impact on the State Impact Type Employment Labor Income Value-Added Output Direct Effect 1,123 $20,059,264 $79,776,344 $99,685,949 Indirect Effect 105 $4,514,165 $8,403,499 $14,006,844 Induced Effect 167 $6,637,996 $12,101,917 $19,795,394 Total Effect 1,396 $31,211,425 $100,281,761 $133,488,187 Table 41. Top 10 Industries in the 12 Immediate Parishes Impacted Description Employment Labor Income Value-Added Output Real estate establishments 715 $8,550,941 $62,658,558 $74,945,867 Retail Stores - Food and beverage 215 $5,999,135 $8,656,433 $11,127,992 Retail Stores - Miscellaneous 147 $3,456,061 $5,291,343 $7,642,581 Retail Stores - General merchandise 28 $763,637 $1,190,166 $1,465,022 Retail Stores - Clothing and clothing accessories 25 $501,747 $722,092 $1,268,302 Retail Stores - Gasoline stations 22 $648,834 $1,104,163 $1,486,773 Food services and drinking places 21 $435,842 $671,236 $1,266,773 Telecommunications 15 $962,119 $3,268,128 $5,468,778 Services to buildings and dwellings 10 $210,747 $278,128 $603,414 Offices of physicians, dentists, and other health practitioners 9 $751,106 $775,443 $1,273,789 Table 42. Top 10 Industries in the State Impacted Description Employment Labor Income Value-Added Output Real estate establishments 793 $9,482,823 $69,487,089 $83,113,469 Retail Stores - Food and beverage Retail Stores - Miscellaneous Retail Stores - General merchandise Retail Stores - Clothing and clothing accessories 238 $6,652,921 $9,599,811 $12,340, $3,832,703 $5,867,994 $8,475, $846,858 $1,319,870 $1,624, $556,427 $800,786 $1,406, Page

48 Retail Stores - Gasoline stations 24 $719,544 $1,224,495 $1,648,802 Food services and drinking places 23 $483,340 $744,387 $1,404,826 Telecommunications 17 $1,066,971 $3,624,289 $6,064,766 Services to buildings and dwellings 11 $233,714 $308,438 $669,174 Offices of physicians, dentists, and other health practitioners 10 $832,962 $859,951 $1,412,607 Fiscal Impact of McNeese Student Spending Tables 43 and 44 summarize the state and local tax impact at the regional and state levels. Students spending generated $12.1 million in state and local tax revenue at the regional level and added another $1.3 million at the state level. In fiscal year 2014, federal tax revenue that is attributable to students spending $9.7 million at the regional level, another $1.1 million at the state level. Table 43. State and Local Tax Impact in the 12 Immediate Parishes Tax on Production and Employee Proprietor Description Compensation Income Imports Households Corporations Dividends $26,963 Social Ins Tax- Employee Contribution $18,966 Social Ins Tax- Employer Contribution $43,943 Imports: Sales Tax $6,463,817 Imports: Property Tax $2,191,807 Imports: Motor Vehicle Lic $27,505 Imports: Severance Tax $439,932 Imports: Other Taxes $413,297 Imports: S/L NonTaxes $1,291,793 Corporate Profits Tax $630,927 Personal Tax: Income Tax $354,271 Personal Tax: NonTaxes (Fines- Fees $113,008 Personal Tax: Motor $9, Page

49 Vehicle License Personal Tax: Property Taxes Personal Tax: Other Tax (Fish/Hunt) Total State and Local Tax $8,908 $21,672 $62,909 $10,828,150 $507,657 $657,890 Table 44. State and Local Tax Impact in the State Description Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Dividends $29,901 Social Ins Tax- Employee Contribution $21,033 Social Ins Tax- Employer Contribution $48,732 Imports: Sales Tax $7,168,244 Imports: Property Tax $2,430,670 Imports: Motor Vehicle Lic $30,502 Imports: Severance Tax $487,876 Imports: Other Taxes $458,338 Imports: S/L NonTaxes $1,432,573 Corporate Profits Tax $699,685 Personal Tax: Income Tax $392,879 Personal Tax: NonTaxes (Fines- Fees $125,324 Personal Tax: Motor Vehicle License $10,867 Personal Tax: Property Taxes $9,879 Personal Tax: Other Tax (Fish/Hunt) $24,034 Total State and Local Tax $69,765 $12,008,203 $562,983 $729,587 Table 45. Federal Tax Impact in the 12 Immediate Parishes Description Employee Compensation Proprietor Income Social Ins Tax- Employee Contribution $1,246,403 $269,206 Social Ins Tax- $1,228,700 Tax on Production and Imports Households Corporations 48 Page

50 Employer Contribution Imports: Excise Taxes $670,237 Imports: Custom Duty $262,946 Imports: Fed NonTaxes $447,744 Corporate Profits Tax $3,917,128 Personal Tax: Income Tax $1,654,689 Total Federal Tax $2,475,103 $269,206 $1,380,926 $1,654,689 $3,917,128 Table 46. Federal Tax Impact in the State Description Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Social Ins Tax- Employee Contribution $1,382,236 $298,544 Social Ins Tax- Employer Contribution $1,362,604 Imports: Excise Taxes $743,279 Imports: Custom Duty $291,601 Imports: Fed NonTaxes $496,539 Corporate Profits Tax $4,344,017 Personal Tax: Income Tax $1,835,017 Total Federal Tax $2,744,840 $298,544 $1,531,420 $1,835,017 $4,344,017 Economic Impact of McNeese Events McNeese State University attracts many visitors to Lake Charles, Louisiana through three major categories. The categories are: visitors to various athletic events, visitors of students, and visitors to the various cultural and conferences organized by the University. Visitors included in the economic impact estimation come from outside Lake Charles, as spending from local residents does not add to the total expenditures in the area. Spending by local visitors typically replaces other spending in the local area. The following tables present the economic impact from sporting and cultural events at the University. The numbers show that at the regional level, events organized by the University generated a total output impact of $52.7 million, and 562 total jobs. The total labor income from these events was estimated to be $16.7 million. At the state level total output impact was $54.8 million. This impact includes the impact generated within the University region. Hospitality and tourism industries were among the top 10 industries impacted. 49 Page

51 Table 47. Summary Impact on 12 Immediate Parishes Impact Type Employment Labor Income Value-Added Output Direct Effect ,272,208 18,332,862 33,404,915 Indirect Effect 69 3,083,780 5,267,235 9,379,818 Induced Effect 84 3,323,946 6,052,799 9,910,628 Total Effect ,679,934 29,652,897 52,695,361 Table 48. Summary Impact on the State Impact Type Employment Labor Income Value-Added Output Direct Effect 409 $10,272,208 $18,332,862 $33,404,915 Indirect Effect 77 $3,419,850 $5,841,258 $10,402,031 Induced Effect 93 $3,686,190 $6,712,433 $10,990,688 Total Effect 579 $17,378,248 $30,886,554 $54,797,634 Table 49. Top 10 Industries in the 12 Immediate Parishes Impacted Description Employment Labor Income Value-Added Output Food services and drinking places 263 $5,392,728 $8,305,294 $15,673,941 Hotels and motels, including casino hotels 92 $3,152,940 $6,225,027 $11,234,242 Amusement parks, arcades, and gambling industries 32 $839,926 $2,240,955 $3,729,764 Museums, historical sites, zoos, and parks 19 $645,088 $1,175,168 $2,146,220 Other amusement and recreation industries 18 $302,604 $569,091 $990,780 Real estate establishments 11 $134,107 $982,690 $1,175,395 Services to buildings and dwellings 7 $138,933 $183,353 $397,793 Offices of physicians, dentists, and other health practitioners 5 $419,002 $432,578 $710,579 Private hospitals 4 $282,100 $308,010 $617,693 Employment services 4 $135,167 $145,731 $181,291 Table 50. Top 10 Industries in the State Impacted Description Employment Labor Income Value-Added Output Food services and drinking places 292 $5,980,428 $9,210,405 $17,382,087 Hotels and motels, including casino hotels 102 $3,496,547 $6,903,431 $12,458,550 Amusement parks, arcades, and gambling industries 35 $931,461 $2,485,174 $4,136,234 Museums, historical sites, zoos, and parks 21 $715,390 $1,303,238 $2,380,115 Other amusement and recreation industries 20 $335,582 $631,111 $1,098,755 Real estate establishments 12 $148,722 $1,089,784 $1,303,490 Services to buildings and dwellings 8 $154,074 $203,335 $441, Page

52 Offices of physicians, dentists, and other health practitioners 6 $464,665 $479,720 $788,018 Private hospitals 4 $312,843 $341,577 $685,009 Employment services 4 $149,898 $161,613 $201,048 Sporting, cultural events, and conferences organized by McNeese State University generated $3.6 million in state and local tax revenue at the regional level and added another $386,886 at the state level. Fiscal Impact of McNeese Events In term of federal tax revenue, University events generated $2.8 million at the regional level and added another $ 1.2 million at the state level. Table 51. State and Local Tax Impact in the 12 Immediate Parishes Description Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Dividends $4,557 Social Ins Tax- Employee Contribution $11,690 Social Ins Tax- Employer Contribution $27,084 Imports: Sales Tax $1,862,845 Imports: Property Tax $631,670 Imports: Motor Vehicle Lic $7,927 Imports: Severance Tax $126,787 Imports: Other Taxes $119,110 Imports: S/L NonTaxes $372,289 Corporate Profits Tax $106,628 Personal Tax: Income Tax $195,035 Personal Tax: NonTaxes (Fines- Fees $62,213 Personal Tax: Motor Vehicle License $5,394 Personal Tax: Property Taxes $4,904 Personal Tax: Other Tax (Fish/Hunt) $11,931 Total State and Local Tax $38,773 $3,120,628 $279,478 $111, Page

53 Table 52. State and Local Tax Impact in the State Description Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Dividends $5,054 Social Ins Tax- Employee Contribution $12,964 Social Ins Tax- Employer Contribution $30,036 Imports: Sales Tax $2,065,858 Imports: Property Tax $700,509 Imports: Motor Vehicle Lic $8,791 Imports: Severance Tax $140,604 Imports: Other Taxes $132,091 Imports: S/L NonTaxes $412,861 Corporate Profits Tax $118,248 Personal Tax: Income Tax $216,290 Personal Tax: NonTaxes (Fines- Fees $68,993 Personal Tax: Motor Vehicle License $5,982 Personal Tax: Property Taxes $5,438 Personal Tax: Other Tax (Fish/Hunt) $13,231 Total State and Local Tax $43,000 $3,460,714 $309,934 $123,302 Table 53. Federal Tax Impact in the 12 Immediate Parishes Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Description Social Ins Tax- Employee Contribution $768,208 $80,406 Social Ins Tax- Employer Contribution $757,297 Imports: Excise Taxes $193,159 Imports: Custom Duty $75,780 Imports: Fed NonTaxes $129,038 Corporate Profits Tax $662,005 Personal Tax: Income Tax $910,947 Total Federal Tax $1,525,504 $80,406 $397,977 $910,947 $662, Page

54 Table 54. Federal Tax Impact in the State Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Description Social Ins Tax- Employee Contribution $851,927 $89,169 Social Ins Tax- Employer Contribution $839,827 Imports: Excise Taxes $214,209 Imports: Custom Duty $84,039 Imports: Fed NonTaxes $143,101 Corporate Profits Tax $734,150 Personal Tax: Income Tax $1,010,222 Total Federal Tax $1,691,755 $89,169 $441,349 $1,010,222 $734,150 Total Economic Impact In the Southwest Louisiana region, the impact from McNeese State University presence, its operations, its faculty and staff salaries, its students spending, and visitors expenditures at the cultural and sporting events organized by the university, is summarized in the following tables. Tables 55 and 56 present the total summary impact, Tables 57 and 58 list the top 10 industries, and Tables 59 to 62 present the state and local tax impact, and the federal tax impact. The impacts are estimated at the regional and state levels. The estimated total output impact on the Southwest Louisiana region is $371.6 million in University activities supported 2,762 jobs directly and generated another 1,158 jobs through the indirect and induced impacts. Total labor income that is attributable to the university s presence was $117.5 million. At the state level, the total output impact was $407.8 million. These activities directly supported 3,031 jobs and a total of 3,301 jobs through indirect and induced effects. Total labor income generated by these expenditures was $128.9 million. Table 55. Summary Impact on 12 Immediate Parishes Impact Type Employment Labor Income Value-Added Output Direct Effect 2,762 $68,576,484 $139,360,431 $224,980,748 Indirect Effect 339 $16,274,987 $27,693,112 $49,355,350 Induced Effect 819 $32,654,674 $59,239,837 $97,271,838 Total Effect 3,920 $117,506,145 $226,293,380 $371,607,936 Table 56. Summary Impact on the State Impact Type Employment Labor Income Value-Added Output 53 Page

55 Direct Effect 3,031 $75,251,069 $152,924,455 $246,878,242 Indirect Effect 372 $17,859,040 $30,388,497 $54,159,132 Induced Effect 898 $35,832,971 $65,005,681 $106,739,357 Total Effect 4,301 $128,943,079 $248,318,633 $407,776,731 Table 57. Top 10 Industries in the 12 Immediate Parishes Impacted Description Employment Labor Income Value-Added Output Private junior colleges, colleges, universities, and professional schools 869 $17,516,181 $17,951,915 $34,908,883 Real estate establishments 778 $9,299,858 $68,146,384 $81,509,853 Food services and drinking places 357 $7,336,615 $11,299,058 $21,323,840 Construction of other new nonresidential structures 331 $18,129,223 $20,661,008 $52,611,963 Retail Stores - Food and beverage 240 $6,690,374 $9,653,854 $12,410,194 Retail Stores - Miscellaneous 159 $3,719,827 $5,695,177 $8,225,861 Hotels and motels, including casino hotels 102 $3,468,675 $6,848,399 $12,359,234 Architectural, engineering, and related services 75 $6,059,971 $6,161,348 $10,534,001 Retail Stores - General merchandise 55 $1,501,917 $2,340,810 $2,881,397 Offices of physicians, dentists, and other health practitioners 49 $4,147,292 $4,281,672 $7,033,329 Table 58. Top 10 Industries in the State Impacted Description Employment Labor Income Value-Added Output Private junior colleges, colleges, universities, and professional schools 954 $19,221,040 $19,699,184 $38,306,583 Real estate establishments 853 $10,205,018 $74,779,107 $89,443,249 Food services and drinking places 392 $8,050,692 $12,398,801 $23,399,300 Construction of other new nonresidential structures 363 $19,893,750 $22,671,954 $57,732,713 Retail Stores - Food and beverage 263 $7,341,552 $10,593,469 $13,618,085 Retail Stores - Miscellaneous 174 $4,081,879 $6,249,492 $9,026,488 Hotels and motels, including casino hotels 112 $3,806,283 $7,514,957 $13,562,165 Architectural, engineering, and related services 82 $6,649,791 $6,761,035 $11,559,281 Retail Stores - General merchandise 60 $1,648,099 $2,568,642 $3,161,845 Offices of physicians, dentists, and other health practitioners 53 $4,550,950 $4,698,409 $7,717,886 Total Fiscal Impact 54 Page

56 At the regional level, the total state and local tax impact from the combined activities listed above was $22.7 million another $2.2 million in tax revenue is added statewide. Sales tax revenue represents the largest component in this impact category. Federal tax revenue at the regional level was estimated to be $26.1million another $2.5 million is added at the state level. Table 59. State and Local Tax Impact in the 12 Immediate Parishes Description Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Dividends $41,875 Social Ins Tax- Employee Contribution $79,332 Social Ins Tax- Employer Contribution $183,805 Imports: Sales Tax $11,597,950 Imports: Property Tax $3,932,734 Imports: Motor Vehicle Lic $49,351 Imports: Severance Tax $789,365 Imports: Other Taxes $741,573 Imports: S/L NonTaxes $2,317,849 Corporate Profits Tax $979,857 Personal Tax: Income Tax $1,376,991 Personal Tax: NonTaxes (Fines- Fees $439,241 Personal Tax: Motor Vehicle License $38,085 Personal Tax: Property Taxes $34,624 Personal Tax: Other Tax (Fish/Hunt) $84,234 Total State and Local Tax $263,137 $19,428,822 $1,973,175 $1,021,732 Table 60 State and local tax impact in the state Description Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Dividends $45,951 Social Ins Tax- Employee Contribution $87,053 Social Ins Tax- Employer Contribution $201,695 $12,726, Page

57 Imports: Sales Tax Imports: Property Tax $4,315,509 Imports: Motor Vehicle Lic $54,154 Imports: Severance Tax $866,194 Imports: Other Taxes $813,751 Imports: S/L NonTaxes $2,543,446 Corporate Profits Tax $1,075,227 Personal Tax: Income Tax $1,511,014 Personal Tax: NonTaxes (Fines- Fees $481,993 Personal Tax: Motor Vehicle License $41,792 Personal Tax: Property Taxes $37,994 Personal Tax: Other Tax (Fish/Hunt) $92,433 Total State and Local Tax $288,748 $21,319,839 $2,165,225 $1,121,178 Table 61. Federal Tax Impact in the 12 Immediate Parishes Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Description Social Ins Tax- Employee Contribution $5,213,498 $741,423 Social Ins Tax- Employer Contribution $5,139,450 Imports: Excise Taxes $1,202,598 Imports: Custom Duty $471,801 Imports: Fed NonTaxes $803,381 Corporate Profits Tax $6,083,477 Personal Tax: Income Tax $6,431,486 Total Federal Tax $10,352,948 $741,423 $2,477,780 $6,431,486 $6,083,477 Table 62. Federal Tax Impact in the State Description Employee Compensation Proprietor Income Tax on Production and Imports Households Corporations Social Ins Tax- Employee Contribution $5,720,930 $813,586 Social Ins Tax- Employer Contribution $5,639,675 $1,319, Page

58 Imports: Excise Taxes Imports: Custom Duty $517,722 Imports: Fed NonTaxes $881,574 Corporate Profits Tax $6,675,585 Personal Tax: Income Tax $7,057,466 Total Federal Tax $11,360,606 $813,586 $2,718,944 $7,057,466 $6,675,585 V. McNEESE EDUCATION PREMIUM While the economic and fiscal impact of McNeese State University on the regional economy s output is $371.6 million in the year 2014, the major contribution of the university to the economy is the increase in human capital and the educational earning premium, which we estimate in this part of the study. This is measured by estimating the incremental human capital generated by the education acquired at McNeese State University. We estimate the incremental human capital - education premium - by using the differential synthetic work-life earnings by educational attainments for the university graduates in one year. With 1,591 degrees granted (121 associates, 1,150 bachelors, 280 masters, 5 graduate certificates, 31 post-bachelor s certificate, and 4 post-master s certificate) by McNeese State University in 2014, the study considers the estimated incremental synthetic work-life earning powers as the education premium created by the university in Typically, synthetic work-life earning powers are computed by summing a person s yearly earnings over that person s work-life. The resulting estimate represents what that person would expect to earn over a hypothetical 40-year working life. The work-life earning powers estimates in this section depend upon the following assumptions. Estimates assume cross-sectional earnings are representative of the patterns in future earnings. Median earnings do not take into account factors which may affect earnings (past performance, work history). Estimates do not account for any future productivity gains in the economy. In estimating the synthetic work life earning powers we considered level of education, college major, and average age of undergraduate and graduate students. We also used 2014 median income data by education and training from the Bureau of Labor Statistics (BLS). First, we computed the median income for McNeese State University graduates based on degrees and majors then subtracted the synthetic work life earning powers for the typical worker with high school education. 57 Page

59 Table 63 summarizes the synthetic work life earning powers and the educational premium. The total education premium from the graduating class of 2014 is approximately $1.4 billion. The average graduate with a bachelor degree would earn nearly $1 million more than a high school graduate over his/her work life and the average graduate with a master degree would earn approximately $1.3 million more than what a high school graduate would earn. Table 63. Synthetic Work Life Earnings and Education Premium Degree Type Associate Number Awarded Median Income (Per Degree Type) Synthetic Work Life Earnings (per Degree Type) Education Premium (per Degree Type) Total Education Premium Engineering 22 $47,560 $2,140,200 $616,860 $13,570,920 General & Basic Studies 40 $34,070 $1,533,150 $9,810 $392,400 Liberal Arts 21 $43,130 $1,940,850 $417,510 $8,767,710 Bachelor's Nursing 38 $41,540 $1,869,300 $345,960 $13,146,480 Business 146 $61,580 $2,524,792 $1,136,860 $165,981,622 Education 185 $48,790 $2,000,390 $612,458 $113,304,730 Engineering 86 $82,999 $3,402,961 $2,015,029 $173,292,505 General & Basic Studies 158 $36,750 $1,506,750 $118,818 $18,773,244 Master's Liberal Arts 258 $47,087 $1,930,553 $542,621 $139,996,141 Nursing 165 $65,470 $2,684,270 $1,296,338 $213,895,770 Science 152 $61,020 $2,501,822 $1,113,890 $169,311,298 Business 35 $81,080 $2,675,640 $1,558,524 $54,548,340 Education 146 $58,263 $1,922,683 $805,567 $117,612,739 Engineering 19 $93,720 $3,092,760 $1,975,644 $37,537,236 Liberal Arts 22 $54,476 $1,797,697 $680,581 $14,972,789 Nursing 39 $89,960 $2,968,680 $1,851,564 $72,210,996 Science 19 $61,202 $2,019,677 $902,561 $17,148,650 Graduate Certificate Business 1 $83,580 $2,758,140 $1,641,024 $1,641,024 Education 4 $64,372 $2,124,280 $1,007,164 $4,028,655 Post Bach Certificate Education 31 $59,350 $1,958,550 $841,434 $26,084,454 Post Master's Certificate Nursing 4 $108,160 $3,569,280 $2,452,164 $9,808,656 Total Education Premium $1,386,026,358 Figures above are based on median income data by education and training from the Bureau of Labor Statistics, Page

60 In addition to the earning premium a college education offers, there are additional benefits. For decades, BLS data have shown that workers with more education have lower unemployment and higher earnings than workers with less education. For example, as the figure 16 below show, the unemployment rate drops with every additional level of education attained. Workers with less education than a high school diploma had the highest unemployment rate (11 percent), while those with a doctoral degree had the lowest rate (2.2 percent). Earnings by educational attainment generally follow the opposite pattern, peaking for workers with a professional degree a group that includes lawyers and dentists and decreasing as education levels fall. The earnings data in the chart are medians; within each education level, half of workers earned more than the amount shown, and half earned less. 59 Page

61 Figure 16. Unemployment Rates, Source: U.S. Bureau of Labor Statistics, Current Population Survey According to data released in January 2014 from the U.S. Bureau of Labor Statistics (BLS), the higher your level of education, the lower your rate of unemployment. In the last decade, as the chart shows, people with higher levels of education consistently had lower unemployment rates than people with lower levels of education. For example, in February 2010 unemployment rates peaked at 15.8 percent for people who had less than a high school diploma. At that time, the unemployment rate for people who had a bachelor s degree or higher also reached a high point, but at 5.0 percent about one-third the rate for people who had less than a high school diploma. Even in times of low unemployment, rates have differed markedly by education. For people with less than a high school diploma, the lowest unemployment rate in the last 10 years was 5.8 percent in October That was more than triple the lowest rate, 1.8 percent, for people with a bachelor s degree or higher. The unemployment rate is the percentage of the labor force that is jobless, has actively looked for a job in the prior 4 weeks, and is currently available for work. (It does not take into account people who would like a job but are not looking for one.) Seasonally adjusted, unemployment rates of people in the labor force ages 25 years and over. 60 Page