MADISON-The University of Wisconsin System contributes $9.5 billion to the state’s economy each year, which is nearly a 10-fold return on Wisconsin’s investment in the university, according to a new study.

Presented to the Board of Regents at its meeting Thursday (Sept. 12), the economic impact study also shows that the UW System has created more than 150,000 jobs in communities across Wisconsin and generates $408 million in state tax revenues annually.

“These figures further confirm that the UW System is one of Wisconsin’s main economic engines,” said UW System President Katharine C. Lyall. “Every state dollar invested in the UW System returns $9.50 in revenues. The state’s investment in the university is worth every penny.”

The UW System’s $9.5 billion economic impact is equal to 5.5 percent of Wisconsin’s 2000 gross state product, according to the study. The operations of the UW System have created 150,699 jobs across the state-meaning 5.5 percent of Wisconsin’s employment stems from university related jobs, the study found. Income and sales tax revenue generated by the UW System’s presence in Wisconsin totals about $408 million annually, the study shows, equal to about one-third of the funding the university receives from the state.

Lyall noted that the UW System’s economic impact would rank it number 350 on the Fortune 500’s list of top performing companies.

“We hope that legislators and the public understand that higher education is one of Wisconsin’s major economic clusters,” Lyall said, adding that the UW System alone graduates 26,000 professionals a year and produces research that leads to new companies and higher-paying jobs for Wisconsin.

With the state contributing about $1 billion to the university system’s $3.3 billion budget annually, Wisconsin taxpayers are realizing a substantial return on their investment in the UW System, said David J. Ward, president of NorthStar Economics in Madison.

“That 10-fold rate of return is superior to just about any other kind of investment today,” said Ward, who is conducting the study for the UW System. “If Wisconsin wants to continue to grow in this new knowledge-based economy, a smart strategy would be more investment in educational opportunities through the UW System.”

Ward noted that the state of Wisconsin is paid back for its investment in each UW System bachelor’s degree recipient in less than 10 years through higher taxes paid by that graduate.

The $9.5 billion figure is determined by calculating the amount of in-state spending by UW System institutions, along with spending by UW employees, students and visitors. These amounts are then multiplied by an average weighted sales multiplier to arrive at the total economic contribution.

The university’s economic contribution to the state has increased in real dollars by 5% since the last study done five years ago that showed the university’s contribution to be $8.2 billion. That growth is in spite of a downturn in the economy and a series of state budget cuts to the university that have resulted in 500 fewer faculty members than the UW had at the time of the first study, said Ward.

Additional results from the UW System economic impact study will be released at Wisconsin Economic Summit III, planned for Oct. 14-16 at the Midwest Express Center in Milwaukee. The full economic impact study is expected to be completed by the end of the year.

Media Contact

Linda Weimer UW System (608) 262-0766