Wisconsin’s technical colleges have an extremely significant impact on the state economy according to a recent report by the Wisconsin Taxpayers Alliance (WISTAX). The report – Growing Wisconsin’s Economy: The Economic Impact of Wisconsin’s Technical Colleges – indicates the 16 technical colleges collectively generated $6.9 billion in economic activity in 2005-06. The figure represents approximately 3.2% of the state’s total economic output.

The college’s economic impact is generated through both institutional spending and through economic benefits that accrue to technical college graduates. In 2005-06, the technical colleges spent roughly $1.0 billion on in-state products and services. This direct spending yields additional economic activity. For example, employees of the colleges spent their wages, creating jobs for other state residents. Similarly, the purchase of goods and services by the college help produce income and create jobs. As this spending filters through the economy, it generates even more economic activity.

In sum, WISTAX estimates this so-called “multiplier effect” is responsible for $1.8 billion in additional economic activity, bringing to $2.8 million the total output generated by the colleges’ direct spending.

According to WISTAX, the colleges also produce economic activity through the students they educate. Associate degree holders earn more than those with high school diplomas. The additional earnings of WTCS students create $4.1 billion in state economic activity and generate over 24,000 jobs. The additional earnings of technical college graduates represent a return on state and local taxes dollars of nearly six times.

The WISTAX report also estimates that institutional spending by the colleges and earning gains attributable to WTCS students are responsible for $280 million in state income and sales tax. This is nearly double the state’s investment in the technical colleges.

WISTAX believes these economic impacts should be treated as “lower bounds” because earning gains from non-program students and basic education students are not included in the analysis.

The full WISTAX report can be found at http://www.wistax.org/facts/wtcs.pdf.