What Higher Ed Contributes to Greater Philadelphia February 5, 2010Posted by megan in Chamber in the News.
Below is the text of an Op-Ed, by Chamber president Rob Wonderling, Villanova president Rev. Peter Donohue, and Citizens Bank president & CEO Dan Fitzpatrick, that appeared in last week’s Philadelphia Business Journal.
Local municipalities and state governments looking for new revenue sources recently have focused on institutions of higher education and their students as untapped wellsprings of funds. Pittsburgh’s mayor briefly considered a tuition tax. In Harrisburg, legislative proposals would allow municipalities to impose an essential services fee on colleges and universities.
As representatives of this region’s business community and as leaders of local colleges and universities, we believe such efforts are seriously misguided. They fail to acknowledge the significant contributions to the region’s economy generated by this sector. And they fail to address the potential risk to our future prosperity.
Greater Philadelphia’s higher education sector is a major employer and purchaser of goods and services. It produces tomorrow’s innovative companies and supplies tomorrow’s talented workforce.
Our 92 institutions of higher education directly provide more than 85,000 jobs, with employees paid a total of $5.2 billion in wages and salaries, according to a 2007 report by Select Greater Philadelphia. Total student spending, excluding tuition payments, is about $2.2 billion, equivalent to just over $8,000 per FTE student per academic year. And these institutions purchase $7.1 billion in goods and services.
Including spending by their employees and students, this sector already generates substantial state and local tax revenues in the form of personal income tax and earned income tax, as well as sales tax, and corporate income tax.
The reality is that higher education is essential to the economic health of Greater Philadelphia, accounting for as much as 6 .9% of its total economic activity.
In addition, these institutions contribute in other ways — from spending by visitors and construction of capital projects to research projects that create commercial ventures.
Well-trained graduates, in turn, attract employers that need an educated work force.
Finally, colleges and universities contribute to our quality of life. They present lectures, plays and sports competitions open to the public. Some provide police protection that extends beyond campus borders. Think of all the students and faculty members who volunteer their time and talent to community organizations.
There is no denying that higher education is expensive. Adding a tuition tax or an essential services fee may be the final straw that forces a student to go elsewhere or quit educational pursuits altogether. As a region – indeed, as a nation — we cannot afford that to happen.
We recognize that municipalities need to solve serious economic issues. However, we should look to our higher education community to produce more employees, more businesses, and more development that will ultimately increase tax revenue.
Making access to higher education more expensive is not the solution. It will drive away students and erode the many benefits that colleges and universities provide. We urge lawmakers not to offload today’s budget problems on our most precious asset – the skilled workforce of tomorrow.
President & CEO, Greater Philadelphia Chamber of Commerce (GPCC),
and Chairman, CEO Council for Growth
Rev. Peter M. Donohue, O.S.A., Villanova University, Chair.
GPCC Regional Colleges and Universities Presidents’ Council
Daniel K. Fitzpatrick, President & CEO, Citizens Bank – Eastern PA / NJ / DE, 2010-11 Chair.
CEO Council for Growth, Human Capital Working Group