LCC Impacts Students, Community, and Our Economy

In case you were unaware, this is a special year for Labette Community College as we celebrate our 100th anniversary. WooHoo! There were several events last fall. Our mascot, Chris the Cardinal, is visiting with Labette County schoolchildren in 13 schools throughout the month of February. It is also fun as the kids are excited and eager to be with LCC’s funny big bird, Chris the Cardinal!

I feel fortunate to work at LCC during its 100th anniversary. Our students are also fortunate to be with us during this occasion and take advantage of the many special campus activities. One particular student is named Jeremiah Voliva. He is from Phoenix, Arizona as Coach Vesta recruited him to wrestle.  When Jeremiah finished wrestling here, he was hired as an LCC recruiter and traveled to high schools, talking with high school students about his experiences as a Cardinal. He also enrolled in LCC’s Emergency Medical Technician program to prepare for a career in health care.

LCC has come a long way since our humble beginnings. Dr. Rees Hughes led the way, accompanied by other Parsons supporters who worked to establish grades 13 and 14 in Parsons High School. We have since developed into our existing comprehensive community college. Unlike our present school birthday celebrations, it is not all fun and games here at LCC. Many people, like Jeremiah, work hard to recruit and support our students. Faculty and staff do their best to support our mission to provide quality learning opportunities in a supportive environment.

Their work supports LCC’s ability to create value for our students, taxpayers, and society. In particular, LCC promotes economic growth in the regional economy and generates a positive return on investment for students, taxpayers, and society. Let’s take a look at a recent annual snapshot of the “LCC Effect” of educating students.

The information was taken from July 2021 to June 2022, as this was the most recent, full-year data available. LCC served 2,031 students. LCC employed 109 full-time and 91 part-time faculty and staff during this time; 95% of our employees lived in the southeast Kansas and southwest Missouri region.

LCC serves as an employer and buyer of goods and services for its day-to-day and capital improvement activities. We attract students from outside of our area whose expenditures benefit regional vendors. When exploring each of the economic impacts, let us consider the hypothetical question of how economic activity would change in the region if LCC and all its alumni did not exist in fiscal year (FY) 2021-2022.

During the analysis year, LCC’s day-to-day operations expenditures added $11.5 million in income to the region. This impact captures new economic activity created in the regional economy solely attributable to the operations of LCC.  Much of this was spent in the region for groceries, mortgages, rent payments, dining out, other household expenses, and LCC’s day-to-day expenses related to general operations, supplies, and professional services. This is equivalent to supporting 216 full-time jobs in the region.

LCC invests in capital projects each year to maintain and repair facilities and create additional capacities. While the amount varies from year to year, these quick infusions of income and jobs have a substantial impact on the regional economy and beyond. In FY 2021-2022, LCC’s capital spending generated $1.3 million in added income, which is equivalent to supporting 24 jobs.

Several students who attended LCC in FY 2021-2022 originated from outside the region. Some of these students, like Jeremiah, relocated to the LCC region to attend. Of course, Jeremiah would never have come to this region if the college did not exist. I asked Jeremiah what he might be doing if LCC had not been an option. He said he would be working as a construction worker in the Phoenix area.

In addition, some in-region (retained) students would have left the LCC region if not for the existence of LCC. These students spent money on groceries, transportation, and other household expenses. This spending generated $1.5 million in added income for the regional economy, which supported 33 jobs in 2021-2022.

The education LCC provides for regional residents has the greatest impact. Since LCC was established, students have studied at LCC and entered the regional workforce with excellent knowledge and new skills. Today, thousands of former LCC students are employed in the LCC region. As a result of their education from LCC, the students receive higher earnings and increase the productivity of the businesses that employ them. In 2021-2022, LCC alumni generated $118.2 million in added income for the regional economy. LCC alumni spending alone supported 1,557 jobs.

In short, LCC operation expenditures; capital spending impacts; the student spending impact; and the alumni impact, LCC added $132.6 million in income to the LCC region during 2021-22. This was equal to approximately 0.6% of the total gross regional product (GRP) of the LCC region. This supported 1,830 regional jobs including health care and social assistance, retail trade, manufacturing, government, non-education, and construction sectors. If LCC did not exist, these impacts would not have been realized.

Impacts created by LCC in FY 2021-22
$11.5M	Operations spending impact
$1.3M	Capital spending impact
$1.5M	Student spending impact
$118.2M	Alumni Impact
$132.6M	Total economic impact
1,830	Jobs supported

A public community college, like LCC, has been an investment by generations of local supporters and helps southeast Kansas flourish. So, let’s look at the investment results from the perspective of LCC students, taxpayers, and the greater Kansas society.

As previously mentioned, LCC served 2,031 students in 2021-22. To attend college, students pay for or receive grants or scholarships for tuition, fees, books, and supplies. Some also took out loans and will incur interest on those loans. In addition, some students gave up income they would have otherwise earned had they chosen to work instead of attending LCC. The total investment made by LCC’s students in FY 2021-22 amounted to a present value of $5.9 million.

In return for their investment, LCC’s students, including Jeremiah, will receive higher future earnings, which will continue to grow throughout their working lives. For instance, the average LCC associate degree graduate from FY 2021-22 will see annual earnings, which are $18,300 higher than a person with a high school diploma or equivalent working in Kansas. Over a working lifetime, the benefits of an associate degree compared to a high school diploma will amount to an undiscounted value of $823,500 in higher earnings per graduate. The present value of the cumulative higher future earnings that LCC’s FY 2021-22 students will receive over their working careers is $80.9 million.

LCC students’ benefit-cost ratio is 13.7 which means for every dollar students invest in an LCC degree, they will receive a cumulative value of $13.70 in higher future earnings. Simply put, there is no better investment students can make than on their own college degree. I am happy to report that Jeremiah was successful in his studies and will graduate during LCC’s upcoming spring commencement. As an LCC graduate, Jeremiah will earn an average annual internal rate of return of 32.0%, which is more than three times the U.S. stock market’s 30-year average rate of return of 9.6%.

By the way, I would recommend potential students get started in college, preferably LCC, sooner rather than later. Those who delay their college education to take a so-called, “gap year” also delay their higher future earnings by a year. Remember the old saying, “A dollar today is worth more than a dollar tomorrow.”

LCC generates more tax revenue than it receives. These benefits to taxpayers consist primarily of taxes that the state and local government will collect from the added revenue created in the state. As LCC students earn more, they will make higher tax payments, such as property taxes, throughout their working lives. Students’ employers will also make higher tax payments as they increase their output and purchases of goods and services. By the end of the FY 2021-22 students’ working lives, the state and local government will have collected a present value of $19.5 million in added taxes.

Benefits to taxpayers will also consist of savings generated by the improved lifestyles of LCC students and the corresponding reduced government services. LCC students’ education will generate savings in three main categories: 1. healthcare, 2. the justice system, and 3. income assistance.

Total taxpayer benefits amounted to $20.5 million, the present value sum of the added tax revenue and public sector savings. Taxpayer costs were $9.5 million, equal to the state and local government funding LCC received in FY 2021-22. These benefits and costs yielded a benefit-cost ratio of 2.2. This means that for every dollar of public money invested in LCC in FY 2021-22, taxpayers will receive a cumulative present value of $2.20 throughout the students’ working lives. The average annual internal rate of return for taxpayers is 4.4%, which compares favorably to other long-term investments in the public sector.

Society as a whole in Kansas benefits from the presence of LCC in two major ways. Primarily, society benefits from an increased economic base in the state. This is attributed to the added income from students’ increased lifetime earnings (added student income) and increased business output (added business income), which raise economic prosperity in Kansas.

Benefits to society also consist of the savings generated by the improved lifestyles of LCC students. Education is statistically correlated with various lifestyle changes, which create social savings. Note that the consumers avoid these costs but are distinct from the costs avoided by the taxpayers identified above. Healthcare savings include avoided medical costs associated with smoking, alcohol dependence, obesity, drug abuse, and depression. Justice system savings include avoided costs to the government and society due to less judicial activity. Income assistance savings include reduced welfare and unemployment claims.

Altogether, the social benefits of LCC equal a present value of $194.6 million. These benefits include $128.2 million in added student income, $52.8 million in added business income, $10.7 million in added revenue from college activities, and $2.9 million in social savings related to health, the justice system, and income assistance in Kansas. People in Kansas invested a present value total of $24.9 million in LCC in FY 2021-22. The cost includes all the college and student costs.

The benefit-cost ratio for society is 7.8, which is equal to the $194.6 million in benefits divided by the $24.9 million in costs. In other words, for every dollar invested in LCC, people in Kansas will receive a cumulative value of $7.80 in benefits. The benefits of this investment will occur for as long as LCC’s FY 2021-22 students remain employed in the state workforce.

In summary, Labette Community College creates value from multiple perspectives. Labette Community College enriches students’ lives by raising their lifetime earnings and helping them achieve their potential. Labette Community College benefits regional businesses by increasing consumer spending in the region and supplying a steady flow of qualified, trained workers to the workforce. The college benefits state and local taxpayers through increased tax receipts and a reduced demand for government-supported social services. Finally, Labette Community College benefits Kansas society as a whole by creating a more prosperous economy and generating a variety of savings through the improved lifestyles of students.

Student perspective	Taxpayer perspective	Social perspective
$80.9M *PV benefits	$20.5M PV benefits	$194.6 PV benefits
$5.9M PV costs	$9.5M PV costs	$24.9M PV costs
$75.0M Net PV	$1.0M Net PV	$169.7M Net PV
13.7 Benefit-cost ratio	2.2 Benefit-cost ratio	7.8 Benefit-cost ratio
32.0% Rate of return	4.4% Rate of return	**N/A Rate of return

*PV represents the present value
**The rate of return is not reported from the social perspective because the beneficiaries are not necessarily the same as the original investors.

We celebrate with Jeremiah with mixed emotions as he will be leaving LCC soon to take a position at our Parsons Fire Department. I am glad Jeremiah has decided to remain here. Jeremiah told me he likes living in Parsons because people here seem to care for his well-being. He said it is easier to develop relationships here than in Phoenix. So, Jeremiah will provide our citizens with emergency healthcare, and I, for one, am very happy for him. Jeremiah will improve and save lives here in Parsons, which could include me! So, let me be the first to extend a warm welcome to Jeremiah Voliva…who came all the way from Phoenix to study and live here!

I want to publicly thank the students for choosing LCC; I know they have other college options. I also want to thank LCC’s employees for the work and support they provide for our students.

Finally, I want to thank you, the citizens of Labette County, and for the generations of support for your community college.

We will conclude our 100th birthday year with our 100th Commencement in May. Let’s continue to work together to prepare our bright and eager schoolchildren today for the opportunity to walk across LCC’s commencement stage tomorrow.

In full transparency, LCC paid Lightcast to complete the study. Data and assumptions used in the study are based on several sources, including the FY 2021-22 academic and financial reports from LCC and the Kansas Board of Regents, industry, and employment data from the U.S. Bureau of Labor Statistics and U.S. Census Bureau, outputs of Lightcast’s Multi-Regional Social Accounting Matrix model, and a variety of studies and surveys relating education to social behavior. The study applies a conservative methodology and follows standard practice using only the most recognized indicators of economic impact and investment effectiveness. Lightcast permitted me to use their results and text from the LCC study. If you are interested in learning more about Lightcast, visit lightcast.io/solutions/education.

Written by Dr. Mark Watkins