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UC Merced’s Economic Contribution to Valley Nears $650 Million

September 14, 2011
Rapid growth of newest UC campus has helped offset stagnant economy in San Joaquin Valley

The University of California, Merced, has contributed approximately $650 million to the San Joaquin Valley economy since the campus began initial operations in July 2000, the university reported today.

Statewide, the value of UC Merced’s cumulative economic contribution has amounted to $1.225 billion. Both totals reflect university expenditures through June 30, the end of the campus’ 2010-11 fiscal year.

UC Merced’s rapid growth is generating increasing economic value and business opportunity in the San Joaquin Valley and across the state at a time when many families and businesses are struggling to stay afloat,” Chancellor Dorothy Leland said. “These investments are creating jobs, increasing tax revenues, attracting capital and providing new avenues for much-needed economic growth.”

According to the campus’ Business and Financial Services unit, UC Merced has paid more than $417 million in local wages and compensation, awarded $109 million in construction contracts to local businesses and purchased $122 million in goods and services from local suppliers since July 2000. The total Valley investment of $648 million shows a growth of nearly $100 million since the end of the prior fiscal year.

Within the Valley, Fresno and Merced counties continued to be the largest beneficiaries of UC Merced’s expenditures, with total receipts to date of approximately $100 million and $60 million, respectively.

Ripple Effect Increases Value

Indirectly, UC Merced’s economic impact is even greater, according to a report released today by the University of California Office of the President. The report — which calculates each UC campus’ overall economic output by including direct and indirect impacts while also estimating the “ripple effect” as wages and other expenditures circulate through the economy — shows UC Merced’s impact at more than $230 million in the 2009-10 fiscal year alone.

The Office of the President’s formula includes all employee compensation and the total production value of all goods and services obtained from California producers, including equipment, supplies, insurance, rents, utilities, communication services, printing and others. It also includes spending by students and retirees and other indirect and “induced” output, including the aforementioned ripple effect.

UC Merced is also making an impact by way of its research operation, one of the pillars of the campus. Research expenditures — which include graduate student salaries and benefits in addition to research supplies and equipment — totaled more than $16.4 million in 2010-11, an increase of more than 16 percent from the year before. Since 2000, UC Merced’s research expenditures total more than $74 million.

During the 2010-11 fiscal year, UC Merced faculty members were awarded approximately $17.4 million in research grants and awards, which feed research expenditures. That was a decrease from $22.8 million awarded in 2008-09 and $21.9 million in 2009-10, indicative of the struggling economy and a decrease in federal funding for scientific research.

Even as funding decreases, UC Merced’s research expenditures have continued to increase every year,” said Sam Traina, vice chancellor for research. “In addition to leading to important scientific breakthroughs, discoveries and inventions, these funds also boost the local economy by way of wages paid to graduate students and other researchers, many of whom live and purchase goods and services locally.”

Impact Broadens with Continued Growth

UC Merced’s employment now totals 1,176 — including faculty and administrative staff but excluding student employees — which is up from 1,103 a year ago. Monthly payroll now totals more than $12 million.

Student enrollment this year will also hit a new high, with more than 5,000 students estimated on campus this fall. (Actual enrollment won’t be known until the fall census is completed within the next few weeks.)

Despite an extremely difficult economic environment in California, UC Merced’s development as the 10th campus in the University of California system remains solidly on track,” Leland said. “We are very pleased by the progress to date and more determined than ever to increase our economic, educational, research and cultural contributions to the Valley, the state and the world for years to come.”