USM Legislation

Executive Summary

In July 2001, the University System of Maryland (USM or System) commissioned the Jacob France Institute of the University of Baltimore to study the economic impact of the USM on the Maryland economy. The study examines the USM's fiscal impact on the state's economy, its contribution to workforce development, and its influence on economic development. The study finds that in each of these areas, the USM is a significant, positive force in the state's economy and will have a critical impact on the state's economic future.

The study measures the increased earnings of USM graduates and calculates the state revenues (income tax and sales tax) they generate. For example, a 1986 USM bachelor's degree recipient earned an average of $51,397 in 2000 - $26,225 more than someone with only a high school degree. The study calculates the state revenues that result from the additional earnings.

The total fiscal impact of the additional earnings of USM graduates is staggering, and far exceeds the state's cost of producing the graduates.

• The lifetime incremental earnings of the USM's 1986 and 1989 graduates will generate $1.8 billion in state revenues ($1.1 billion in discounted 2000 dollars).

• For each $1 the state invested in the USM's 1986 graduates, the state receives $1.90 (in discounted 2000 dollars).
• For each $1 the state invested in the USM's 1989 graduates, the state receives $1.50 (in discounted 2000 dollars).

The study analyzed the impact of just two graduating classes, 1986 and 1989. All USM graduates will make similar contributions to Maryland's economy.

Maryland has one of the most well educated populations in the nation, which strengthens the regional, national, and global competitiveness of Maryland businesses. As the major producer of the workforce Maryland needs in a knowledge-based economy, the USM is maintaining and improving the state's competitive edge.

In 2000, among all public and private colleges and universities in Maryland, the USM awarded:

• 100% of all graduate degrees in agriculture, architecture, library sciences, and public affairs.
• 100% of all doctoral degrees in business and communications.
• 100% of all professional degrees in law, dentistry and pharmacy.
• 65% of all bachelor's, master's, doctoral, and professional degrees.

The USM is helping to address the workforce shortage in critical areas. In 2000, of Maryland's four-year public and private institutions, the USM awarded the majority of degrees in several high-demand industries, including:

• 64% of the computer science degrees
• 56% of the engineering degrees
• 58% of the health related degrees

The USM is key to the state's economic fortunes - its resilience to economic downturns and its capacity for economic growth.

The USM's four research universities are generating new technologies, conducting basic research, and commercializing research discoveries. For example, from 1994 to 1999, a total of 14 start-up companies were formed based on technology developed at USM institutions.

In FY 1999 the USM accounted for:

• 43% of invention disclosures.
• 38% of new patent applications.
• 23% of patents issued to major Maryland universities.

In FY 1999, the USM's research and development expenditures exceeded $462 million, accounting for almost one-fourth (24%) of federally sponsored R&D expenditures in Maryland and for 22% of industry R&D expenditures.

USM member institutions are among the leading research institutions in important scientific fields vital to Maryland. For example:

• The University of Maryland, College Park is ranked 8^th nationally in total computer science R&D expenditures.
• The University of Maryland, Baltimore is ranked 20^th nationally in total medical science.

Through research, public/private partnerships, business incubators, technology transfer, and other connections to the private sector, the USM institution is intimately involved in the economic development of Maryland.

The USM is a powerful force in Maryland's economy and is central to the state's future. The USM significantly increases its students' opportunities; supplies Maryland employers with the workers needed to sustain and increase the state's competitiveness; helps new and existing businesses grow; and generates new technologies through research and development. The USM's economic impact on the State of Maryland considerably exceeds the State's investment in the System.