Report shows effect
of UH on isle economy

$1.4 billion in direct spending
generated jobs and business

The University of Hawaii system generated more than $1.4 billion in direct spending in the isles in fiscal 2003, accounting for roughly 3.1 percent of the state's nearly $46 billion economy, a UH report says.

University of Hawaii The report, "The Contribution of the University of Hawaii to Hawaii's Economy in 2003," was released yesterday and noted that for every $1 million in state funds invested in the UH system, 79 jobs are generated.

"The University of Hawaii is a major economic sector in Hawaii," said James Mak, UH economics professor and one of the principal investigators in the study. "Despite daunting fiscal challenges, our study finds that the University of Hawaii's contribution to the state's economy is as strong as ever."

Using what economists call the "multiplier effect," in which initial spending leads to further spending, the report says that the initial $1.4 billion in UH expenditures generated $1.973 billion in local business sales. The report also notes that UH's effect on the local economy includes $1.243 billion in employee earnings, $132 million in state tax revenues and 35,800 Hawaii jobs.

The $1.4 billion in expenditures comes from money from student spending, which includes tuition, room and board; state and federal government-funded UH spending; out-of-state visitor spending such as sporting events; and UH-sponsored conferences and meetings, according to the report.

The UH system spent $989 million in support of its educational mission in fiscal 2003, the report says. Of that, the state's general fund paid $454 million. A total of $535 million was paid by government research and training grants, revolving funds, special funds and federal matching grants.

Money spent by the University of Hawaii Foundation, the Research Corporation of the University of Hawaii, student spending, out-of-town visitor spending on UH athletic events, professional meetings and conferences, and university employee retiree benefits brought the total to $1.4 billion.

Acting UH President David McClain addressed the Hawaii Society of Corporate Planners at the Hawaii Prince Hotel yesterday on the importance of the university in the state's economy and the administration's plan to obtain more state funds.

"What we need is the resources," said McClain.

The report further revealed that every dollar of taxpayer money spent on the university generates an additional $2.09 of education-related expenditures in the economy.

Reports online

The report called "The Contribution of the University of Hawaii to Hawaii's Economy in 2003" is an update to a study done four years ago entitled "Study of the Economy Impact of the University of Hawaii System."

Both reports are available at www.hawaii.edu/ovppp/inter/interecon830.html .

University of Hawaii


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