Making a Difference in Massachusetts

This report describes the economic and social impacts of Boston University on the Commonwealth of Massachusetts for the fiscal year ending June 30, 2008.

As with earlier versions, this report does, to some extent, understate Boston University’s economic impact on the Commonwealth because it excludes a number of economic components for which there are no technically sound methodologies or parameters for estimating the economic impacts. For example, it excludes the spending done by visitors who attend the University’s on‐campus events (e.g., Commencement, Alumni Weekend, athletic and cultural events, and reunion programs), and the impact on the regional economy of the business partnerships arranged through the Photonics Center and the Fraunhofer Center for Manufacturing Innovation. It also excludes the economic impact of Boston University’s Technology Development office, which provides venture capital funding to support new and growing companies in health care and information technology. Further, it does not account for the extent to which the University’s out‐of‐state expenditures impact the Massachusetts economy.

The report uses the latest available economic and employment multipliers from the Department of Commerce in the calculations for the City of Boston, the Boston Metropolitan Area, and the remainder of the Commonwealth. The role of economic multipliers in deriving levels of indirect spending is described in Research Methodology, along with several key aspects of the methodology that should assist the reader in understanding both the data and how the economic impact numbers were produced. The methodologies and quantitative techniques used to produce the economic impact numbers reported herein are consistent, reliable, technically sound, and fully justifiable.

The basic employee, student, financial, and programmatic data used in this report were provided by Boston University’s Institutional Research office, the Office of the Comptroller, Media Relations, Human Resources, Auxiliary Services, and BU Sourcing & Procurement. An independent consultant (Susan Forti Associates) employed by the University computed the economic and employment impacts using appropriate quantitative techniques.

Questions about this report should be addressed to: Colin Riley, Director of Media Relations, Boston University Media Relations, 595 Commonwealth Avenue West, Boston, MA 02215; criley@bu.edu or 617‐353‐5386.

Highlights

Over the past 165 years, Boston University has been a leader in higher education. It has been and continues to be a major resource to the City of Boston, the communities in the Boston Metropolitan Area, and the Commonwealth of Massachusetts. This report describes Boston University’s economic impact on the region and the University’s programs and services that contribute positively to the quality of life in the region. It documents how local economies and citizens benefit from a combination of all Boston University spending (including the spending of students and their out‐of‐state visitors); the employment opportunities that result from University spending; and the many cultural, educational, and social services that are offered by University faculty, staff, and students.

Boston University’s economic impact on the Commonwealth of Massachusetts totaled more than $3.8 billion in FY‐2008, and the University accounted for a total of 43,809 jobs in the Commonwealth. The University directly employed 25,828 individuals who lived in Massachusetts, and an additional 17,981 jobs resulted from University spending. Overall, Boston University is the fourth-largest employer in the City of Boston and is among the 25 largest employers in the state. The following exhibit summarizes the economic and employment impacts by region.

Table 1: Making a Difference in Massachusetts
Overview of Boston University’s FY‐2008 Economic and Employment Impacts
City of Boston Boston Metropolitan Area Commonwealth of Massachusetts
Boston University’s Direct Spending for Employee Salaries and Benefits and the
Purchase of Goods and Services
$486,415,452 $1,275,009,208 $1,339,897,856
Direct Spending by Boston University Students and Their Out‐of‐State Visitors $248,876,822 $378,294,592 $383,886,085
Additional Spending Created by Boston University’s Spending and the Spending by Boston University Students and Their Out‐of‐State Visitors $428,673,017 $1,823,423,719 $2,129,867,653
TOTAL ECONOMIC IMPACT $1,163,965,291 $3,476,727,519 $3,853,651,594
TOTAL EMPLOYMENT IMPACT 14,578 JOBS 39,723 JOBS 43,809 JOBS

Included in the direct spending reported in Table 1 are numerous payments and services that Boston University provides directly to local communities. Although most property owned by the University is legally exempt from real estate taxes, Boston University has paid more than $54.2 million in real estate property taxes and linkage payments to the City of Boston since FY‐1981. The Boston University police force provides around‐the‐clock coverage of both the Charles River and Medical Center campuses and provides back‐up assistance to the Boston, Brookline, Cambridge, and State Police.

At an annual cost of more than $1.3 million, the University provides rubbish removal and daily care of sidewalks, streets, and MBTA tracks. The care consists of repairs, cleaning, snow removal, and planting shrubbery on public property. All of the University’s rubbish removal is done by private contractors at the University’s expense. These efforts greatly reduce the University’s demand on municipal services that Boston and Brookline would otherwise have to fund themselves.

Boston University also annually awards approximately 40 four‐year, full‐tuition scholarships to graduates of Boston’s public high schools. Since FY‐1973, the University has offered more than $125 million in scholarships through this Boston Scholars Program. Through the Medeiros Scholarships, the University has offered more than $28 million in scholarships since FY‐1987 to graduates of the archdiocesan schools in Greater Boston. The University awards four‐year scholarships to outstanding graduates of Chelsea High School, Brookline High School, and Roxbury Community College. Boston public school teachers and Boston city employees are also eligible for scholarships to graduate programs at Boston University.

Boston University’s economic impact far exceeds the figures reported above because important categories of expenditures could not be quantified and allocated by region. For example, we could not quantify expenditures by visitors that the University attracts to Boston each year for on-campus events such as Commencement, Alumni Weekend, athletic and cultural events, and reunion programs. The dollar value of the expenditures of visitors not included in this report is large, and the money flows directly into the local economy — creating jobs for local residents and adding economic vitality to the community.

Also excluded from the above figures are the contributions made to the local economy by the Huntington Theatre Company, a professional company in residence at Boston University. This organization has operating expenditures of nearly $13.7 million and ticket sales totaling nearly $5.4 million by 131,807 patrons. Without the support that Boston University provides to the Company, it is likely that it would either be forced to relocate or cease to exist.

Boston University enjoys an outstanding international reputation as a center of education and research programs. Of equal importance to the economic and employment benefits is the University’s positive social and cultural impact on the local region. Among the numerous programs and services that Boston University offers to local communities are: the Boston University/Chelsea Partnership; programs and services for the elderly and people with disabilities; scholarships to students from Boston, Brookline, and other communities across the Commonwealth; the University-owned WBUR‐FM radio station; neighborhood health centers; and free use of athletic facilities for high school competitions and the Special Olympics.

Boston University is proud of its commitment to the community — a commitment to “Making a Difference in Massachusetts.