U. states impact of $2.5 billion locally

The University "delivers a one-two punch" of $2.5 billion to the state's economy, according to a report released yesterday, just one week before the governor announces whether he intends to cut state appropriations. The independent study, which began in fall 1990, examines the University's economic role on a city, regional and state level and will be distributed to Philadelphia leaders and Harrisburg legislators, administrators said yesterday. Administrators said they were pleased to discover the University had such a large impact on the region's and state's financial well-being. "[The study] is a little bit sobering to us," Executive Vice President Marna Whittington said yesterday. The audit, which studies the 1990 fiscal year, generated a few revealing statistics, including a determination that students have $16 million invested in local banks. The study also showed that every million dollars invested in the University creates 50 jobs. The boxing-glove logo splashed across the report may bode for upcoming struggles. Not only might the University lose state funding due to the state's own worsening fiscal picture, but the city may impose heavy non-tax payments for basic services. Whittington also said yesterday she can accept paying user fees on water and trash dumping, as any normal consumer would, but does not agree with paying set amounts that cannot be attributable to a service. "As a University we should not get a discount on user fees," Whittington said. "We should pay what the consumer is paying . . . But I do oppose payment in lieu of taxes." The University is currently exempt from paying user fees for both its water and University-hauled trash dumped in city facilities, which amounts to less than one-half of the garbage. In addition to losing its local tax breaks, the University may also face a battle to retain all of its $37 million in state funding. Last year, Governor Robert Casey proposed slashing the funding nearly in half. After heavy lobbying by the University, it received the same amount of money as the year previously. Whittington said the audit, conducted by Coopers and Lybrand, was not designed to generate numbers displaying the University in a positive light, but to produce accurate data. The $2.5 billion figure is determined by what economists call the "ripple effect." It is calculated by taking the amount the University spends and multiplying it by a factor that accounts for multiple spendings of the money. "In other words if we pay a construction company, they pay their workers who then shop at a local grocery store," Associate Treasurer Bob Helfman said. "It trickles down." The University has nearly 20,000 employees, while student and visitor economic activity generates an additional 24,000 "spin-off" jobs in Pennsylvania, the report also concluded. The report also explains how groups such as employees, visitors, students and alumni "pump up" the state and city economy. The University's faculty and staff spend nearly $280 million in Pennsylvania, $190 million of which is spent in Philadelphia alone, according to Coopers and Lybrand. Full-time students spend $72 million annually in Pennsylvania, the report also states. The survey also found the University attracts more than 277,000 out-of-town visitors each year who spend nearly $25 million. The report also concluded that 630 businesses headquartered in the Commonwealth were founded by University alumni.

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