Vol. LXII, No. 49
Wednesday, December 3, 2008
The impact of Princeton University on the local, county, and state economy has been affirmed in a recent study conducted by independent consulting firm Appleseed that was commissioned by the University. This is the first time the University has undertaken a comprehensive study to assess its direct and indirect financial impact in New Jersey.
The report, entitled Education and Innovation, Enterprise and Engagement: The Impact of Princeton University and released by the University on Monday, shows that in the 2007 fiscal year, off-campus spending by students totaled $33.9 million, while the 718,000 visitors during the 2006-07 academic year spent close to $37 million. Much of the visitor spending consists of payments to restaurants, hotels, and shops within the local Princeton area, the report stated.
The number of visitors has been pretty steady over the past few years, noted Interim President and CEO of the Princeton Regional Chamber of Commerce Adam Perle, adding that the students, visitors to the University and McCarter theater, and art and athletic events all contribute to enhancing the impact that the University has on the local economy.
Describing the overall economic influence of Princeton University as huge, whether its from a retail standpoint, or a larger workforce standpoint, Mr. Perle remarked that secondary and post-secondary educational institutions tend to boost the financial climate of a given region.
Regarding the larger workforce standpoint, the Universitys Director of Community and Regional Affairs Kristin Appelget said via e-mail that the study points to the stabilizing impact of the University even in turbulent economic times. We are a large, stable employer, with regular expenditures and a constant, if not growing, employee base.
In fiscal year 2007, the document states that the University employed 5,256 people, with 88 percent of them working full-time. Not including benefits, $358 million dollars were spent on employee salaries and wages. Of the total number, $184 million went to employees of the University living in Princeton area zip codes.
Ms. Appelget noted that after participating in a 2007 economic study of five higher education institutions in Mercer County, the University was encouraged to find out more about its own economic effect in the region. We felt that it was important to benchmark our current economic impact as we explore new ways to partner with our host communities, she said.
In 2007, $82 million was spent for non-construction goods and services for the University, with more than a third of those monies going to Princeton area businesses, while area contractors and construction firms received $17 million for their work.
In light of the current economic situation, the University has announced that it will scale back its ten-year, $3.9 billion, capital plan by $300 million. A number of construction projects are being delayed, but not wholly eliminated, Ms. Appelget noted.
The scaling back does not mean that the University will reduce its contributions to local municipalities. The report notes that in 2007, the University voluntarily paid full taxes on housing for faculty, staff and graduate students though the housing might qualify as tax-exempt under New Jersey state law.
Additionally, the University is in the third year of a six-year agreement with Princeton Borough regarding our annual contribution to the community, Ms. Appelget observed. The agreement provides for an annual increase in the amount of the payment based upon two factors: the percentage increase of the Borough budget, and the percentage increase of the amount of tax-exempt square footage on the campus, she said.
Based on these two factors, for 2008 the total payment will be $1,176,730, versus the 2007 total payment that was $1,092,600. We anticipate that this amount will increase again in 2009, Ms. Appelget reported.
Borough Council member David Goldfarb acknowledged that nobody would disagree that the University provides very significant benefits to the region, but added that the entire region shares those benefits, but the economic burden of hosting Princeton University falls almost entirely on Princeton, especially Princeton Borough.
The University has the means and obligation to relieve the burden that its tax-exempt status imposes on Princeton taxpayers, he remarked.
Beyond taxes, the economic impact report also lists some of the other monetary contributions the University has made to local agencies and institutions in recent years, including $500,000 each to Princeton Regional Schools and public library, $20,000 each in 2007 to the fire department and hospital, and $35,000 in 2007 to the First Aid and Rescue Squad.
The report can be found online at www.princeton.edu/pr/reports/impact/economic-impact.pdf.
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