An economic impact study commissioned by the University of Mary Washington shows that the institution and its employees, students, visitors and retirees spent $74.3 million within the Fredericksburg region in 2007, adding a total of $115.2 million to the local economy, supporting 1,014 non-university jobs and generating $24.9 million in new income to local residents.
The findings also showed that UMW and individuals associated with the institution spent $108 million within the Commonwealth of Virginia, providing an economic impact of $225.7 million.
These expenditures supported 3,378 non-university jobs and generated 68.2 million in new income for workers living in Virginia.
“While we long have known that the University of Mary Washington makes significant contributions to the local economy, we were pleasantly surprised to learn that even conservative estimates show an economic impact of $226 million,” said President Judy G. Hample. “As a public institution, we are meeting our responsibilities to serve the Fredericksburg region and the Commonwealth of Virginia.”
The study analyzed several categories of spending during 2007, including payroll, procurement of goods and services and capital outlays for new construction. The research also examines student, retiree and visitor spending in the area. In addition to calculating how much money the university directly spent, the report details the money’s multiplier effect, meaning how the businesses and individuals who received the money were then able to spend it in the economy.
The study was conducted by Stephen S. Fuller and Lisa A. Fowler of George Mason University’s Center for Regional Analysis, which conducts research and analytical studies on economic, fiscal, demographic, housing, social and policy issues related to the current and future growth of the Virginia, Maryland and D.C. areas.
“The University of Mary Washington is a major source of economic activity in the Fredericksburg region,” Fuller said. “These university expenditures benefited a broad range of local and state businesses, generated additional non-university personal earnings and supported jobs in all sectors of the economy.”
The following is a summary of the report’s findings:
Wages and Salaries
In 2007, the university employed 1,286 individuals who earned a total of $42.9 million. UMW spent $32.4 million on wages for the 73 percent of its workforce that resides in the Fredericksburg region, which includes the City of Fredericksburg and Spotsylvania, Stafford, Caroline, King George and Westmoreland counties. Another 21 percent of the workforce that resides outside of the region, but within the state, earned $10.9 million.
When this personal income was re-spent in the economy on housing, retail goods and services, transportation, utilities, entertainment and other purchases, it is estimated that the $32.4 million in university payroll grew the regional economy by $47.8 million. It also supported 480 jobs and paid a total of $9.9 million to local workers. Across the state, the annual payroll of $40.8 million contributed $81.5 million to Virginia’s economy, generating $25.5 million in personal earnings and supporting 1,413 jobs.
Purchases of goods and services required to operate the University of Mary Washington totaled $44.7 million in 2007. These exclude one-time capital outlays but include annual purchases such as supplies, materials, equipment, contractual services, transfer payments and obligations. Regional businesses accounted for $4.7 million in sales, or 10.4 percent of the university’s total procurement outlays, while firms located elsewhere in the state captured $17 million, or 38 percent, of the university’s procurement spending.
Within the region, procurement outlays contributed a total of $7.9 million to the economy from the direct outlay of $4.7 million by the university, supporting 77 jobs and generating $2 million in personal earnings for area workers. Statewide, university spending for goods and services totaled $21.7 million, contributing a total of $52.3 million to the state economy, supporting 788 jobs and generating $16.9 million in personal income for workers residing in the state.
The Center for Regional Analysis has reported that its results for student spending are conservatively derived. They excluded students who lived in the Fredericksburg region prior to matriculation at UMW since their spending was not newly attracted to the area. They excluded part-time students because the proportion of their expenses associated with being a student is not clear. Summer students also were excluded. While students in each of these categories bolster the economy, their contributions are not quantified in this study.
It is estimated that students spent a total of $6.3 million on non-housing purchases in 2007, including meals, beverages, groceries, retail and other goods, entertainment, recreation and transportation. Almost 98 percent of all full-time student spending occurred in the Fredericksburg region, contributing a total of $9.45 million to the regional economy, supporting 93 jobs and generating $2 million in personal earnings for local workers.
Students living off campus spent an estimated $13.8 million on housing, with $5.96 million, or 43.2 percent, of these expenditures occurring within the region. The economic impact of these local housing outlays totaled $6.97 million, supported 3.5 jobs and generated $128,000 in personal earnings. Statewide, the $13.8 million in off-campus housing expenditures added a total of $17.25 million to the state economy, supported 26 jobs and generated $643,150 in personal earnings.
Spending by Retirees
The University of Mary Washington reports that it had 118 retired employees living in the Fredericksburg region in 2007. These individuals spent an estimated $4 million within the area, contributing $5.9 million to the local economy, supporting 59 jobs and generating $1.22 million in new personal earnings.
Spending by Visitors
Because it is difficult to accurately estimate the number of people who visit the University to Mary Washington each year and the amount of money they contribute to the local economy, spending has been estimated for the 20,900 visitors who attended graduation, admissions events and Family Weekend in 2007. These visitors spent an estimated $621,775 on lodging, meals and retail goods, contributing $880,000 to the Fredericksburg region, supporting nine jobs and generating $180,000 in new personal earnings for local workers.
UMW Foundation Spending
The University of Mary Washington Foundation is a non-profit entity that supports UMW by generating private support, as well as managing, investing and administering private gifts to the university. The Foundation spent a total of $5.5 million in 2007. After excluding expenditures such as student scholarships and faculty endowments that were accounted for in other parts of this research, the remaining annual spending of $4.4 million includes $1.4 million in capital outlays and $3 million in operating outlays. The economic impact of the capital outlays totaled $2.4 million, supporting 16 jobs and generating new personal earnings totaling $576,800 for Fredericksburg area workers. The Foundation’s operating outlay, totaling $3 million, contributed a total of $5.25 million to the region’s economy, supported 52 jobs and generated $1.4 million in new personal earnings.
The University of Mary Washington’s six-year capital plan outlines project improvements totaling $161.7 million that have the potential to generate one-time benefits throughout the duration of the construction. Should this plan be realized over the next six years, its total impact on the Fredericksburg region would equal $268.7 million and average $44.9 million per year. This spending would support 1,782 jobs and generate new personal earnings totaling $62.7 million within the Fredericksburg region. At the state level, this proposed capital spending would contribute a total of $369.6 million to the state’s economy, support 4,090 jobs and generate $112.3 million in new personal earnings over the six years.
Capital spending during 2007 totaled $14.8 million. The economic impact of this spending within the Fredericksburg region was $25.6 million, supporting 176 jobs and generating new personal earnings totaling $6.2 million. Statewide, the university’s capital spending had a total contribution to the state’s economy of $33.8 million. This spending supported 374 jobs and generated personal earnings totaling $9.97 million.