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									  The Economic Impact of
    Walla Walla College
on the Blue Mountain Region




            Kevin B. Stokes
           ECON/500
          Louisville, KY
           502-213-7327
        ECON500@Juno.com
         November 27, 2002
                                                                                                             2



                               I M P A C T!             I M P A C T!
   The purpose of this Report on the Impact of Walla Walla College is to determine just how
important the College is and has been to the Blue Mountain Area. It is useful to note that the
College is not only one of the region's larger employers, but that its buying power is significant.
In many cases, it is larger than would be expected from a manufacturer of the same size.
   What this report does is to examine carefully all the evidence that can be assembled from
detailed research. The Walla Walla College impact numbers are:

$103 million in additional spending in Greater Walla Walla including:
 $19 Million in direct spending
 $8 Million in secondary business spending
 $24 Million in creation of new jobs
 $28 Million in alumni earnings
 $24 Million in social benefits
 $0.2 Million in direct benefits to local governments
All this plus, 4,402 alumni, 1,456 students, 1363 local jobs, and thousands of men and women
touched by and enriched by the presence of this College in the Walla Walla area.


                                                  Exhibit 1
                                             Total WWC Impact
                                               Millions of dollars

                                                   Local              Direct
                                                governments          spending
                          Social benefits          $0.2
                              $24.4                                    $18.5      Secondary
                                                                                   business
                                                                                   spending
                                                                                     $8.4



                             Alumni
                             earnings                                       New jobs
                              $28.1                                          $23.7



    We got these numbers by very conservative counting, by tracing the dollars spent, the people
employed, the assets added, the taxes affected, the sales generated all over the Walla Walla
region. This area includes Benton, Columbia, Franklin, and Walla Walla Counties in Washington
and Umatilla County in Oregon.
    Walla Walla College is an export industry in Greater Walla Walla. That is because 69% of
the students at WWC come from outside the area and bring new money. In this report we have
counted the impact of these out-of-area students as well as alumni that reside in the region.
    Now to put these Impact Numbers in context. Some $1 of every $200 spent in the Walla
Walla area is generated by the activities of WWC. Few other economic activities have so much
impact. One in every hundred jobs in the Walla Walla Area Labor Market is the result of WWC



Walla Walla College Economic Impact Report                                                    Kevin B. Stoke s
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activities in the marketplace, direct and indirect. One of every fifty people in the Walla Walla
area has had a direct relation to WWC.
   In a word, Walla Walla College is important to the Walla Walla area. Far more important
than is generally realized, WWC is a major factor in the prosperity of this region of more than
325,000 residents.


                  WHERE DID THESE NUMBERS COME FROM?
   First, the $103 million annually added to the income flow in the Walla Walla area, where do
these dollars come from?

        $27 million, out of the pockets of students, faculty, staff and employees, as well as others
        associated with the College and its activities. This is money spent for food, clothing,
        books, travel, entertainment, housing, furniture, car repairs, bank services and what have
        you.

        $24 million earned by the 943 people whose jobs were created by WWC activity. This is
        income that would not exist but for the College community. It is the "multiplier effect"
        effect of WWC spending.

        $28 million earned and spent by the 2,957 WWC alumni who work in the region. This is
        income generated by the improved economic standing of these men and women. This is
        what their education is worth to them day by day in terms of a larger income than they
        would have earned had they gone directly to work and not attended Walla Walla College.

        $24 million in social benefits. This is the benefit of reduced alcoholism, incarceration,
        unemployment and welfare expenses because of the presence of WWC alumni in the
        community.

        $0.2 million in benefits to the City of College Place and the College Place Public
        Schools. This is the positive impact of Walla Walla College to the treasuries of local
        governments.

   Direct and indirect, these are the dollars in income flow that this College generates. It is the
most comprehensive "impact" of the higher education advantages offered here at Walla Walla
College.
   Put the matter differently. Without Walla Walla College, without the men and women,
professors, the librarians, the students, the clerks, the alumni, all those affected by what WWC
does, the income flow in the Walla Walla area would be $103 million less each year.




Walla Walla College Economic Impact Report                                            Kevin B. Stoke s
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                           COLLEGE COMMUNITY IMPACT
    This section describes the total impact that Walla Walla College has on the Walla Walla area
business community. It is felt in several ways. First, there is the direct spending by the College
itself, faculty, staff, students, and visitors. All of these persons who are directly related to the
College spend about $18.5 million. This money is spent and respent several times in the
community. Some of it is paid to other local merchants or is income for local residents. The
amount of this turnover is approximately $8.4 million.

                                         Exhibit 2
                                    WWC Community Impact
                           Direct Impact of Walla Walla College on the Walla Walla Area
                         Direct University Spending                       $6,465,999
                         Faculty & Staff Spending                         $5,976,359
                         Student Spending                                 $5,260,684
                         Visitors                                          $812,500
                         TOTAL                                           $18,515,542




                                            Exhibit 3
                                       WWC Community Impact
                                                 Millions of dollars
                                                                                   Direct
                            Student               Visitors                        University
                           Spending                $0.8                           Spending
                             $5.3                                                   $6.5




                                                      Faculty & Staff
                                                         Spending
                                                           $6.0


DIRECT SPENDING

    The College community in the Walla Walla area spent $18,515,542. Walla Walla College
itself spent 34.9%, or $6.5 million, with area businesses. The faculty and staff contributed 32.3%
of this flow, or $6.0 million. WWC students, who come from outside the region, purchased $5.2
million, or 28.4%, on housing, food, cars, clothing and the like. And visitors to the campus left
$812,500 or 4.4% of the total.


Walla Walla College Economic Impact Report                                                     Kevin B. Stoke s
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COLLEGE EXPENDITURES

    Walla Walla College spent $9.4 million in the 2001-2002 academic year in the Walla Walla
Region. Of this amount $6.5 million is attributable to the out-of-area students who attend WWC.
The spending went to lawyers, plumbers, roofers, lecturers, insurers and everybody else who
performed services for the school. Not included in this total are salaries to employees, loans and
grants to students, and purchases of goods and services from organizations outside of the region.

FACULTY AND STAFF

    In 2001 the faculty and staff members at WWC -- vice presidents, counselors, theologians,
engineers, nurses, carpenters, custodians -- took home $10.6 million. Of this $7.3 million was
earned from out of town students. After taxes and other deductions, $6 million of this new
money was spent in the Walla Walla Area. $1.4 million of it was spent on housing and $4.6
million on food, clothes, cars and other goods.

STUDENTS

   There were 1,388 full-time students at the College Place campus of Walla Walla College in
the fall of 2001. 953 of these students hailed from outside the Walla Walla area. These students
spent $5,260,000 in the region in 2001-2002 on private housing, food, cars, clothing and the like.
Therefore, the average full time student spends more than $5,500 a year besides tuition.

VISITORS

   Over 8,000 people came last year to the WWC campus for meetings, graduations and lectures.
Together they spent $812,500 in the area. Dads and moms come to bring cookies and comfort to
their sons and daughters and to proudly watch them go down the aisle. Academy groups make
visits on college day and at other times. Families and friends come from all over the continent for
joyous weddings and leave their money here.
                                                 Exhibit 4
                                 Spending by Visitors to the WWC Campus
                                     Expenditures by Out of Area Visitors at Local Businesses
                                                      Number         Average                      Total
                Category                              of Visitors  x Expenditure                = Expenditures
                Academy Days                                   550            $20                        $11,000
                Alumni Weekend                                 750            $90                        $67,500
                Board Meetings                                  50           $160                         $8,000
                Camp Meetings                                  750            $40                        $30,000
                Conventions                                     30            $50                         $1,500
                Employee Home Guests                           900            $50                        $45,000
                Foreign Student Startup Spending                15         $4,000                        $60,000
                Graduation                                   1,200           $120                       $144,000
                Guest Performers and Lecturers                  30            $50                         $1,500
                Parents Visits                                1000           $120                       $120,000
                Prospective Students and Families              400            $50                        $20,000
                Registration                                   500           $150                        $75,000
                Weddings                                     2,400           $100                       $240,000
                TOTAL                                        8,025                                      $812,500
Walla Walla College Economic Impact Report                                                                         Kevin B. Stoke s
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RESPENDING EFFECT

   The total direct impact of the WWC community in the Walla Walla Area was $18.5 million.
This amount went directly to regional businesses, including utilities, plumbers, restaurants,
property owners, hotels and the like. Many of these enterprises depend upon College related
business for a good share of their revenue. In turn, the delivery driver to the cafeteria buys some
of his gas locally. The motel that hosts a parent from Portland gets its light from Columbia REA.
Of course, both the food purveyor and the hotel pay their help out of money spent by the WWC
community. And where do the desk clerks buy their groceries - in the area, of course. All of this
accounts for an added $8.4 million respent in the area.

                                             JOB IMPACT
   There are a total of 420 full time faculty and staff members at the College Place campus of
Walla Walla College. These people--being directly employed by WWC-- contribute most of their
income after taxes into the area economy.
   In addition there are 943 other people who owe their jobs to the existence of Walla Walla
College. That's twice the size of local Army Corps of Engineers employment. That's machinists,
farmers, insurance agents, dentists and bank vice presidents, who have jobs because of WWC.
These 1363 people are about 1% of the regional labor force.


                                           Exhibit 5
                                         WWC Job Impact
                                      WWC Full-Time Jobs: 420




                              New Jobs in the Blue Mountain Region: 943




Walla Walla College Economic Impact Report                                           Kevin B. Stoke s
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                                       ALUMNI IMPACT

   Stop a nurse at Walla Walla Adventist Hospital, the social worker at the VA, or the
accountant at the Army Corps of Engineers - ask them where they got their degree - Walla Walla
College of course. And does that degree make a difference; you bet! A $14,700 difference for a
bachelor’s degree. That's the difference between a WWC grad and a high school grad in the area.
Spread that over the almost 3,000 WWC alumni who work in the region and you get $28.1
million in extra earnings that Walla Walla College added to the local economy.




                                SOCIAL BENEFIT IMPACT
    College pays – not just in better incomes but also in better lifestyles. Better living pays
benefits to society. College graduates tend to possess greater self-esteem; live longer, healthier
lives; assume greater civic responsibility; enjoy more aesthetic interests; attend more athletic
events; exercise better moral judgment; and nurture children more effectively than do those
without college educations
    What if Walla Walla College alumni were not here? There would be $24.4 Million in
additional social costs. There would be more substance abuse. Unemployment and welfare
expenditures would be higher. Incarceration rates and crime victim costs would be higher.
Exhibit 7 below shows the total social benefits of Walla Walla College.




Walla Walla College Economic Impact Report                                          Kevin B. Stoke s
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                                     Exhibit 7
                  Social Benefit Impact in the Walla Walla Region
              Reduced Absenteeism                                                      $1,879,880
              Reduced Alcoholism                                                       $1,124,911
              Reduced Crime Victim Cost                                                  $925,440
              Reduced Incarceration                                                    $2,834,160
              Reduced Smoking                                                          $1,686,169
              Reduced Unemployment                                                     $8,656,000
              Reduced Welfare Expenditures                                             $7,257,190
              Total WWC Social Benefit Impact                                         $24,363,750



                              IMPACT ON PUBLIC SCHOOLS
   Walla Walla College is responsible for a $178,000 net benefit to the College Place Public
Schools. Much of this benefit is due to the operation of the Clara Rogers School and Walla Walla
Valley Academy. If these schools did not exist, local public school expenses would be higher
because of a need for more instructional personnel and a larger physical plant. Rogers and
WWVA save $374,000 from the local tax support for the City schools. However the presence of
125 WWC community students in the City school system is a $306,000 cost to the taxpayers.
    Most of the Public School budget comes from Olympia. The system loses $827,000 in state
aid because of the attendance of College Place children at WWC schools. However, the City
schools gain $676,000 of state aid due to the enrollment of some WWC community children.
Additionally members of the WWC Community contributed $257,000 in local taxes to the
operation of the College Place Public Schools.
   Exhibit 8 below summarizes the benefits and costs to the Public School System due to the
presence of Walla Walla College.

                                      Exhibit 8
            Summary of the Impact of WWC Primary and Secondary Schools
                         Benefits and Costs of WWC Schools on the College Place Public Schools
Benefits                                                      Costs
Cost Saving to Public Schools for                             Cost of Education for WWC
Operation of WWC Schools                    $374,236          Community Children in Public Schools       $306,099
State Aid for WWC Community                                   Loss of State Aid for Children in WWC
Children in Public Schools                  $675,965          Schools                                    $827,381
Value of Property Saved by Operation                          Value of Property Used to Support
of WWC Schools                                $27,792         WWC Children in Public Schools              $22,706
WWC Community Tax Contribution to
Public Schools                             $256,707
Total Benefits                            $1,334,700          Total Costs                              $1,156,187

Net Benefits Due to WWC                     $178,513




Walla Walla College Economic Impact Report                                                          Kevin B. Stoke s
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                  IMPACT ON THE CITY OF COLLEGE PLACE

    Walla Walla College provides a net benefit to the City of College Place. The College
Community contributed $73,000 more to the City Treasury than it cost the City. Exhibit 9
summarizes the costs and benefits of WWC to the City.
    In considering the benefits and costs we consider only the basic governmental operations of
the City. First we consider the contribution of the WWC community to local taxes and other
revenues. Then we look at the costs of government services performed for the WWC community.
We exclude the city water operations which are funded by fees for service.

                                   Exhibit 9
            Impact of Walla Walla College on the City of College Place
                                     All Figures in Thousands of Dollars
                                             Total Revenues or Expenditures         WWC Impact
        City Revenues
        Tax
         Business Tax                                                        $335         $152
         Sales Tax                                                           $462         $183
         Real Estate Tax                                                     $746         $190
        Other Governments                                                    $858         $239
        Other Revenue                                                        $471         $150
        Total Revenues                                                     $2,871         $915

        City Expenditures
        General Government                                                   $684         $234
        Security                                                           $1,500         $430
        Streets                                                              $438         $122
        Other                                                                $228          $56
        Total Expenditures                                                 $2,850         $842

        Net Benefits                                                                       $73




WWC IMPACT ON MUNICIPAL REVENUES

    The City of College Place received revenues of $2.8 Million in 2001. About $915,000 of this
revenue came from WWC, its faculty, students, alumni, and local firms that do business with the
College.
    Taxes bring in about 54% of City revenue. There are three principle tax sources; business
tax, sales tax and real estate tax. The business tax is a tax on telephone, electric, gas and cable
services. The WWC community contributed $152,000 in business taxes and $183,000 in sales
taxes.


Walla Walla College Economic Impact Report                                                Kevin B. Stoke s
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    The WWC community made a net contribution of $190,000 in real estate taxes. Faculty, staff
and community students paid $67,000 in real estate taxes. Firms which do business with the
College contributed $50,000 in real estate taxes. College alumni are responsible for $97,000 in
additional real estate taxes. This is because their WWC education gives them above average
incomes which yield higher real estate tax revenue.
    The College itself paid $13,000 to the City of College Place in property taxes for rental
properties. There is a loss of about $37,000 in real estate taxes because of the tax-exempt status
of the 75 acres of land occupied by the College campus.

                                         Exhibit 10
                              Real Estate Tax Impact of WWC
                                       All Figures in Thousands of Dollars
                         Category                              Payments or Costs
                         Alumni                                              $97
                         Business                                            $50
                         College                                             $13
                         Faculty                                             $41
                         Students in the Community                           $26
                         Total Payments                                     $227

                         Cost of Tax Exemption                               ($37)
                         Net Benefit                                         $190



   The State of Washington provided $858,000 in intergovernmental revenue to the City. These
funds originally came from income tax revenue to Olympia. The WWC Community contributed
$239,000 to this source.
   There is also $471,000 in revenue from licenses, permits, fines, investments, and sale of
goods and services. The College Community is responsible for $150,000 of these funds.

WWC IMPACT ON MUNICIPAL EXPENDITURES

    The City of College Place had operating expenditures of $2.8 Million in 2001. This covered
police, fire, streets, governmental operations and other services. The cost of providing these
services to the WWC community was $842,000.
    Security services account for $1.5 Million or 53% of basic City spending. Providing security
for the WWC community cost $430,000 to the City. The College itself saved the City some
security expenses by providing security and fire services for the campus. This reduced the use of
security services by the students who live on campus.
        The operation of city offices, courts and other administrative operations cost $684,000.
Providing these governmental services to the WWC Community cost $234,000. Street
maintenance and operations cost $438,000. Faculty and community students use city streets at
about the same level as other members of the population. The cost of providing streets for the
WWC community was $122,000.



Walla Walla College Economic Impact Report                                           Kevin B. Stoke s
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        Other expenditures include parks, recreation, and economic development. The total for
these categories was $228,000. Services for the WWC community in these areas cost $56,000.

OTHER WWC BENEFITS TO THE CITY OF COLLEGE PLACE

       There are many other benefits that are not as easy to measure. WWC personnel donate
many hundreds of hours every year for civic and social functions in the city. The College
enriches local cultural life with performances in the Melvin West Fine Arts Center, as well as the
services of the Peterson Memorial Library.
       The city receives higher tax revenues because of the presence of so many WWC educated
people in the community. Because of their relatively higher incomes these people are able to pay
higher sales, real estate and other taxes. Additionally these college graduates have lower
involvement with the criminal justice system which cuts down on security and other
expenditures.


                                             CONCLUSION
    From the heights of the Blue Mountains, to Pendleton, Hermiston and the Tri-Cities the
influence of Walla Walla College is felt. The freshman and the grad student leave their dollars at
the local market or with their landlords. In a few years they enter the job market ready to earn
much more than their friends who went directly to work. And there is a fair chance that their job
is there because of WWC. Thus, in many different ways, Walla Walla College adds value to the
Walla Walla area - a $103 million difference.




Walla Walla College Economic Impact Report                                          Kevin B. Stoke s

								
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