Spending by Illinois State University, its employees, and its students directly contributes more than $550 million to the McLean County economy. That spending also returns more than $18 million in tax revenues to the area. Those are the findings of an economic impact study conducted by Illinois State faculty researchers.
Illinois State employs 3,560 faculty and staff members, making it the second largest employer in McLean County. The study, prepared by Illinois State’s Professor of Economics Hassan Mohammadi and Frank Beck, director of the Stevenson Center for Community and Economic Development, shows that Illinois State directly contributes more than $550 million to the McLean County economy through payroll expenditures for faculty, staff, and student employees, general operating expenses, capital expenditures, and student spending beyond tuition and fees.
That spending has the secondary effect of supporting many local businesses. The money spent by Illinois State and its faculty, staff, and students is responsible for directly or indirectly creating more than 8,900 jobs in McLean County. Spending by those local businesses and their employees pumps more than 278 million additional dollars into the area economy. In simple terms, $1.50 is returned to the McLean County economy for every $1 expended by Illinois State and its faculty, staff, and students.
The spending power of college age students is a big part of that economic equation. As of Fall 2015, Illinois State had an on-campus enrollment of 20,615 students in undergraduate and graduate programs. Mohammadi and Beck took into consideration the off-campus spending by freshmen and sophomores who live in University residence halls and all local spending by upperclassman and graduate students, which includes things like apartment rental, groceries, books, and transportation. Their study measured the spending by students who come to Illinois State from hometowns outside of McLean County.
“Bloomington-Normal and McLean County benefit greatly from the money students spend here,” said Beck. “When we broke down the numbers we found that every dollar a student spends here puts an additional 50 cents into our local economy.”
As a state institution, Illinois State University has a tax-exempt status, but its payroll expenditures, operating and capital expenditures, and student spending generate millions of dollars in tax revenues that support local governments and schools in McLean County. In fiscal year 2015, spending by and because of the university returned $16 million in property tax revenue and $2.6 million in sales tax revenue to the local economy.
“Over one-third of the $16 million in property tax revenue comes from student spending,” said Beck. “This is an important contributor to the economic health of McLean County because the money those students are spending is coming into our area from other parts of Illinois, and from other states and nations around the world.”