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The Regional Economic Impacts
Idaho State University, 1996
Dr. Richard Bowen, President of Idaho State University, requested the Center for
Business Research to conduct a study of the impact of the University on Idaho,
with particular emphasis on its regional impacts upon the Pocatello area. This
publication reports the findings and results of that effort, which was begun in
the fall of 1997.
This report is a follow-up to, and a complete revision of, a previous study
conducted in 1988 (”A Report to the President of Idaho State University: The
Impact of University-related Expenditures on Idaho’s Economy, 1986-87). For
several reasons, the direct comparison of the findings of the two reports is not
Specifically, the present report utilizes multipliers refined and updated by the
Regional Science Research Institute, while the previous report relied upon
Input-Output estimates generated by the US Bureau of Economic Analysis, Regional
Input-output Measurement System (RIMS). Secondly, the focus and emphasis of the
present report is on the Pocatello area economy, while the 1988 study emphasized
state level impacts. Third, the present report attempts to discount those
impacts generated by permanent area residents, attempts to estimate a “return on
investment” for the State of Idaho, and makes other refinements or improvements
to the 1988 approach.
Paul R. Zelus, Ph.D., directed the study, and was ably assisted first by Nancy
L. Kelly and then Walter Bulawa, Ph.D., Research Associates of the Center for
Business Research at Idaho State University. Acknowledgement is also extended to
the many campus officials who provided the often tedious and detailed
information needed to conduct the study. The many faculty, staff, and students
who responded to expenditure surveys are acknowledged for the critical
information they provided.
This project was aided immeasurably by the shared experiences of researchers
from Boise State University, Northern Arizona University and the University of
Virginia. In that order, I acknowledge the helpful comments and advice of Dr.
Charles Skoro, Dr. Jerry Conover and Dr. John Knapp.
Paul R. Zelus, Ph.D.
Table of Contents
Faculty and Staff Spending
This study provides estimates of the economic impact of Idaho State University
on the regional economy of the Pocatello area. During the 1996 academic year
Idaho State University employed 657 full and part time faculty and 1,156 full
and part time staff employees, with wages and benefits totaling $47 million. It
served 12,245 students enrolled in a variety of courses and programs of study.
The University operated on an annual budget of $149 million, of which $72
million was provided by the State of Idaho in the form of appropriations. Nearly
$45 million of its revenue represents federal scholarship and student
assistance, while another $22 million is received through student tuition and
fees. The remainder of revenue comes from private and miscellaneous sources.
Direct local expenditures on the part of the university and its faculty/staff,
students and out-of-area visitors exceeded $215 million.
Institutional expenditures within the Pocatello economy exceeded $23 million
for purchases of professional services ($5.4 million), communication and
utility services ($1.9 million), materials, supplies and equipment ($5.3
million), land and buildings ($6.6 million), and miscellaneous purchases
($4.2 million), representing 59% of all institutional purchases.
Faculty and staff households paid $11 million in taxes and purchased an
estimated $21 million in goods and services based on wages totaling $36
The households of students residing in dormitories, in private residences
within the Pocatello area, and in private residences outside of the
Pocatello area made local purchases totaling $156 million
Out of area visitors spent an estimated $7 million on local purchases of
goods and services.
The indirect and inducted effects of $215 million in local spending stimulates
an additional $76 million in regional economic activity, for a total estimated
economic impact of $291 million.
Permanent residents account for approximately $101 million o f that total, with
the remaining $191 million in area expenditures attributed to the university’s
Considering the State of Idaho’s annual budgeted investment of $72 million and
its currently valued investment of $149 million in lands, buildings, and
equipment, the aforementioned regional expenditures of $191 million represent a
return on investment of approximately 87%.
Based on lifetime earnings differentials, ISU graduates maintaining a permanent
residence within Idaho are estimated to add to their lifetime earnings by an
aggregated $498 million over 40 years ($307 million if presently valued).
Idaho State University annually purchases more than $23 million in goods and
services from Pocatello area businesses.
Idaho firms receive 66% of the University’s institutional purchases with 59%
going to Pocatello area firms.
Records of University expenditures were obtained from the University
Comptroller. Idaho State University (ISU) issued more than 35,000 checks during
the 1995-96 academic year, excluding payroll checks to faculty and staff. Each
check was classified by vendor zip code and type of service or product
purchased. The dozens of expenditure types were then summarized into the five
categories reported in Table 1. Zip code classifications were used to identify
those expenditures that were made within the state of Idaho and those that were
made within Bannock County.
Table 1: Idaho State University, 1995-96 ExpendituresWithin Bannock
Communications & Utilities$1,990,65645%$3,615,04382%$4,393,939
Insurance, Land & Buildings$6,652,55179%$6,652,55179%$8,429,554
Materials, Supplies & Equipment$5,363,40546%$5,406,87346%$11,697,428
Since many larger vendors maintain local offices for billing purposes only,
there may be considerable leakage outside of the Bannock County and Idaho areas.
The fact that a given vendor’s mailing address is within Pocatello or even
within Idaho does not guarantee that a local economic impact has occurred.
Every effort has been made to include only the purchases of real goods and
services. Excluded are all payments to students, fringe benefits purchased for
employees, federal loans and monies which “pass through” the university from
outside sources, payments to escrow accounts, and various adjustments made
during the auditing process.
Institutional Expenditure Patterns
As shown in Table 1, Idaho State University contributes more than $23 million
annually to the local Pocatello economy through its purchases of goods and
services from area businesses. This represents 59% of all such purchases made by
the University. An additional $3 million was spent within Idaho but outside of
Bannock County. The remaining $14 million in purchases was made outside of the
The University purchased more than $8.6 million in professional services during
1995-96. Three-fourths of this amount was used to purchase legal, accounting,
advertising, and architectural services from Idaho firms, with Pocatello-based
companies receiving $5.4 million or 64% of the category total.
Almost all (82%) of the University’s $4.3 million annual expenditure for
communications and utilities reflects purchases made within the state of Idaho.
Pocatello-based firms account for $1.9 million (45%) of this amount. The total
includes telephone, gas and electric utility purchases. Whether these purchases
accrue to Pocatello or to some other regional Idaho economy is difficult to
assess, given the previously stated caution regarding regional offices and
During 1995-96, the University made significant purchases of land and buildings
($6.6 million), all of which are located within the Pocatello economic area.
Nearly all of the remaining $1.8 million from this category involves the
purchase of insurance policies and services from companies located outside of
the state of Idaho.
Supplies and equipment combine to make up the single largest category of
University expenditures. More than $11.6 million is expended annually on a
variety of office supplies, scientific laboratory supplies and equipment, and a
myriad of education-related supplies. These materials and supplies comprise
about $5.2 million of the category total, with the remaining $6.4 million
devoted to data processing, computing, and transportation purchases. Nearly half
(46%) of the combined total of $11.6 million is expended within the Pocatello
area, with almost the entire remaining amount going to out-of-state firms.
The University operates several auxiliary enterprises, which have their own
budgets and produce their own revenue. Examples include food services, student
housing, the University bookstore and the University’s motor pool operations.
Combined, these auxiliary services receive about $20 million in customer revenue
from students, faculty and staff, from university departments, and from
customers outside of the University. To the extent that these auxiliary
enterprises make purchases of goods for resale, those purchases are considered a
part of the University’s expenditure contribution to Idaho’s economy. Nearly
$2.4 million in Idaho purchases are made annually by the University’s various
auxiliary services, with $1.3 million being expended in the Pocatello area
economy. The above expenditures for the purchases of resale goods by the
University’s auxiliary enterprises are a part of the $7.1 million reported as
Miscellaneous Purchases in Table 1.
Miscellaneous expenditures, other than purchases for resale, involve about $4.7
million for maintenance and repair of the University’s buildings and equipment.
About $2.3 million of such expenditures are made within the Pocatello economy
for such things as cleaning, janitorial, and repair contracts.
Faculty & Staff Spending
Faculty and staff households receive $36 million in wages and $10 million in
Disposable income after taxes results in $25 million in purchases of food,
shelter, clothing and other consumer items.
The more than $11 million in taxes paid by ISU faculty and staff help
purchase an array of governmental services that benefit the entire
Faculty and staff salary and benefit totals for the 1995-96 academic year were
obtained from the University Comptroller. Household expenditures were estimated
using data from previous studies of the spending patterns of Southeast Idaho
families and sub-populations, including the workforce at the Idaho National
Engineering and Environmental Laboratory1. The household expenditures of ISU
faculty and staff were calculated by applying the proportions derived from these
studies to the ISU faculty and staff salary totals. While different income
levels and varying lifestyles make it inappropriate to assume that the
calculated spending pattern applies to each and every ISU employee, its
application to derive an expenditure pattern illustrative of the entire faculty
and staff population is reasonable.
A total of 657 faculty and 1,156 staff received wages of $36.3 million during
the 1995-96 academic year. Full time employees include 510 faculty and 882
staff. Included in the part time totals are 147 faculty and 274 classified and
exempt employees. In addition to salaries, the university provided $10.1 million
in employee benefits, including its calculated portion of Social Security
(FICA), pension contributions and medical benefits.
Table 2 depicts the salary totals and the estimated aggregate expenditures made
by ISU faculty and staff. The spending for each expense type reflects the
proportions that a typical Southeast Idaho family has been determined to spend,
and is illustrated in Figure 2.
Table 2: Faculty and Staff Salary ExpendituresRecipientSalary
Taxes: Federal, State & Local$11,204,328
Donations & Gifts$871,746
Expenditures for food, clothing and transportation total $11.3 million annually,
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