Presenting the Socioeconomic Benefits of

1. Coast Community College District Presenting the Socioeconomic Benefits of Orange Coast College Costa Mesa, CA

2. About the District • Three colleges • Orange Coast College (Costa Mesa) • Golden West College (Huntington Beach) • Coastline Community College (District-wide) • 60,000 students • 300 degree and certificate programs offered • Governed by locally elected Board of Trustees

3. Economic Region

4. Economic Region

5. About the Study • District, along with other OC CC’s, commissioned a study of the socioeconomic benefits of our colleges on our local region • The Economic Contribution of the Orange County Community College Districts by CCbenefits, Inc. (affiliated with AACC) • Economic impact model subjected to peer review and field-tested on over 500 different community colleges in US & Canada

6. Beginning with the Regional Analysis

7. District Operations : CCCD creates q regional income through the earnings of its faculty and staff, as well as through its own operating and capital expenditures. Total Effect: A fter a djusting for q tax payment effects, we can say that CCCD operations annually $74.9 million contribute to regional income in the local region . District Operations Spending

8. Direc t E ffect : Past students q contribute an estimated $2.4 billion worth of added income per year to the regional economy after leaving CCCD . Indirect E ffect : The estimated q multiplier effect of past student productivity in other industries increase s income by yet another $386.1 million . Past-Student Productivity Effects

9. The defined economic region q generated a total of $112.2 billion i n labor and non - labor income in FY 2004 . Of this, CCCD operations spending q and past student productivity effects accounted for $2.9 billion , or 2.6% of all regional income . Total Income in District Service Area

10. Investment Analysis Continuing with the

11. Investment Analysis Component What we measured: • Thestudent benefits due to higher earnings • A broad collection of externalsocial benefits • Medical savings • Crime savings • Welfare and unemployment savings • The return to taxpayers for their support • Broad taxpayer perspective • Narrow taxpayer perspective

12. Higher earnings = Student costs = Student Benefits This figure shows the present value of increased future earnings as a direct result of the students’ education. Student costs consist of the tuition paid by the students and, most importantly, the opportunity cost of time (earnings foregone).

13. Higher earnings = Student costs = Benefit/Cost Ratio: Student Benefits Benefit/Cost Ratio: The ratio of benefits over costs. A 1.5 ratio, for example, means that every dollar invested will return a cumulative $1.50 to the investor over the time period analyzed. Criterion for feasibility: The B/C ratio must be greater than or equal to 1.

14. Higher earnings = Student costs = Benefit/Cost Ratio: Rate of Return: Student Benefits Rate of Return: the average earning power of the money used over the life of the investment. A 15% rate of return, for example, means that the revenues collected over time will equal the costs, plus generate a 15% return. Criterion for feasibility: the rate of return must exceed the returns from alternative uses of the same money.

15. Higher earnings = Student costs = Benefit/Cost Ratio: Rate of Return: Payback Period: Student Benefits Payback Period: This is the length of time needed from the beginning of the investment before the cumulative future revenues return all of the investments made.

16. Achieving an A ssociate Degree from q CCCD will increase earnings to $40,438 per year, or 35.3% more than the average high school graduate. An A ssociate Degree graduate will q earn $378,500 more than someone with a high school diploma or GED over his or her futu re career. Lifetime earnings will increase $4.95 q for every dollar invested (tuition, fees, books, and foregone earnings) . Student Benefits Some Key Findings

17. Aggregate. Medical Savings Crime Savings Welfare/Unemployment Savings Total Social Benefits The medical, crime and welfare/unemployment savings are avoided costs, i.e., the reduced burdens on employers and taxpayers. These external social benefits are generated annually as the education level of the workforce increases.

18. Benefit/Cost Ratio: Return to Taxpayers Broad Taxpayer Perspective Taxpayers Costs = State Appropriations + Property Taxes Taxpayer Benefits =Higher Earnings + Social Benefits The broad perspective: State taxpayers invest, but beneficiaries are widely dispersed (students, business community, society). We count all of the benefits regardless of to whom they accrue.

19. Benefit/Cost Ratio: Rate of Return: Payback Period: Return to Taxpayers Narrow Taxpayer Perspective Taxpayers Costs = State Appropriations + Property Taxes Taxpayer Benefits =More Taxes Collected + Social Benefits

20. What does all this mean?

21. The CCCD r egional economy is measurably stronger Taxpayers in the State of California are measurably better off The CCCD s tudents are measurably better off To Summarize… • IT PAY$ BACK: • IT PAY$ TO INVEST: • IT PAY$ TO LEARN:

22. To Summarize… • ECONOMY For every unit earned, the state and local community saves $20/year • TAXPAYERS For every dollar invested in our colleges, the public will receive $17 back over the next 36 years • STUDENTS For every unit earned, the state and local community saves $20/year