JALC Plays a Major Role in Region's Economy
April 7, 2017
CARTERVILLE — What is the true value of John A. Logan College to Southern Illinois?
It’s been often said — with little or no disagreement — that John A. Logan College is a major economic engine in Southern Illinois. Until now, however, no one has actually tried to understand just how big that engine is.
“The findings will surprise some people and it will absolutely blow the minds of other people,” said Economist David England, a retired associate professor of Finance at the College and who is known nationally as an active trader and investor, stock market analyst, columnist, and speaker. “I’m certain that many people drive by the College along Route 13 each and everyday and never appreciate how important it is to the local economy.”
In light of the College’s 50th anniversary, Brad McCormick, vice president for Business Services and College Facilities, decided to come up with an answer to the College’s economic importance to Southern Illinois. What he found is that over just the past 10 years alone, the College has had an estimated $3.5 billion economic impact on the region.
“This is what I mean by surprising many people,” England said. “Who would have guessed $3.5 billion? But when you start doing the math, the numbers add up. Just think about how many homes and cars and other investments this means to our area. It’s absolutely incredible. The return on investment is absolutely incredible.”
McCormick used a concept known and respected by economists called “velocity of money” to generate his determination on the College’s economic impact.
The term velocity of money refers to how fast money passes from one holder to the next through the purchase of newly produced goods or the purchase of financial assets and other items. According to economic figures, each dollar spent by the College in salaries or purchases generates an average of another $7 in economic impact.
With an average of a $50 million annual budget over the past 10 years, the College has had a $350 million annual economic impact on the region or $3.5 billion over the past 10 years.
“A majority of our annual budget dollars are spent within the region’s economy,” McCormick explained. “Community colleges are often referred to as ‘economic engines’ due to job training and the impact on the business world when people earn degrees and certificates. The simple financial contribution — the economic impact in true dollars — to the communities they serve is often overlooked.”
Coupled with diplomas and certificates earned, the College’s economic impact increases considerably. “These students — many who are residents of Southern Illinois — are earning more because of certificates and diplomas they received at the College,” said College President Dr. Ron House. “This would add considerably to the overall value of John A. Logan College. One might say that because of this, the College is priceless to our region.”
Dr. Glenn Poshard, a member of the College’s board of trustees and a member of its finance committee, agrees. “Look at what the College does for Southern Illinois. It not only plays a major role in driving our region’s economy, it improves the lives of individual people through education. Education that helps them get better jobs, earn more money, and boost self-esteem.”
The College’s economic importance is one of the major reasons Poshard spoke out recently about the state’s budget stalemate saying, “What’s going on in Springfield (failure to pass a budget) is absolutely undermining not only education, but the economy.”
The failure to pass a state budget has cost the College between $15 and $16 million over the past two years.
Dave Severin is a freshman state representative (R-Benton) who graduated from John A. Logan College in 1978. He said there is no question his degree from John A. Logan College played a major economic role in his own life and that the College continues to be a major player in the region’s overall economy.
“Wow, just look at the overall number over the past 10 years,” Severin said. “You don’t really understand how big of a role an institution like John A. Logan College plays in the region’s economy until you see the numbers.”
Severin said not only is it important to keep John A. Logan College funded for economic reasons, the region’s educational institutions must remain strong in order to keep young people from seeking education outside the state.
“We can’t have parents pushing their kids to go outside of Illinois for higher education,” Severin said. “We’ve got to get them to stay here. Many times when they leave, they don’t come back.”
Last year, John A. Logan College enrolled 48 percent of its in-district high school graduates. Recruitment officials at the College are currently working to increase that number this year.