Copyright © 2018 Albuquerque Journal
The University of New Mexico generates $3.1 billion in economic output annually – the bulk of it from operational spending, according to a new analysis released Tuesday.
But the $3.1 billion figure also includes impact of alumni in the workforce, spending by out-of-state students, and UNM’s technology transfer and economic development activities. The report’s author Kelly O’Donnell said that makes it the most “comprehensive” examination of how UNM affects the state’s economy.
Those categories accounted for a total of 24,985 jobs and $3.5 billion in annual employee compensation in fiscal year 2017, according to the report.
“UNM is absolutely vital to New Mexico’s economic growth,” O’Donnell said.
UNM President Garnett Stokes announced the numbers in the Lobo Rainforest Building at the Downtown Innovate ABQ site, calling UNM “one of the state’s most valuable assets.”
“Pretty major news,” she said of the $3.1 billion figure. “Maybe we already knew it, but now we have it quantified what the University of New Mexico – what the university for New Mexico – means for our community here and for the state.”
STC.UNM, the university’s economic development and tech transfer organization, commissioned O’Donnell, a UNM research assistant professor, to conduct the analysis using a grant from the New Mexico Gas Company.
O’Donnell said economic output is a “measure of productivity,” likening it to gross domestic product.
UNM, which has an annual budget of approximately $3 billion, spent $2.2 billion on operations in fiscal year 2017. That includes about $1.4 billion for employee pay and benefits, according to the report.
But only expenditures made in New Mexico with funds coming from outside the state count toward the economic impact figure.
Nearly half of UNM’s operational revenue ($1.1 billion) comes from beyond the state’s borders. That generates $2.1 billion in direct, indirect and induced effects, according to the report.
Most of the incoming money is tied to clinical services provided by UNM Hospital and the UNM Medical Group, where approximately 65 percent of the payments come from Medicaid or Medicare.
“That is obviously hugely beneficial” because those programs are funded mostly or entirely by the federal government, O’Donnell said.
But the incoming revenue also comes from federal grants, out-of-state students’ tuition and other sources.
In addition to the $2.1 billion in economic output from operational spending, UNM’s impact includes:
• $933 from alumni income
• $79 million from out-of-state student spending
• $56 million from technology transfer
The report noted that degrees increase career earnings, giving alumni more money to spend and pay in local and state taxes.
UNM graduates residing in New Mexico earn about $2.3 billion more every year than they would have with only a high school diploma, according to the report.
However, while UNM draws about 83 percent of its student body from New Mexico, only about 58 percent of its 184,000 living alumni have New Mexico addresses currently, indicating that many of them leave.
Stokes said it is not unusual for a state’s flagship university to see its graduates seek and find opportunities elsewhere in the country or the world, but that such losses concern many around New Mexico.
“Over and over again what I’m hearing from many different constituents is the desire to reduce the amount of brain drain, and some of that is making sure that the talent that we have in New Mexico decides to stay in New Mexico to go to school to earn a bachelor’s, master’s or doctorate or professional degree,” said Stokes, who recently completed a statewide tour that included stops in all 33 counties. “But another part of that is trying to make sure we are proving that the state has ample opportunities for those graduates to actually stay and have successful careers and lives in New Mexico.”
Other findings from the new report:
• Nonresident student spending supported 822 full and part-time jobs;
• UNM had more than $300 million in contract and grant funding in 2017, including $247.7 million from the federal government;
• STC.UNM-affiliated startup companies employed about 247 New Mexicans in 2017 and generated $32.2 million in total output.