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North Central Michigan College

Economic Impact Report

North Central Michigan College creates a significant positive impact on the business communities in Charlevoix, Cheboygan, Emmet and Otsego counties, where we generate a return on investment to our major stakeholder groups — students, taxpayers and society.

Campus pic in EIS section

In the analysis year, fiscal year (FY) 2018-19, NCMC served approximately 3,389 credit and 886 non-credit students. 

Report Results

This study, conducted by EMSI, uses a two-pronged approach that involves an economic impact analysis and an investment analysis and calculates the benefits received by each of these groups.


Economic Impact Analysis

Impacts on the Four-County Region economy are reported in the economic impact analysis and are measured in terms of added income.

IMPACT ADDED INCOME JOBS SUPPORTED
Operations Spending Impact $11.8 million 326
Construction Spending Impact $139 thousand 52
Student Spending Impact $685 thousand 15
Alumni Impact $61.6 million 1,031
TOTAL IMPACT $74.2 million 1,376

 

NCMC adds economic value to the Four-County Region as an employer of regional residents and a large-scale buyer of goods and services. In FY 2018-19, the college employed 311 full-time and part-time faculty and staff, 89% of whom lived in the Four-County Region. Total payroll at NCMC was $10.9 million, much of which was spent in the region for groceries, mortgage and rent payments, dining out, and other household expenses. In addition, the college spent $6.7 million on day-to-day expenses related to facilities, supplies, and professional services.

NCMC invests in construction each year to maintain its facilities, create additional capacities, and meet its growing educational demands. While the amount varies from year to year, these quick infusions of income and jobs have a substantial impact on the regional economy. In FY 2018-19, NCMC’s construction spending generated $139.2 thousand in added income, which is equivalent to supporting three jobs. Over the course of the $7.4 million Administration/Classroom Renovation Project, NCMC’s construction spending will generate $2.3 million in added labor income which is the equivalent to supporting 52 jobs.

Around 15% of students attending NCMC originated from outside the region in FY 2018-19, and approximately 152 of these students relocated to the Four-County Region to attend NCMC. These students may not have come to the region if the college did not exist. In addition, an estimated 287 of in-region students, referred to as retained students, would have left the Four-County Region if not for the existence of NCMC. While attending the college, these relocated and retained students spent money on groceries, accommodation, transportation, and other household expenses. This spending generated $684.5 thousand in added income for the regional economy in FY 2018-19, which supported 15 jobs in the Four-County Region. Dual credit students alone generated $157 thousand in added income.

The education and training NCMC provides for regional residents has the greatest impact. Since its establishment, students have studied at NCMC and entered the regional workforce with greater knowledge and new skills. Today, thousands of former NCMC students are employed in the Four-County Region. As a result of their NCMC educations, the students receive higher earnings and increase the productivity of the businesses that employ them. In FY 2018-19, NCMC alumni generated $61.6 million in added income for the regional economy, which is equivalent to supporting 1,031 jobs.

NCMC added $74.2 million in income to the Four-County Region economy during the analysis year, equal to the sum of the operations and construction spending impacts, the student spending impact, and the alumni impact. For context, the $74.2 million impact was equal to approximately 1.5% of the total gross regional product (GRP) of the Four-County Region.

 

Investment Analysis

The returns on investment to students, taxpayers, and society in Michigan are reported under the investment analysis.

PERSPECTIVE

BENEFIT-COST RATIO

RATE OF RETURN

Student 4.1 17.7%
Taxpayer 1.8 5.5%
Social 7.0 N/A

 

For every dollar students invest in NCMC, in the form of out-of-pocket expenses and forgone time and money, they will receive a cumulative value of $4.10 in higher future earnings.
  • 17.7% - Average annual return for NCMC students
  • 9.9% - Stock market 30 year average annual return
  • 0.8% - Interest earned on savings account (National Rate Cap)

For every dollar of public money invested in NCMC in FY 2018-19, taxpayers will receive a cumulative value of $1.80 over the course of the students’ working lives.

  • NCMC generates more in tax revenue than it takes.
  • Benefits to taxpayers also consists of savings generated by the improved lifestyles of NCMC students and the corresponding reduced government services. Education is statistically correlated with a variety of lifestyle changes in the categories of: 1) healthcare, 2) crime, and 3) income assistance.
  • Altogether, the present value of the benefits associated with an NCMC education will generate $1.4 million
    in savings to state and local taxpayers.

For every dollar invested in NCMC, people in Michigan will receive a cumulative value of $7.00 in benefits.

Society as a whole in Michigan benefits from the presence of NCMC in two major ways.
  • Society benefits from an increased economic base in the state. This is attributed to higher student earnings and increased business output, which raise economic prosperity in Michigan.
  • Benefits to society also consist of the savings generated by the improved lifestyles
    of NCMC students.