About Montana Tech
Estimated Economic Impact | January 2014
Montana Tech continues to be recognized among America’s best values in undergraduate education.
Montana Tech possesses an internationally esteemed, century-old tradition of excellence in higher education. Besides meeting its vision of being a leader for undergraduate and graduate education and research in the Pacific Northwest in engineering, science, energy, health, information sciences, and technology, Montana Tech provides a significant economic impact to both the state and local economy.
The direct impacts from Montana Tech’s staffing and payroll, student spending, research and grants, and capital and operating outlays provide additional indirect impacts to the overall economy. The benefits and additional earnings of an education from MT Tech to the student also provide additional benefits to the overall economy over the assumed 30-40 year work-life.
Between 2009 and 2014, enrollment has increased over 21.7% to 2,923 in 2014. Of the total enrollment, 1,060 or 36% are enrolled in the engineering fields. Staffing levels have increased 20% since 2009.
As of 2014, MT Tech employed 526 full-time equivalent workers. This provides annual payroll of $26.6 million and benefits of $9.2M, for a total loaded labor of $35.8M. This averages $68,055 per full-time equivalent. The direct employment and earnings provides additional indirect jobs and earnings in the local and state economy. Based on the RIMS employment multiplier, each job in the college education area provides for an estimated 1.6 addition indirect jobs in support and services industries. Thus, the 526 full-time positions support an additional 841 jobs in the derivative industries. With an average annual wage in Silver Bow County in the services sector at $31,815, these 841 additional jobs provide $26.8 million of additional earnings. Table 1 illustrates the direct and indirect impact of the employment and earnings of MT Tech’s faculty and staff.
Students at MT Tech provide benefits to the state and local economy. Of the 2,923 students in 2014, 582 are out-of-state students. It is estimated that these out-of-state students spend conservatively $1,050/month for lodging, food, apparel, entertainment, and other. Over the course of the school year, these students provide an additional benefit to the local economy of $5.5 million annually. Of the 2,341 total in-state students, 1,322 reside outside of Silver Bow County. Similar to the out-of-state students, these students provide benefits to the local economy through housing, meals, apparel, entertainment, and other. It is estimated that these out-of-county students would provide conservatively $900 of monthly spending. Thus, the 1,282 students would provide an estimated $10.7 million of additional spending to the local economy. Table 2 illustrates the spending impact of the out-of-state and out-of-county students.
Once Tech students graduate, and conservatively following the national average, they earn approximately $22 thousand more per year than non-graduates. In the 2012-13 academic year, MT awarded 310 bachelor degrees, 44 masters, 127 associate degrees, and 40 certificates for a total of 521 awards and 481 degrees (see table 3). The total degrees over the past three academic years averaged 460 annually. With the increased earnings from the degrees vs no degrees, and approximately 60% of graduates remaining in state, this adds approximately $9.9M of additional earnings to the overall economy, and $5.9M to Montana. Table 3 illustrates the added earnings from the college graduates.
MT Tech also spends dollars to add to and operate their facilities. Of the roughly $65 million of operating costs, approximately $2.1 million was for contracted services, which employ additional workers locally. Also, $1.3M was for supplies, $1.3 million was for utilities, and $316 thousand was for repairs and maintenance work. These select operating costs totaled approximately $5 million. On top of this, the college spends approximately $5 million per year on average since 2009 on capital upgrades. These also create additional jobs and earnings. Table 4 shows the direct impact of the operating and capital upgrades.
MT Tech is also a strong research institution. Between Federal, State, and private grants and contracts, MT Tech will receive $18.1 million in grant income in 2014 to continue to advance the research, development, and growth of the overall economy. 80% of this impact is covered in the labor and benefit costs of the employees. An estimated 20% of the research grants and contracts are for the purchase of materials, supplies and upgrades. Thus, approximately $3.6 million of the grants and contracts directly impacts the overall economy.
Overall, MT Tech has a significant impact on the overall economy. It is estimated that the impacts discussed provide roughly $98 million in overall economic spending and earnings. These then also provide an estimated $6.6 million of state taxes. Table 5 illustrates the overall estimated impact.
To the student, the quality education received from MT Tech provides benefits throughout his or her work life. The total cost of tuition and fees is approximately $7,500 per year. Excluding housing and other items that would have to be paid whether or not they attend college, this amounts to approximately $33,750 over 4.5 years of education. During the period while attending college, a student gives up the opportunity to work and generate earnings. Assuming the annual earnings of those with a high school diploma at $33,904 per year, the lost earnings over 4.5 years amounts to approximately $153 thousand. Based on increased future earnings over the graduates work-life, the nominal payback is approximately 8.7 years (4.9 for those with an engineering degree), and provides a return on investment of roughly 11.6% (20.5% for those with an engineering degree).