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Measuring the Impact

of Inputs   

 

BY MICHAEL L. WALDEN

The Virginia Beach City Public Schools study focused on the impact of outcomes, or results, of the institution, and as argued in the accompanying article, this is the proper focus.

However, supporters and decision makers also may be interested in the impact of inputs used by the school system. That is, how big is spending by the school system on construction and operating functions, and what broader effects does this spending have on the local economy?

These effects also can be measured, and they were measured in the Virginia Beach study in two ways. First, the effects were measured simply in terms of the raw numbers. The school district has an annual operating budget of near $700 million, most of which is spent on salaries and benefits for the more than 10,000 employees. Over the last five years, the school system also has spent more than $360 million in capital projects that have directly employed almost 3,000 workers.

But the impact on the local economy don’t stop here. Salaries and other local expenditures will be re-spent in the local economy, thereby generating new incomes and additional jobs. In economics, these are called the “multiplier effects.” However, multiplier effects are limited because there will be substantial “leakage” of dollars when purchases are made from companies located outside the region.

Still, the multiplier effects from the Virginia Beach schools were found to be substantial. Every $1 spent in the district’s operating budget resulted in another 53 cents spent in the regional economy, meaning a total spending impact of $1.53. Likewise, every job in the school district was found to be associated with an additional 0.64 regional jobs.

Similar results were found for the Virginia Beach capital budget. Every $1 spent in the system’s capital budget was associated with another 55 cents spent in the regional economy, for a total impact of $1.55. Also, every $1 million spent in the capital budget was associated with 12.6 regional jobs.  


 

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