Economic Contribution to Valley Surpasses Half-Billion Dollars

Campus' total statewide investments top $1.1 billion in first decade of operations;
Impact will continue to grow along with campus, student body

Quick Facts
  • UC Merced has created an economic contribution of more than $500 million to the San Joaquin Valley and more than $1.1 billion statewide since it began operations in July 2000.
  • The figures include local wages, construction contracts awarded to local businesses and goods and services purchased from local suppliers.
  • Economists estimate the actual value of UC Merced's local investments increases by two to four times as that money is circulated throughout the economy.

MERCED — The University of California, Merced's economic contribution to the San Joaquin Valley since the campus began operations in July 2000 has surpassed the $500 million mark, the university said today. Statewide, the university's total economic contribution now exceeds $1.1 billion.

"Despite one of the most difficult economic climates in decades, UC Merced continues to invest heavily in the future of the Valley," Chancellor Steve Kang said. "The university's rapid growth is creating quality jobs, stimulating secondary investments, increasing tax revenues and helping to offset recessionary declines in other sectors of the regional economy.

"We are extremely pleased to be pumping sustainable value back into the region at a time when unemployment and poverty are creating so much financial hardship for so many Valley residents."

UC Merced has paid more than $333 million in local wages, awarded $107 million in construction contracts to local businesses and purchased $111 million in goods and services from local suppliers for a total Valley investment of $551 million that increased by nearly $100 million in the past year alone. And as that money is circulated throughout the economy, a "multiplier effect" increases the actual value of UC Merced's local investments by as much two to four times, per varying economists' estimates.

Within the Valley, Fresno and Merced counties have been the largest beneficiaries of university investments. Fresno County businesses have been awarded nearly $100 million in construction and business-service contracts over the 10-year period. Merced County businesses have been awarded approximately $52 million in contracts.

Statewide, the university's investments include another $550 million in goods and services purchased and contracts awarded. The total investment of $1.1 billion represents an increase of approximately $150 million since August 2009.

The state's recently approved budget allocates $102.5 million to UC Merced for additional construction, site development, infrastructure and operating expenses for the current fiscal year. Investments made from these funds will complement other ongoing university expenditures, such as wages and benefits for faculty and staff, to help bolster total economic contributions in the coming year.

University employment also increased over the past year to a total of 1,103 — compared with 976 in August 2009 — including full-time, part-time and contract academic and administrative personnel (but excluding student employees). Monthly payroll now totals approximately $7.5 million, including gross wages and benefits.

As previously reported, student enrollment for the 2010-11 academic year surged by 28 percent over the previous year, to 4,381 students. Funding agreements with the UC Office of the President will allow a net increase of some 600 students per academic year through 2012-13, when enrollment is expected to reach more than 5,000. The university expects to top out at approximately 25,000 students within 30 years.

"UC Merced was established to increase college-going rates among Valley students, help strengthen and diversify the regional economy and begin to reverse decades of poverty and unemployment throughout the region," Kang said. "We are thrilled to be making good progress on all of these goals and look forward to having an even greater impact in the years ahead."

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