Illinois State an Economic Engine for McLean County

Spending by Illinois State University, its employees and its students directly contributes more than $600 million to the McLean County economy.  That spending also returns more than $10 million in tax revenues to the area. Those are the findings of an economic impact study conducted by Illinois State faculty researchers.

Illinois State employs 3,258 faculty and staff members, making it the second largest employer in McLean County.  The study, prepared by Frank Beck, director of Illinois State's Stevenson Center for Community and Economic Development, and James Payne, economics professor and interim dean of the College of Arts and Sciences, shows that Illinois State directly contributes more than $600 million to the McLean County economy through payroll expenditures for faculty, staff and student employees, general operating expenses, capital expenditures and student spending beyond tuition and fees.    

That spending has the secondary effect of supporting many local businesses.  The money spent by Illinois State and its faculty, staff and students is responsible for directly or indirectly creating more than 10,000 jobs in McLean County.  Spending by those local businesses and their employees pumps more than 250 million additional dollars into the area economy.  In simple terms, $1.42 is returned to the McLean County economy for every $1 expended by Illinois State and its faculty, staff and students.

The spending power of college age students is a big part of that economic equation.  Illinois State has an on campus enrollment of 20,762 students in undergraduate and graduate programs.  Beck and Payne took into consideration the off-campus spending by freshmen and sophomores who live in University residence halls and all local spending by upperclassman and graduate students, which includes things like apartment rental, groceries and other housekeeping expenses.  Their study measured the spending by students who come to Illinois State from hometowns outside of McLean County.

"Bloomington-Normal and McLean County benefit greatly from the money students spend here," said Beck.  "When we broke down the numbers we found that every dollar a student spends here puts an additional 48 cents back into our local economy."

As a state institution, Illinois State University has a tax exempt status, but its payroll expenditures, operating and capital expenditures and student spending generate millions of dollars in tax revenues that support local governments and schools in McLean County.  In fiscal year 2010, University spending helped return $10 million in property tax revenue and $1.8 million in sales tax revenue to the local economy. 

"More than half of the $10 million in property tax revenue comes from student spending," said Beck.  "This is an important contributor to the economic health of McLean County because the money those students are spending is coming into our area from other parts of Illinois, and from other states and nations around the world."