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University spending brings nearly $210 million in income, profits for local businesses

| Judy Berthiaume '87

UW-Eau Claire brings hundreds of millions of dollars and thousands of jobs into the Chippewa Valley each year, according to UW-Eau Claire's most recent regional economic impact analysis.

Each year, UW-Eau Claire generates more than $317 million in spending in the Chippewa Valley, resulting in nearly $210 million in annual income and profits for local businesses, more than $21 million in tax revenue for local and state governments, and jobs for more than 3,300 workers, according to the economic impact analysis report.

"The University of Wisconsin-Eau Claire makes a substantial, positive contribution to the economy of the Chippewa Valley region," the "Regional Economic Impact of the University of Wisconsin-Eau Claire" report states. "It ranks as one of the largest employers in the region with about 1,300 employees, and it brings hundreds of millions of dollars into the region's economy."

The regional economic impact analysis was completed by Wayne Carroll, professor of economics and chair of the economics department at UW-Eau Claire.

The university's economic impact extends beyond its direct spending, the report states. When the university buys services or supplies from area businesses, those businesses then spend more at other local businesses. And when employees and students spend money in area stores or restaurants, it increases demand in those sectors, the report states.

"The University of Wisconsin-Eau Claire makes a substantial, positive contribution to the economy of the Chippewa Valley region.

These ripple effects, also known as multiplier effects, mean the university's spending is even significantly greater than its budget would suggest, said Carroll, who used modeling software to help him estimate the university's total impact on the area's economy.

Using the university's fiscal 2012 budget data, Carroll's analysis considered the university's purchases of goods and services, spending on university construction projects, spending by university employees, spending by university students and spending by visitors to the university.

The five spending categories combined totaled just over $317 million in 2012, of which more than $156 million was spent locally, the report found. When the multiplier effect is considered, the total impact on the region increased to nearly $210 million annually.

Employee spending is the largest of the five categories, with total spending estimated at about $121 million, of which $65 million is spent directly in the region. The multiplier effect brings the local impact up to nearly $78 million, the report states.

Student spending is the next largest category, with students spending nearly $76 million annually. About $50 million of that is spent in the Chippewa Valley, for a total estimate of student spending of about $71 million.

The economic impact study also found that UW-Eau Claire has a significant impact on regional employment, Carroll said. There are 2,257 jobs that exist because of university purchases, construction projects, and spending by employees, students and visitors. The multiplier effect brings the university's impact on employment to 3,369, with UW-Eau Claire having the greatest employment impact on real estate establishments, food services and drinking establishments, and construction, the report found.