Without the University of Montana there would be about 10,000 fewer jobs in the Treasure State and $1 billion fewer dollars circulating through the state's economy, according to a recently released economic impact study.

UM commissioned the study to measure its effect on the local and state economy. It was conducted by the Bureau of Business and Economic Research, a research department within UM's School of Business Administration.

"It says the University of Montana makes a big contribution to the state economy, with emphasis on the word ‘state,' " said Patrick Barkey, director of the BBER and the study's lead author.

The university has commissioned about 10 economic impact studies in UM President George Dennison's tenure - about one every other year, he said. However, this study is unique because it measures UM's impact on the state, not just the Missoula economy, and attempts to look beyond the dollars and cents toward the product that UM delivers - educated people. It tries to quantify UM's value to the state.

"I think it's important to demonstrate that higher education is an economic engine locally and in the state," said Jim Foley, UM's executive vice president. "I think it's important to remind people of that."

Wielding a study like this next year when the Legislature reconvenes may come in handy as state revenue projections continue to decline, presumably setting up a scenario where various entities fight for state funding.

"It's no secret that the Legislature is probably the audience for this study," said Barkey, noting in a slideshow presentation delivered to campus faculty and administrators that the rate of return to the Legislature is four to one.

"You invest money to get a return," said Dennison during an interview Tuesday. "That's a good return."

The study asks the question: If UM did not exist, what would Missoula and the state as a whole look like?

The study focuses primarily on five areas: University operations, research money, graduate wages, visitors and student off-campus spending.

The study, which took

3 1/2 months to complete, follows where state tax dollars, student tuition and research dollars are spent. Barkey sorted through a year's worth of purchase orders.

A majority of the money goes toward salaries and benefits of UM employees, which Barkey asserts puts Montanans to work and contributes more to the state economy than if that money were given back to the students and taxpayers and spent as they typically would.

The study also found that Montanans with graduate degrees are earning increasingly more over time than those who obtain only a high school diploma. That means UM is becoming more valuable to the state, Barkey said.

At the same time, Barkey was also surprised the wage gap between those who earned a high school diploma versus those Montanans with a graduate degree is not as large as some other states.

"That says more about our economy than anything," he said.

In the end, the report shows 9,700 fewer jobs in Montana if UM did not exist, and $200 million less in state tax revenue. The study concludes UM adds an additional

$1 billion in after-tax income to the state economy and $352 million in annual investment spending.

There was only one industry - mining - on which UM had little effect.

The results hardly came as a surprise to Dennison, who "expected the impact to be large," he said.

Both Dennison and Barkey said the study is both objective and accurate, as the modeling used to determine the data is commonly used nationwide by universities and colleges in determining economic impact.

Dennison is pleased to have access to this kind of detailed knowledge, he said.

Montana State University is now looking to commission a similar economic impact study focusing on its impact on Bozeman and the entire state.

Reporter Chelsi Moy can be reached at 523-5260 or at chelsi.moy@missoulian.com.


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