The University of Minnesota generates $13.20 for every dollar of state funding it receives, according to a study released Monday that will be another tool for school officials in their continuing battle with the Legislature for increased support.
The UniversityâÄôs economic impact on the state totals $8.6 billion annually, according to a study by consulting firm Tripp Umbach, which the University contracted for the research. The money comes from a variety of sources, including the schoolâÄôs research, inventions, hospitals, taxes and other day-to-day operational spending.
Thousands of visitors to the campus generate about $2 billion by spending money at local businesses, staying at hotels and renting cars, said Paul Umbach, whose consulting firm conducted the study.
The report will help the University better communicate to the Legislature and the state the value and return on investment the school provides, said University President Bob Bruininks.
âÄúThis is only one way to measure the impact and value of the University, but itâÄôs a way of communicating that people understand,âÄù he said. âÄúItâÄôs easier to understand than giving you 20 statistics about the University.âÄù
Bruininks was quick to point out that the study is âÄúincompleteâÄù because it doesnâÄôt factor in the UniversityâÄôs educational operations and the benefit of an educated workforce.
More than 10,000 Minnesota companies have been started by University alumni, according to the report, generating an additional $100 billion in revenues that arenâÄôt factored into the UniversityâÄôs total value.
Umbach praised the UniversityâÄôs infrastructure and balanced research portfolio, saying that the school is well-positioned for future growth. But he warned that further investments are needed to continue attracting top faculty and students, and declines in state funding could hurt the UniversityâÄôs return on that investment.
âÄúIf the University continued to have major decreases of funding âÄ¦ at some point things would tip over, and the University would lose a lot of its impact,âÄù he said. âÄúBy the time that happens, itâÄôs too late.âÄù
The study was conducted at a cost of $48,000 by Tripp Umbach, which is based in Pennsylvania. Vice President for Research Tim Mulcahy, who oversaw the study, said the University chose an outside consultant to get an objective, credible view of the UniversityâÄôs impact.
Mulcahy said the University will take the model used in the study and continue to use it in future years with updated numbers.
Tripp Umbach has conducted similar studies at about 150 colleges nationwide, including the University of Michigan, Penn State University and Ohio State University. Umbach said the University of MinnesotaâÄôs impact was among the top two highest heâÄôd ever seen, along with the University of Washington-Seattle.
A more detailed second part of the study that maps the UniversityâÄôs impact on a regional level will be released at next weekâÄôs Board of Regents meeting.