University of South Florida Economic Impact Report by USF UCM

UNIVERSITY OF SOUTH FLORIDA

ECONOMIC IMPACT July 1, 2019 - June 30, 2020

ECONOMIC IMPACT REPORT 1

AUTHORS

Shivendu Shivendu, Associate Professor, USF Muma College of Business

Roohid Ahmed Syed, Doctoral Student, PhD in Information Systems

Rishabh Srivastava, Graduate Student, Master of Science in Business Analytics and Information Systems

Ankita Sharma, Graduate Student, Master of Science in Business Analytics and Information Systems

2 UNIVERSITY OF SOUTH FLORIDA

TABLE OF CONTENTS KEY TERMS

4-5

EXECUTIVE SUMMARY

6-10

1. BUDGET OVERVIEW

11-13

1.1 EDUCATION AND GENERAL

1.2 CONTRACTS AND GRANTS

1.3 AUXILIARY AND OTHER SOURCES

1.4 FEDERAL AND STATE FUNDING

1.5 USF HEALTH

2. ECONOMIC AND FISCAL IMPACT ANALYSIS

2.1 METHODOLOGY

2.1.1 EXPENDITURES

2.2 DATA MODELING

2.3 ECONOMIC IMPACT

15-25 15 16 17

18-19

2.3.1 EMPLOYMENT IMPACT

2.3.2 LABOR INCOME

2.3.3 VALUE ADDED

2.3.4 ECONOMIC OUTPUT

2.4 FISCAL IMPACT

2.5 ECONOMIC AND FISCAL IMPACT OF USF HEALTH

CONCLUSION

ECONOMIC IMPACT REPORT 3

Key Terms1 USF-RELATED SPENDING Construction - USF’s spending on construction of campus infrastructural facilities. Operations • Employee compensation: USF employees’ salaries and benefits. • Other operations: USF’s non-salary spending on goods and services to support ongoing operations, including supplies and maintenance, printing, postage, materials, utilities, scholarships and fellowships, and other miscellaneous operating expenses. Research Spending - USF’s spending on research and innovation. Student Spending - Personal non-tuition-related spending by USF’s students on regional goods and services, including food, housing, transportation, health care, and other personal expenses such as retail and recreation. Visitor Spending – This is spending by the visitors to game events organized at USF. Visitors’ expenditures related to travel, lodging, food, etc. are included in this category.

INPUT-OUTPUT

A type of applied economic analysis that tracks the interdependence among various producing and consuming industries in an economy. It measures the relationship between a given set of demands for final goods and services, and the inputs required to satisfy those demands.

DIRECT EFFECT

Initial effects to a local industry or industries due to the activity or policy being analyzed.

INDIRECT EFFECT

Effects stemming from business-to-business purchases in the supply chain taking place in the region.

INDUCED EFFECT

Induced effects are the values stemming from household spending of labor income, after removal of taxes, savings and commuter income. The induced effects are generated by the spending of the employees within the business’s supply chain.

EMPLOYMENT (IMPLAN OUTPUT)

https://implanhelp.zendesk.com/hc/en-us/articles/360044986593Glossary 1

4 UNIVERSITY OF SOUTH FLORIDA

The number (headcount) of part-time, full-time and temporary jobs supported by USF-related spending, including USF payroll employees and employees supported by other non-USF-salary direct spending (other operations).

Jobs “supported” is inclusive of jobs generated and existing jobs that have now been expanded in scope by USF-related spending, which helps maintain workers’ employment. For example, a factory worker at a food processing plant continues to pack food as USF’s food consumption increased food demand. It is not likely that the worker was hired specifically because of USF’s food purchases and therefore the worker’s position was not a new job generated. Instead, USF’s direct spending supported the job by increasing food demand and subsequently increasing food supply, which helps keep the factory worker employed. Alternatively, the 52,095 workers who USF directly employs represent jobs generated by USF. In the absence of the university, these jobs would be nonexistent.

LABOR INCOME (IMPLAN OUTPUT)

All forms of employment income, including employee compensation and benefits such as insurance, retirement benefits.

VALUE ADDED (IMPLAN OUTPUT)

The difference between an industry’s or establishment’s total output and the cost of its intermediate inputs; it is a measure of the contribution to GDP.

ECONOMIC OUTPUT (IMPLAN OUTPUT)

The total value of production of goods and services generated through USF-related spending, including the value of intermediate inputs — the goods and services used in the production of equipment, raw materials, energy and other production inputs.

TAX REVENUE (IMPLAN OUTPUT)

Money generated by all individuals and institutions involved or impacted by USF-related spending (through the direct, indirect and induced effects) to support federal, state and local governments. Revenue is mostly generated by sales, property, income and Social Security taxes.

TAXES ON PRODUCTION AND IMPORTS (TOPI)

Taxes on Production & Imports, less subsidies (TOPI) (previously called taxes) include sales and excise taxes, customs duties, property taxes, motor vehicle licenses, severance taxes, other taxes and special assessments.

OTHER PROPERTY INCOME (OPI)

Other Property Income (OPI) is a metric that represents income generated by industries throughout economies from non-operating activities. Basically, OPI represents gross operating surplus minus proprietor income.

ECONOMIC IMPACT REPORT 5

EXECUTIVE SUMMARY The University of South Florida has strategically leveraged its status as a world-class public urban research university for maximum social and economic impact throughout the Tampa Bay region and the state of Florida.2 Serving more than 50,000 students, USF had an annual budget of $1.85 billion and annual economic output of $6.02 billion in the state of Florida in the 2019-20 fiscal year. With 244 degree programs, 2,400 patents and an academic medical center that offers patient care through more than 1.08 million patient visits annually, USF not only adds to the vibrancy and strength of the regional economy as a center of knowledge and culture, but also serves as an economic catalyst through its robust innovation enterprise — the multi-faceted effort to advance technology transfer through patents and licensing, faculty startups, public-private partnerships and the USF Research Park.3 In this report, the breadth and depth of USF’s economic impact can be seen in all aspects of the university’s operations — from the students it educates, to the faculty and professional staff it employs, to the talented professionals and entrepreneurs who power a modern innovation economy, to the construction projects that shaped the campuses in Tampa, St. Petersburg and Sarasota-Manatee. In all, the university contributes 68,704 jobs, $2.56 billion in earnings, $3.82 billion in GDP and $6.02 billion in economic output. The American economy is deeply intertwined with the size and intellectual reach of its research universities, where economic impact is driven by the interplay between universities, firms, entrepreneurs, research labs and inventors.4 As one of Florida’s largest urban research universities, USF generates economic impact through: • Operations • Construction • Student spending • Research and innovation • Visitor spending on sports events

Re-Classification: The Carnegie Foundation for the Advancement of Teaching. Created by Institution on 1/28/2019. Last modified on 4/15/2019. https://www.usf.edu/engagement/carapp.pdf 2

The Washington Economics Group. The Economic Impacts of USF’s Innovation Enterprise on the Tampa MSA and the State of Florida, 2019. https://www.usf.edu/research-innovation/rf/documents/ weg-report-2019.pdf 3

Brookings Institution. Hidden in plain sight: The oversized impact of downtown universities. October 2017. https://www.brookings. edu/wp-content/uploads/2017/10/2017-10-10_ocs_bass_downtown_universities_scott_andes_full.pdf 4

6 UNIVERSITY OF SOUTH FLORIDA

The university employs 16,2775 people, making it the 14th largest public employer in the state of Florida. Importantly, many of the jobs supported by USF are in high-skill, high-wage, knowledge-based industries, such as life sciences, information technology and financial services USF further generates fiscal impact through tax revenues to federal, state and local governments. In 2019-20, USF-related spending generated more than $600 million in federal, state and local tax revenue, mostly generated by sales, property and personal income taxes. This tax revenue helps support regional development, as every dollar in state support to USF generates a total tax revenue of $1.41.

As one of just 56 public research universities nationwide classified as a doctoral university with “Highest Research Activity” by the Carnegie Foundation for the Advancement of Teaching, USF has systemically adopted the Carnegie Foundation’s definition for Community Engagement as “collaboration between institutions of higher education and their larger communities for the mutually beneficial exchange of knowledge and resources …” While younger than many of its institutional counterparts and consistently producing year-over-year gains in new annual grants and contracts and research expenditures, the impact of USF research and innovation is not only demonstrated in dollars spent or patents accumulated but also on the economic vitality of Tampa Bay in particular and Florida in general. In 2020, the George W. Bush Institute (the policy arm of the Bush Presidential Center), Southern Methodist University and venture development firm Opus Faveo Innovation Development ranked public and private American institutions on a series of metrics and placed USF at 13th in productivity among 54 large institutions with an average annual research spending of more than $330 million.7 In many ways, USF is representative of the importance and influence of research universities, particularly those located in urban settings, in shaping the regional and state knowledge economy, as leading economists have noted on a global scale. “We show that the relationship between GDP per capita and universities is not simply driven by the direct expenditures of the university, its staff and students. Part of the effect of universities on growth is mediated through an increased supply of human capital and greater innovation,” said Anna Valero of the London School of Economics and John Van Reenen of the Massachusetts Institute of Technology in their 2018 global analysis.8

https://www.usf.edu/ods/documents/system-facts/usf-system-facts2020-21-final.pdf 5

The Washington Economics Group, 2019. https://www.usf.edu/ research-innovation/rf/documents/weg-report-2019.pdf 6

The Innovation Impact of U.S. Universities: Rankings and Policy Conclusions. 2020. https://gwbcenter.imgix.net/Publications/Resources/ gwbi-university-impact-report-ranks-exec-summary-full-report.pdf 7

Valero, Anna, and John Van Reenen. The economic impact of universities: Evidence from across the globe. Economics of Education Review, Volume 68, 2019, Pages 53-67. ISSN 0272-7757. https://doi.org/10.1016/j. econedurev.2018.09.001. 8

ECONOMIC IMPACT REPORT 7

The university also plays an important role in the building and strengthening of more inclusive communities where education and economic opportunities build bridges across longstanding societal barriers. About half of USF’s students and about 37% of its employees are non-white (36% of faculty and 39% of other staff). Moreover, at USF the six-year graduation rate for the 41% of students who are recipients of Pell grants — the federal student assistance provided for the most economically challenged families — is nearly equal to the graduation rate for students from more privileged backgrounds. USF also has been nationally lauded for largely eliminating the achievement gap based on race.9 As corporations relocate to the Tampa Bay region and homegrown enterprises grow, the strength, depth, skill and diversity of talent is critical to the success, stability and sustainability of the regional economy and raising the standard of living for all.10

Employment Comparison Among Florida’s Public Universities University of South Florida (Tampa Bay) University of Florida (Gainesville) Florida State University (Tallahassee) University of Central Florida (Orlando) Florida International University (Miami) Florida Atlantic University (Boca Raton) University of North Florida (Jacksonville) Florida A&M University (Tallahassee) Florida Gulf Coast University (Fort Myers) University of West Florida (Pensacola) New College of Florida (Sarasota) Florida Polytechnic (Lakeland) 0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

Percent of Florida’s Total Non-farm Employment

STATEMENT OF METHODS Irwin, Janelle. https://www. bizjournals.com/tampabay/ news/2018/02/22/usf-chosenas-leader-in-graduationrates-as-the.html. Tampa Bay Business Journal. Feb. 2, 2018. https://www.bizjournals.com/ tampabay/news/2018/02/22/ usf-chosen-as-leader-in-graduation-rates-as-the.html 9

https://www.bizjournals.com/ tampabay/news/2021/02/05/ tampa-net-inflow-of-residents-2020.html 10

https://www.usf.edu/business-finance/resource-management-analysis/documents/ operating-budget-19-20.pdf

Researchers performed the Input-Output analysis to estimate the economic and the fiscal impacts of USF on the state of Florida in the 2019-20 fiscal year using the IMPLAN modeling system, a regional economic analysis software and data application.

ECONOMIC IMPACT

USF received state support of $427.8 million in the 2019-20 fiscal year.11 In turn, the university generates direct economic impact through its spending on wages and purchases from Florida-based vendors. This spending by USF produces indirect economic impact also when its local suppliers hire employees and make purchases from other local vendors. Finally, spending of wages by the employees of USF and its suppliers in the Florida economy produces induced economic impact. Aggregating these direct, indirect and induced impacts gives total economic impact.12

https://gardner.utah.edu/ wp-content/uploads/EconCont-UProper.pdf 12

FISCAL IMPACT

In addition to economic impact, USF generates fiscal impact through tax revenues to federal, state and local governments. The researchers estimate how much each dollar in state funding to USF translated to the total federal, state and local tax revenue in the 2019-20 fiscal year.

8 UNIVERSITY OF SOUTH FLORIDA

KEY FINDINGS

1. The University of South Florida produced total economic output of $6.02 billion in Florida in fiscal year 2019-20.

• Every dollar in state funding helped generate $14.07 in economic output.

2. In 2019-20, USF-related direct spending, together with ripple

effects (indirect and induced economic effects), supported 68,704 jobs in Florida. Importantly, many of the jobs supported by USF’s research enterprise are in high-skill, high-wage knowledge industries.

Key Finding No. 1

$6.02 Billion INDUCED $1,709 million 28.39%

DIRECT $3,253 million 54.07%

3. Every dollar in state support leveraged $3.33 from other

non-state-government sources for USF during the 2019-20 fiscal year. These funds help USF deliver high-quality educational services that attract more than 50,000 students annually and build a research and innovation enterprise that works to produce new knowledge and technologies. • In 2019-20, in addition to the Florida taxpayer money provided to support the institution, USF generated $1.43 billion in additional revenues, including from the federal government, the private sector, auxiliary enterprises and intercollegiate athletics.13

INDIRECT $1,055 million 17.54%

Key Finding No. 2

68,704 Jobs

• State funding over the years has helped USF to develop as the fastest-rising public university in the nation over the last decade.14

4. USF was awarded a record $535.4 million in research contracts

and grants in the 2019-20 fiscal year.15, 16 USF’s commitment to research and innovation is evident from the fact that USF’s faculty, staff, students and alumni collectively hold more than 2,400 U.S. patents as of 2019. USF is eighth among American public research universities and 16th among all universities worldwide in generating new patents, according to the 2020 report of the National Academy of Inventors and the International Property Owners Association.17 The ranking places USF as a leader among the more than 1,000 academic institutions generating new, novel and useful inventions granted intellectual property protection from the U.S. Patent and Trademark Office. The IPO additionally has recognized USF in the top 300 of patent producers worldwide in eight of the last 11 years. USF’s standing as a leader in technology transfer generates significant economic development impacts for the Tampa Metropolitan Statistical Area and throughout Florida, the Washington Economics Group found in its 2019 analysis of the USF Innovation Enterprise.18

INDUCED 10,252 Jobs 14.92% DIRECT 52,095 Jobs 75.83%

INDIRECT 6,356 Jobs 9.25%

https://www.usf.edu/business-finance/resource-management-analysis/documents/operating-budget-19-20.pdf 13

https://www.usf.edu/news/2020/usf-is-americas-fastestrising-university-according-to-us-news-world-report.aspx 14

Source: USF Financial Aid Office

https://www.usf.edu/research-innovation/about-usfri/ points-of-pride.aspx 16

National Academy of Inventors, Top 100 Worldwide Universities Granted U.S. Utility Patents, 2020. https:// www.ingentaconnect.com/content/nai/ti/2020/00000021/ a00103s1/art00001# 17

Washington Economics Group. Ibid.

ECONOMIC IMPACT REPORT 9

5. In the last several years, USF Health has achieved continuous

development in the quality and quantity of clinical care and research along with enhancing the quality of the services and educational offerings provided to the students. • In the fiscal year 2019-20, USF Health logged a total of 503,316 outpatient visits. The total number of telehealth visits since March 2020 was 162,000.19 • The USF Health Morsani College of Medicine and Heart Institute now serves as an anchor tenant for downtown Tampa’s transformative Water Street District development, bringing approximately 1,800 students, faculty and staff to live, work, study and conduct research along the downtown waterfront and contribute to the district’s knowledge economy. The Morsani College of Medicine and Heart Institute is the centerpiece of what has become the first neighborhood worldwide to achieve the WELL Community Standard, which entails design and policy strategies meant to improve the lives of its residents through the built environment.20 Locating the Morsani College of Medicine and Heart Institute downtown brings USF Health students, faculty and researchers closer to the university’s primary teaching hospital, Tampa General Hospital. This closer proximity and the enhanced research partnerships it generates increases the college’s eligibility for federal research funding, which in turn creates new jobs and attracts life science companies to Tampa, sparking at least $2.35 in local economic activity for every $1 in funding from the National Institutes of Health.21 Source: USF Health

Water Street Tampa First to Achieve WELL Design & Operations Designation for Global Wellness Standard for Communities. May 28, 2019. https://waterstreettampa.com/pressrelease/ water-street-tampa-first-to-achieve-well-design-operations-designation-for-global-wellness-standard-for-communities 20

Source: USF Health

https://www.baynews9.com/fl/tampa/news/2019/01/23/usf-seesrise-in-first-generation-college-students22

https://www.usf.edu/news/2018/new-report-finds-usf-amongnations-best-helping-lower-income-students.aspx 23

https://www.usf.edu/diversity/about-dieo/116167_dieo_annual_report-v7-compressed-min_reduce.pdf 24

Gianmarco I.P. Ottaviano, Giovanni Peri, The economic value of cultural diversity: evidence from US cities, Journal of Economic Geography, Volume 6, Issue 1, January 2006, Pages 9–44, https:// doi.org/10.1093/jeg/lbi002 25

SOCIAL IMPACT

In terms of social impact, USF helps break the cycle of poverty, evidenced by its continued efforts in uplifting first-generation and low-income students. One out of every four USF students is a first-generation student,22 and 41% of USF’s students support their education with federal Pell grants,23 which are awarded to undergraduate students with exceptional financial need. USF fosters gender, racial and ethnic diversity and equity not only in the student community, but also in its work force. About half of full-time students at USF are non-white. About one-third of USF’s faculty are non-white and about 40% of USF’s staff are non-white.24 As a community standard bearer, USF strives to create an inclusive environment for people of all races, colors, genders, ages, national origins, religions, ability, familial status, sexual orientation, gender identities and expressions. Equal opportunities with respect to education and jobs can generate a wide range of economic benefits for the communities USF serves.25

10 UNIVERSITY OF SOUTH FLORIDA

BUDGET OVERVIEW

ECONOMIC IMPACT REPORT 11

Figure 1.1 Sources of Funding (percent distribution)

AUXILIARY AND OTHER

38%

EDUCATION AND GENERAL

39%

CONTRACTS AND GRANTS

23% Figure 1.2 USF Educational and General Budget Expenditure for Fiscal Year 2019-20

1. BUDGET OVERVIEW USF has an annual operating budget of $1.8 billion.26 It receives funding from many public and private sources, as shown in figure 1.1. USF’s main sources of funds are from the state budget via Education and General funds, Contracts and Grants, Auxiliary revenues and other sources. In the fiscal year 2019-20, the largest share of funds came from Education and General state appropriations, which comprised 39% of the total funds.

1.1 EDUCATION AND GENERAL

Education and General (E&G) are the funds appropriated by the Florida Legislature to USF and include General Revenue (primarily derived from Florida’s sales tax), Educational Enhancement (receipts from Florida Lottery sales), and student tuition and other fees. In the fiscal year 2019-20, 51% of the university’s funding came from the General Revenue portion of the Education and General budgeted expenditure, which was $364.2 million of the total E&G Funds. • In the fiscal year 2019-20, revenue from matriculation and out-of-state fees amounted to $228.5 million, which included $184.3 million in matriculation fees and $44.1 million of out-of-state fees collected.27 • In the fiscal year 2019-20, funds amounting to $46.2 million were procured from other fees that included application fees, late registration fees, tuition differential and other fees and revenues plus the research overhead contribution.28

1.2 CONTRACTS AND GRANTS TUITION

40%

GENERAL REVENUE

51%

USF contracts and grants are funds invested in research support activities, public service and training. These activities are funded with awards from federal, state, local and private sources. Contracts and grants contributed $424.88 million, which was 23% of the total operating budget in the fiscal year 2019-20.

1.3 AUXILIARY AND OTHER SOURCES LOTTERY

https://www.usf.edu/business-finance/resource-management-analysis/documents/operating-budget-19-20.pdf 26

https://www.usf.edu/business-finance/resource-management-analysis/documents/operating-budget-19-20.pdf 28 https://www.usf.edu/business-finance/resource-management-analysis/documents/operating-budget-19-20.pdf 27

https://www.usf.edu/business-finance/resource-management-analysis/documents/operating-budget-19-20.pdf 29

12 UNIVERSITY OF SOUTH FLORIDA

USF receives funding from auxiliary sources and other sources of funding, such as Student Activity & Service fees, Intercollegiate Athletics revenues, Concessions and Student Financial Aid. In the fiscal year 2019-20, revenue from sales and services of auxiliary enterprises contributed 12.18% of USF’s total funds. USF received approximately $226.5 million from other funding sources.29 The auxiliary enterprises include goods and services, housing and dining, bookstore, and parking facilities among others. Housing contributed $73.2 million of the revenue for the Tampa campus and $6.83 million for the St. Petersburg campus for fiscal year 2019-20. Other sources also include private gifts and grants from alumni and philanthropic organizations, as well as royalty income from USF-founded startups and licensed inventions. In 2019-20, royalty and fee income from USF startups totaled $1.75 million, and intellectual property royalty income totaled $3.13 million.

1.4 FEDERAL AND STATE FUNDING

USF receives support from federal and state governments for research and student financial aid. In the fiscal year 2019-20, USF received $535.4 million for research contracts and grants.30

Figure 1.3: Change in Student Financial Aid Support by Federal and State32

USF received federal funding of $279.4 million and state funding of $85.2 million, respectively for student financial aid in the fiscal year 2019-20.31 The financial aid includes grants, loans and scholarships. There was a 4% decrease in federal funds and 15% increase in state funds towards financial aid from the year 2018-19 to 2019-20. • The USF Sarasota-Manatee campus and USF St. Petersburg campus received state funding of $5 million and $3.5 million respectively in recurring funds for operational support, which will help to provide new course and degree program options.33 • USF also received $200,000 to implement and oversee a new pilot program to provide alternative treatment options for veterans certified by the U.S. Department of Veterans Affairs or a branch of the U.S. military as having PTSD or a traumatic brain injury (TBI). Alternative treatments include accelerated resolution therapy (ART), hyperbaric oxygen therapy and music therapy.35

1.5 USF HEALTH

2015-16 2016-17 2017-18 2018-19 2019-20 In millions

$250M $350M

$100M

$300M

n Federal

$200M n State

Figure 1.4: USF Health Educational and General Budgeted Expenditures

USF Health had an annual operating budget of $443.33 million in fiscal year 2019-20.36 It receives its funds from Educational and General (E&G) sources and non-E&G funding sources. In fiscal year 2019-20, USF Health generated revenue of $58.5 million from E&G sources.37

TUITION

44%

Educational and General (E&G) sources: E&G funding sources contributed $146.3 million to the total funding of USF Health.38 E&G sources include General Revenue, Tuition and Lottery. Most of the E&G funds come from General Revenue (primarily Florida’s sales tax) and tuition. Non-E&G Funding Sources: Non-E&G funding sources include contracts and grants, auxiliary enterprises, student financial aid, and technology fees. The total funds available from auxiliary enterprises for fiscal year 2019-20 were $35.7 million.39 Non-E&G funds contributed $297.1 million to the total funding.40 USF Health received $12.4 million to complete the construction of the USF Health Morsani College of Medicine and Heart Institute in the new Water Street district of downtown Tampa.41

$0 $50M $150M

GENERAL REVENUE

47%

LOTTERY

9% https://www.usf.edu/research-innovation/about-usfri/pointsof-pride.aspx 30

Source: USF Financial Aid Office

Souce: USF Financial Aid Office

https://www.usf.edu/magazine/2019-summer/university/

https://www.usf.edu/business-finance/ resource-management-analysis/documents/operating-budget-19-20.pdf 36

Figure 1.5: USF Health Non-Educational and General Budgeted Expenditure

https://www.usf.edu/business-finance/resource-management-analysis/documents/operating-budget-19-20.pdf 37

https://www.usf.edu/business-finance/resource-management-analysis/documents/operating-budget-19-20.pdf 38

Contracts and Grants Auxiliary Enterprises

https://www.usf.edu/business-finance/resource-management-analysis/documents/operating-budget-19-20.pdf 39

Technology Fee

https://www.usf.edu/business-finance/resource-management-analysis/documents/operating-budget-19-20.pdf 40

Student Financial Aid 0 100,000,000 200,000,000 300,000,000

https://www.usf.edu/magazine/2019-summer/university/

Funds from Various Non-E&G Sources

ECONOMIC IMPACT REPORT 13

ECONOMIC AND FISCAL IMPACT ANALYSIS

14 UNIVERSITY OF SOUTH FLORIDA

2. ECONOMIC AND FISCAL IMPACT ANALYSIS This section evaluates USF’s economic and fiscal impact on the state of Florida. The impact analysis considers four USF entities: the USF Tampa campus, the USF St. Petersburg campus, the USF Sarasota-Manatee campus, and USF Health. This section also presents the individual impacts of each of the four entities on the state of Florida. The results presented in this section are based on the annual expenditures incurred by the university over the fiscal year 2019-20, the data for which was provided by the USF president’s office. This section presents the economic impact in terms of multiple standard impact measures, such as the economic output, the employment impact, the labor income impact and the value-added. These impact measures are estimated based on the allocated budget detailed in section two and expenditures incurred by the university in the fiscal year 2019-20. This report also details USF’s fiscal impact, which covers different tax contributions through average costing approach. This section begins with the methodology sub-section 2.1, which highlights how money spent in the economy is related to USF in terms of institutional and personal individual spending. This will detail expenditures based on various high-level categories and their contributions to overall economic impact. This section is followed by sub-section 2.2, which talks about data modeling. Going further, sub-section 2.3 details the economic impact of USF on the entity level, as shown in figure 2a, and their individual impacts in each expenditure category, as shown in figure 2.2 a. Section 2.3 also provides details about IMPLAN’s four major outputs — Employment, Labor Income, Value Added and Economic Output — in individual sections with more details. Furthermore, section 2.4 highlights USF’s Fiscal Impact, which reveals its contribution towards tax in two categories: Federal; and State & Local. Finally, sub-section 2.5 highlights key findings of the Economic and Fiscal Impact analysis of USF Health. Figure 2a: USF Entities by Region USF Entity Location County USF Tampa campus

Tampa

Hillsborough

USF St. Petersburg campus

St. Petersburg

Pinellas

USF Sarasota-Manatee campus Sarasota

Sarasota

USF Health Tampa Hillsborough

2.1 METHODOLOGY

The goal of this study is to measure USF’s economic and fiscal impacts to the state of Florida. Impact analyses use expenditure data to estimate an entity’s contributions to an economy. For example, USF’s spending of $195.21 million on research would support a certain number of jobs and generate additional economic activity that would not have otherwise been produced without the research spending by USF.

ECONOMIC IMPACT REPORT 15

USF’s economic impact on the state of Florida stems not only from the direct institutional spending but also from the spending by associated individuals, such as the students, faculty and other staff. For example, a student moving to the Tampa Bay region to attend USF would spend his or her own money on housing, food, groceries and recreational activities. These expenditures support the economy of Florida and are considered part of USF’s economic impact. To assess the economic and fiscal impacts of USF on Florida, five categories of expenditures for the fiscal year 2019-20 were considered: university spending on construction, university spending on operations (employee compensation and operation costs), university spending on research, students’ non-tuition spending, and visitors’ spending during university sports events. Figure 2.2 defines USF’s expenditure categories.

Figure 2.1a: USF Expenditure Categories Expenditure Category

Description

Construction

USF’s 2019-20 spending on construction of campus infrastructural facilities.

Operations

Employee compensation: USF employee salaries and benefits.

Other Operations: USF’s non-salary spending on goods and services to support ongoing operations, including supplies and maintenance, printing, postage, materials, utilities, scholarships and fellowships, and other miscellaneous operating expenses. Research spending

USF’s spending on research and innovation.

Student spending

Personal non-tuition-related spending of USF’s students on regional goods and services, including food, housing, transportation, health care, and other personal expenses such as retail and recreation. These are students’ personal expenditures, as opposed to those of the university.

Visitors’ spending on sports events

This is spending by the visitors to game events organized at USF. Expenditures related to travel, lodging, food, etc. are included in this category.

2.1.1 EXPENDITURES

USF’s university-wide expenditures (excluding student spending) totaled more than $2 billion, and students’ personal spending, apart from tuition and fees, contributed almost $1 billion (approximately 32% of the total spending). Employee compensation accounted for more than 30% of USF’s spending. USF’s spending on research amounts to $195 million.

16 UNIVERSITY OF SOUTH FLORIDA

Figure 2.1b Expenditures Details Expenditure USF Tampa campus

USF St. Petersburg USF Sarasota- campus Manatee campus

USF Health

Total

Construction Operations

$16,804,724 $1,121,429 $174,352 $16,585,250 $34,685,755

Employee Compensation

$571,259,479 $52,129,007 $23,685,694 $303,537,542 $950,611,722

Other Operations

$750,633,586 $24,881,984 $6,642,602 $84,818,293 $866,976,465

Student Spending

$847,165,327 $89,947,800 $34,520,077 - $971,633,205

Research and Innovation

$97,345,066 $9,980,055 $324,776 $87,555,441 $195,205,337

Visitors Sports Events

$30,686,515 - - - $30,686,515

Total

$2,313,894,697 $178,060,276 $65,347,501 $492,496,526 $3,049,798,999 (Note: USF Health student spending is included in the Tampa campus figure.)

2.2 DATA MODELING

The economic and fiscal impacts of USF’s general campuses and USF Health on Florida’s economy, including direct, indirect and induced impacts, were estimated using the IMPLAN modeling system. IMPLAN utilizes an economic modeling technique called Input-Output analysis, which is a type of applied economic analysis that tracks the interdependence among various producing and consuming industries of an economy. It measures the relationship between a given set of demands for goods and services and the inputs required to satisfy those demands. The indirect and induced effects are also known as “ripple” or “multiplier” effects, as initial direct expenditures generate sequential rounds of spending in the economy. This study measures economic impacts through four standard impact measures: employment, labor income, output, and value added, defined in the Key Terms table in the beginning of this report.

ECONOMIC IMPACT REPORT 17

Figure 2.2a: USF-Related Expenditures and Impacts

USF Operations, Construction, Research

General USF USF employee compensation operating purchases on goods and services

Visitors’ Spending on Sports Events

USF Student Spending

Expenditures on gas, hotel, food

Out-of-pocket purchases on goods and services

Construction and capital improvement purchases

Business-to-business spending by suppliers

Household spending by USF employees, USF retirees, and suppliers’ employees

INCLUDES VALUE ADDED AND INTERMEDIATE INPUTS

INCLUDES LABOR INCOME AND TOPI + OPI

Figure 2.3a Economic Impact Indicators Hierarchy42 ** For technical terms like TOPI and OPI, please refer Key Term Dictionary

https://implanhelp.zendesk.com/hc/en-us/articles/360051087334Quick-Start-Module-3-Results-Additional-Details 42

18 UNIVERSITY OF SOUTH FLORIDA

Indirect Impact

Induced Impact

2.3 ECONOMIC IMPACT

Economic Output Value Added

EMPLOYEE COMPENSATION AND PROPRIETORS’ INCOME ARE THE FACTORS

Direct Impact

Labor Income

This section provides comprehensive quantitative estimates of the state-level economic impacts generated by USF-related spending. As defined in section 2.1, direct economic impacts are the effects resulting from immediate USF-related spending, and the indirect and induced impacts are ripple effects in the economy (supply-chain interaction and increased household spending). Impacts are indicated by effects on employment, labor income, value added, and economic output. USF’s economic impact is assessed based on five wide categories of expenditures: construction, operations, student spending, Research and Innovation and visitor spending. These categories’ economic impact is sub-divided into direct, indirect and induced effects. This section also provides a deep dive into USF’s four entities – the Tampa campus, the Sarasota-Manatee campus, the St. Petersburg campus and USF Health on all mentioned points.

Figure 2.3b: Total Economic Impacts by Entity on Florida Entity

Employment

Labor Income

Value Added

Output

USF Tampa campus 54,608.694

$1,853,055,751.57

$2,805,283,521.61

$4,536,545,943.75

USF St. Petersburg campus

$170,435,630.14

$280,896,925.27

$442,623,295.12

13,593.38

USF Sarasota- 11,316.56 Manatee campus

$59,368,302.97 $89,862,921.96

$130,579,473.47

USF Health 19,688.93 $527,536,065.92 $721,204,458.99 $1,019,576,057.56

ECONOMIC IMPACT REPORT 19

2.3.1 EMPLOYMENT IMPACT

In 2019-20, employment supported by university direct spending (construction, operations, USF Research and Innovation, visitor spending and student spending) included about 52,000 total USF employees. Including ripple effects (indirect and induced impacts), 68,704 jobs are supported by USF-related spending. In terms of individual entity, the Tampa campus accounts for more than 50,000 of the total jobs generated. Every $6,227 in state funding to USF supported one job in Florida. Figure 2.3c: Summary of Employment Economic Impacts Expenditure USF Tampa campus Construction

USF St. Petersburg USF Sarasota- campus Manatee campus

USF Health

Total

Direct 119.71 7.99 1.24 118.15 247.09 Indirect 32.50 2.17 0.34 32.08 67.09 Induced 44.48 2.97 0.46 43.90 91.81 Total 196.70 13.13 2.04 194.13 405.99 Operations Direct 32,310.41 11,303.20 10,532.15 16,452.77 40,599.34 Indirect 2,474.89 75.75 20.15 260.79 2,829.10 Induced 5,479.81 375.91 164.76 1,792.23 7,729.99 Total 40,265.12 11,754.86 10,717.07 18,505.79 51158.43 Student Spending Direct 8,881.65 1,021.15 419.97 NA 10,205.42 Indirect 2,220.60 418.96 102.44 NA 2,555.28 Induced 1,526.69 272.55 71.38 NA 1,755.36 Total 12,628.93 1,712.66 593.79 NA 14,516.06 Research and Innovation Direct 378.60 38.81 1.26 340.52 759.20 Indirect 417.71 42.82 1.39 375.70 837.63 Induced 303.28 31.09 1.01 272.78 608.17 Total 1,099.59 112.73 3.67 989.01 2,205.00 Visitor Spending Direct 283.91 NA NA NA 283.91 Indirect 67.34 NA NA NA 67.34 Induced 67.10 NA NA NA 67.10 Total 418.35 NA NA NA 418.35 Total Direct 41,974.27 12,371.15 10,954.62 16,911.45 52,094.96 Indirect 5,213.05 539.70 124.33 668.57 6,356.44 Induced 7,421.36 682.53 237.62 2,108.91 10,252.43 Total 54,608.69 13,593.38 11,316.56 19,688.93 68,703.84

20 UNIVERSITY OF SOUTH FLORIDA

2.3.2 LABOR INCOME

USF employees (full-time and part-time) supported by university direct spending (construction, operations, USF Research and Innovation, visitor spending and student spending) earned about $1.6 billion in labor income (all forms of employment income, including fringe benefits) across Florida in 2019-20. With the addition of ripple effects, USF-related spending supports more than $2.5 billion in labor income. Every dollar in state support generated $5.99 in labor income.

Figure 2.3d: Summary of Labor Income Impact USF Tampa USF St. Petersburg USF Sarasota- campus campus Manatee campus

Value Added

Total Impact

Construction Direct Indirect Induced Total

$6,852,596.88 $457,294.14 $1,984,129.45 $132,406.85 $2,293,077.59 $153,023.88 $11,129,803.92 $742,724.86

Operations Direct Indirect Induced Total

$959,963,646.40 $70,629,064.06 $31,668,301.63 $341,139,937.95 $1,386,952,838.51 $127,148,023.18 $4,075,262.75 $1,087,766.10 $14,754,591.12 $146,938,059.41 $282,571,984.34 $19,386,402.11 $8,497,195.44 $92,430,231.17 $398,619,454.66 $1,369,683,653.92 $94,090,728.92 $41,253,263.17 $448,324,760.24 $1,932,510,352.58

$71,096.80 $20,585.66 $23,791.05 $115,473.52

$6,763,100.41 $14,144,088.24 $1,958,216.27 $4,095,338.23 $2,263,129.48 $4,733,022.00 $10,984,446.16 $22,972,448.47

Student Spending Direct $176,427,348.43 $28,290,856.43 $8,349,319.89 NA $202,726,856.29 Indirect $124,450,327.50 $25,484,326.32 $5,718,200.30 NA $143,216,924.26 Induced $78,684,405.33 $14,050,117.64 $3,678,967.20 NA $90,469,684.00 Total $379,562,081.26 $67,825,300.40 $17,746,487.39 NA $436,413,464.56 Research and Innovation Direct $35,999,466.98 $3,690,753.65 Indirect $24,216,589.54 $2,482,744.15 Induced $15,639,287.86 $1,603,378.15 Total $75,855,344.38 $7,776,875.95

$120,106.31 $80,794.67 $52,177.91 $253,078.90

$32,379,136.85 $72,189,463.65 $21,781,218.79 $48,561,347.06 $14,066,503.88 $31,361,347.75 $68,226,859.52 $152,112,158.46

Visitor Spending Direct $9,652,486.61 NA NA NA $9,652,486.61 Indirect $3,712,359.97 NA NA NA $3,712,359.97 Induced $3,460,021.51 NA NA NA $3,460,021.51 Total $16,824,868.09 NA NA NA $16,824,868.09 Total Direct Indirect Induced Total

$1,188,895,545.30 $103,067,968.28 $40,208,824.63 $281,511,429.64 $32,174,740.08 $6,907,346.73 $382,648,776.63 $35,192,921.78 $12,252,131.61 $1,853,055,751.57 $170,435,630.14 $59,368,302.97

$380,282,175.21 $1,685,665,733.30 $38,494,026.17 $346,524,028.93 $108,759,864.53 $528,643,529.92 $527,536,065.92 $2,560,833,292.16

ECONOMIC IMPACT REPORT 21

2.3.3 VALUE ADDED

USF spending contributes directly to $2.3 billion in value added to the state of Florida. When indirect and induced effects are considered, over $3.8 billion in value added is attributable to USF, which implies that for every dollar of state funding, USF generated an additional $7.93 in indirect and induced value added.

Figure 2.3e: Summary of Value Added Impact USF Tampa campus Construction

USF St. Petersburg USF Sarasota- campus Manatee campus

USF Health

Total Impact

Direct Indirect Induced Total

$10,128,861.00 $675,928.97 $105,088.57 $9,996,575.78 $20,906,454.33 $3,136,597.70 $209,314.48 $32,542.71 $3,095,633.03 $6,474,087.92 $4,045,048.61 $269,938.10 $41,968.03 $3,992,219.36 $8,349,174.11 $17,310,507.32 $1,155,181.55 $179,599.32 $17,084,428.17 $35,729,716.36

Operations Direct Indirect Induced Total

$1,092,401,997.23 $84,736,724.96 $37,360,294.69 $419,337,265.89 $1,932,510,352.58 $200,888,164.32 $6,451,354.52 $1,705,073.21 $22,204,496.75 $231,066,559.91 $498,771,498.86 $34,227,210.31 $15,002,789.25 $163,198,852.55 $703,666,941.40 $1,792,061,660.41 $125,415,289.79 $54,068,157.15 $604,740,615.20 $2,552,520,470.33

Student Spending Direct $540,656,800.77 $83,357,838.70 $20,530,977.59 NA $619,090,643.12 Indirect $178,890,990.35 $34,858,535.69 $8,229,678.42 NA $205,850,389.71 Induced $138,723,375.88 $24,782,262.41 $6,485,874.12 NA $159,501,424.23 Total $858,271,167.01 $142,998,636.80 $35,246,530.13 NA $984,442,457.06 Research and Innovation Direct $48,232,100.22 $4,944,873.21 $160,918.48 Indirect $34,653,231.06 $3,552,734.24 $115,614.81 Induced $27,605,754.63 $2,830,209.67 $92,102.07 Total $110,491,085.91 $11,327,817.12 $368,635.36

$43,381,580.47 $96,719,472.19 $31,168,286.78 $69,489,866.76 $24,829,548.38 $55,357,614.65 $99,379,415.63 $221,566,953.60

Visitor Spending Direct $15,244,025.04 NA NA NA $15,244,025.04 Indirect $5,797,448.92 NA NA NA $5,797,448.92 Induced $6,107,627.00 NA NA NA $6,107,627.00 Total $27,149,100.96 NA NA NA $27,149,100.96 Total Direct Indirect Induced Total

22 UNIVERSITY OF SOUTH FLORIDA

$1,706,663,784.27 $173,715,365.84 $58,157,279.33 $472,715,422.14 $2,369,747,563.70 $423,366,432.36 $45,071,938.93 $10,082,909.15 $56,468,416.56 $518,678,353.22 $675,253,304.97 $62,109,620.50 $21,622,733.47 $192,020,620.29 $932,982,781.39 $2,805,283,521.61 $280,896,925.27 $89,862,921.96 $721,204,458.99 $3,821,408,698.32

2.3.4 ECONOMIC OUTPUT

USF spending generated $3.2 billion in direct economic output in the state of Florida in the fiscal year 2019-20. Including the indirect and induced effects, the total economic output was $6.02 billion. It implies that every dollar in state funding helped generate $14.07 in economic output.

Figure 2.3f: Summary of Economic Output Impacts USF Tampa USF St. Petersburg campus campus Construction Direct $16,804,723.67 $1,121,429.11 Indirect $6,378,563.59 $425,660.49 Induced $7,408,645.99 $494,400.95 Total $30,591,933.26 $2,041,490.55 Operations Direct Indirect Induced Total

USF Sarasota- Manatee campus

USF Health

Total Impact

$174,351.73 $66,178.63 $76,865.90 $317,396.26

$16,585,250.17 $34,685,754.68 $6,295,258.11 $13,165,660.82 $7,311,887.40 $15,291,800.24 $30,192,395.67 $63,143,215.74

$1,446,969,963.53 $92,080,771.57 $35,545,502.89 $452,991,701.30 $2,026,224,219.99 $416,420,183.21 $12,962,161.47 $3,431,988.74 $43,295,528.55 $475,746,775.40 $913,376,655.64 $62,675,004.82 $27,471,941.96 $298,835,914.05 $1,288,565,222.29 $2,776,766,802.39 $167,717,937.86 $66,449,433.60 $795,123,143.91 $3,790,536,217.68

Student Spending Direct $847,165,327.33 $139,126,100.42 $34,520,077.05 NA $971,633,204.79 Indirect $363,685,576.19 $66,204,158.29 $16,691,086.45 NA $418,454,093.58 Induced $254,112,312.87 $45,390,716.46 $11,880,895.32 NA $292,173,281.31 Total $1,464,963,216.39 $250,720,975.17 $63,092,058.82 NA $1,682,260,579.68 Research and Innovation Direct $97,345,065.72 $9,980,054.89 Indirect $68,083,015.19 $6,980,037.70 Induced $50,552,818.61 $5,182,798.95 Total $215,980,899.52 $22,142,891.54

$324,775.82 $227,147.80 $168,661.17 $720,584.79

$87,555,440.93 $195,205,337.00 $61,236,164.06 $136,526,364.49 $45,468,912.99 $101,373,191.54 $194,260,517.98 $433,104,893.03

Visitor Spending Direct $25,581,354.46 NA NA NA $25,581,354.46 Indirect $11,477,265.47 NA NA NA $11,477,265.47 Induced $11,184,472.26 NA NA NA $11,184,472.26 Total $48,243,092.20 NA NA NA $48,243,092.20 Total Direct Indirect Induced Total

$2,433,866,434.71 $242,308,355.99 $70,564,707.49 $866,044,603.66 $86,572,017.96 $20,416,401.61 $1,236,634,905.37 $113,742,921.17 $39,598,364.36 $4,536,545,943.75 $442,623,295.12 $130,579,473.47

$557,132,392.40 $3,253,329,870.92 $110,826,950.72 $1,055,370,159.77 $351,616,714.44 $1,708,587,967.63 $1,019,576,057.56 $6,017,287,998.32

ECONOMIC IMPACT REPORT 23

2.4 FISCAL IMPACT

In addition to economic impact, USF generated significant fiscal impact through substantial tax revenue that supports federal, state and local governments. In 2019-20, USF-related spending generated more than $600 million in federal, state and local tax revenue. Federal taxes represented about 60% of tax revenue, with state and local taxes accounting for the rest. Federal, state and local governments benefit from the operations of USF through tax revenues. For example, USF’s spending on construction activities and salaries to the teaching and non-teaching workforce benefits governments in the form of federal, state and local taxes. This is called “Fiscal Impact.” Out of the total tax revenue generated from the activities and operations undertaken by USF, 72% comes from the Tampa campus and 20% comes from USF Health. Out of the total tax revenue generated by USF, 38% went to state and local governments. The $230.5 million in state and local tax revenue mostly generated by sales, property and personal income taxes helps support regional development. This analysis shows that every dollar in state support to USF generated total tax revenue of $1.41 in federal, state and local taxes.

Figure 2.4a: Tax Revenue Generated by Region, Dollars in Millions Entity Federal State and Local Total USF Tampa campus

267,015,602.12

169,402,327.39

436,417,929.51

USF St. Petersburg campus

20,370,556.60

22,236,210.53

42,606,767.13

6,281,904.06

14,254,922.51

32,612,929.63

120,330,433.78

USF Sarasota-Manatee campus 7,973,018.45 USF Health

87,717,504.15

24 UNIVERSITY OF SOUTH FLORIDA

2.5 ECONOMIC AND FISCAL IMPACT OF USF HEALTH

USF Health as a unit of USF has substantial economic and fiscal impact on the state of Florida. USF Health has total employment impact of 19,689 jobs. For every dollar of state funding, USF Health generates labor income of $1.19, value added of $1.63 and total economic output of $2.23. In addition to economic impact, USF Health also has fiscal impact on the state of Florida, through tax revenues. Every dollar of funding to USF Health generates fiscal impact of $0.27.

n Direct n Indirect n Induced 2,109 10.71%

$108.76M 20.62% $380.28M 72.09%

16,911 85.89%

669 3.40%

19,689

Employment Total Impact

$38.49M 7.30%

$527.54M

Labor Income Total Impact

$351.62 34.49%

$192.02M 26.62% $472.72M 65.55%

$56.47M 7.83%

$721.20M

Value Added Total Impact

$33.32M 34.49% $557.13M 54.64%

$110.83M 10.87%

$1,019.58M

Economic Output Total Impact

$78.20M 54.64%

$8.82M 10.87%

$120.33M

Tax Revenue

ECONOMIC IMPACT REPORT 25

CONCLUSION USF plays a crucial role in strengthening the economy of the Tampa Bay region as well as that of the state of Florida. USF-related spending delivers substantial economic and fiscal impacts annually to the state, generating $6.02 billion in economic output, $3.82 billion in value added, $2.56 billion in labor income, and $602.02 million in federal, state and local tax revenue. In addition, USF directly or indirectly supports 68,704 jobs in the state of Florida. In 2019-20, state funding for USF totaled $427.8 million. Every dollar of state funding helps generate: • $14.07 in economic output • $8.93 in value added • $1.41 in federal, state and local tax revenue • $5.99 in labor income • Every $6,227 in state funding to the University of South Florida supports one job in Florida These figures highlight the significance of the contribution of the University of South Florida to the economic strength and vibrancy of the state of Florida. This data underscores the fact that support of USF has a broad impact that extends beyond USF’s campuses to the whole of Florida’s economy. Moreover, USF’s unique role as an urban research university supports an environment in which the university and industry work as partners in creating meaningful impact within the broader community.

26 UNIVERSITY OF SOUTH FLORIDA

ECONOMIC IMPACT REPORT 27

OFFICE OF THE PRESIDENT 4202 East Fowler Avenue Tampa, FL 33620-4401 usf.edu/president

28 UNIVERSITY OF SOUTH FLORIDA