The University of Hawaii system produced an estimated $3.61 billion in economic benefits for the state last year, including the ripple effects from university-generated spending, according to a report released today by a group of UH economists.
The university system and its 10 campuses generate economic activity through purchases from local businesses, payment to employees and spending by students and visitors to UH conferences, the University of Hawaii Economic Research Organization reported.
Total UH-related spending totaled $2.32 billion in fiscal year 2012, $1.84 billion of which was spent locally, according to the report. Together with indirect benefits related to that spending, the school had a total impact of $3.61 billion on Hawaii’s economy, the researchers concluded.
A direct benefit to the economy would be the university buying supplies from a vendor. The additional sale by a wholesaler to the vendor represents an indirect benefit. A third benefit, called "induced" benefit, would be the amount paid by the vendor and wholesaler to employees.
An important difference between UH and a private business is that the university relies on taxpayers for part of its funding.
In fiscal year 2012 the University of Hawaii and its research arm spent $1.7 billion in support of the school’s education mission. Of that, $376 million came from the state general fund. The remaining $1.4 billion was paid for by government research and training grants, student tuition and fees, bookstore revenue and federal matching grants.
Additional spending by the privately funded University of Hawaii Foundation, other student spending and spending by visitors attending UH conferences brought total UH-related expenditures to $2.32 billion.
"These numbers can be used to illustrate the leverage effects of state general fund higher education spending," according to the report. In fiscal year 2012 the University of Hawaii "parlayed" $376 million in general fund spending into $1.84 billion of related research and educational expenditures, the report said.
Student spending accounted for more than one-quarter of total spending.
