Memorandum
To: Wayne Swann, Director of Office of Technology Transfer, Morgan State University
From: Econsult Solutions, Inc.
Date: November 22, 2024
RE: 2024 Updated Economic Impact Study Results
Executive Summary
Morgan State University is a premier public teaching and research institution located in Baltimore, Maryland. It is well regarded for its academic rigor, cutting edge research and public service efforts. As a Historically Black College and University (HBCU), Morgan has a well-documented history of providing opportunities for African American students to excel, particularly in the engineering and science fields. It also seeks to serve a diverse student body from all backgrounds, while producing high quality graduates that are successfully prepared to serve in a global society.
In May 2018, Econsult Solutions, Inc. (ESI) completed an economic impact study for Morgan State University, which largely covered data from FY 2018. Subsequently, ESI updated these impacts in FY 2021. Morgan seeks updated economic impact figures, using more recent financial data (inclusive of FY 2024). Economic impacts were estimated for three distinct geographies: Baltimore City; the Baltimore Metropolitan Area (MSA); and Maryland. 1 Tax revenue impacts were estimated for both the City of Baltimore and State of Maryland governments.
Overall, Morgan is a significant driver of economic impact for Baltimore, the region, and the state of Maryland (Figure ES1):
• Morgan produces a $1.5 billion economic impact and directly or indirectly supports 8,200 jobs statewide each year.
• Morgan generates over $71 million in state tax revenues every year.
• Morgan has undertaken almost $268 million in capital investments over the past 6 years.
• Morgan students and visitors inject an additional $161 million a year in spending into the state. Of this amount, $150 million is due to student spending.
• Alumni living and working in Maryland earn about an additional $700 million a year due to the education and credential they received from Morgan.
1 The Baltimore MSA (Baltimore-Columbia-Towson metropolitan statistical area) includes Anne Arundel County, Baltimore City, Baltimore County, Carroll County, Harford County, Howard County and Queen Anne’s County.
RE: 2024 Updated Economic Impact Study Results
Date: November 22, 2024
ES1: Morgan State University Economic Impact Summary, FY 2024
RE: 2024 Updated Economic Impact Study Results
Date: November 22, 2024
One of Morgan's standout qualities is the scale and distinctiveness of its research initiatives. These efforts drive scientific discoveries, foster startup ventures, and address key issues critical to the state. In terms of productivity, Morgan outperforms other research universities in the state and exceeds the national average. Morgan generates invention disclosures, new patent applications, and other critical innovation outputs at a rate well above national benchmarks, demonstrating its capacity to spark significant scientific breakthroughs (Figure ES2).
ES2: Innovation Metrics, per $10 million in Research Expenditures, FY 2024
RE: 2024 Updated Economic Impact Study Results
Date: November 22, 2024
1 Impacts from University Operations
Since FY2021, the operating budget of Morgan State University has increased by approximately 46 percent, resulting in increased economic impacts. The institution's current operating budget stands at $425 million, creating substantial economic ripple effects through local procurement of goods and services, local spending of employee salaries, and support of local business activity. Through these mechanisms, the input-output model demonstrates how Morgan's direct spending generates indirect and induced economic impacts throughout the city, region, and state.
The nearly $425 million in direct operating expenditures for FY2024 results in (Figure 1.1):
• Approximately $498 million in total economic impact for Baltimore, supporting approximately 3,000 jobs with an estimated $231 in employee compensation
• An estimated $547 million in economic impact within the Baltimore MSA, supporting approximately 3,200 jobs with an estimated $246 in employee compensation
• Approximately $550 million in total impact in Maryland, supporting 3,200 jobs with $247 million in employee compensation
Figure 1.1: Annual Economic Impact from Morgan State Operations: FY2024 Updated Results
Source: IMPLAN (2022); Econsult Solutions, Inc. (2024); Morgan State University (2024)
Although Morgan is itself a tax-exempt institution, the economic impact of its operations creates significant amounts of tax revenue for the city and state government annually. The City of Baltimore does not levy sales and business taxes, so Morgan’s impact was analyzed only for income tax at the Citylevel. Annually, Morgan generates (Figure 1.2):
• $5.3 million in total income tax revenue for the City of Baltimore; and
• $13.7 million in tax revenue, including $11.6 million in personal income tax revenue, $1.4 million in sales and tax use revenue, and $0.6 million in business tax revenue for the State of Maryland.
RE: 2024 Updated Economic Impact Study Results
Date: November 22, 2024
Figure 1.2: Annual Tax Revenue Impact from Morgan Operations ($M): FY2024 Updated Results 2
Source: IMPLAN (2022); Econsult Solutions, Inc. (2024); Morgan State University (2024)
2 Impacts from Capital Improvements
Beyond regular operations, Morgan maintains an active capital investment program encompassing new construction, renovation work, and ongoing facility maintenance. These infrastructure investments yield multiple benefits, which include supporting construction and skilled trade employment; driving demand for materials, equipment, and professional services; and enhancing campus vitality and quality of life for university stakeholders. Morgan’s capital spending has created an economic impact on the local economy as Morgan hired local contractors and vendors. These expenditures have touched a wide base of wholesalers, manufacturers, and professional service providers in addition to construction companies within the state. The combination of physical improvements and community benefits helps create an engaging, dynamic environment that strengthens both the institution and its neighborhood.
Over the last six years, Morgan has spent almost $268 million on new construction, new equipment and technology, major renovations, and capital maintenance, which equates to an average of almost $45 million each year. It is typical for construction spending to be uneven over time; and so in order to account for fluctuation in spending, the direct and third-party capital investments that were made since 2019 have been annualized.
Morgan’s capital spending creates economic impact on the local economy as Morgan hires local contractors and vendors. These expenditures touch a wide base of wholesalers, manufacturers, and professional service providers, in addition to construction companies within the state. Each year, Morgan’s investments generate approximately (Figure 2.1):
• $62 million in total output, supporting 310 direct, indirect and induced jobs with $18 million in earnings within Baltimore;
• $74 million in total output, supporting 350 direct, indirect and induced jobs with $21 million in earnings within the Baltimore MSA; and
• $75 million in total output, supporting 360 direct, indirect and induced jobs with $21 million in earnings within Maryland.
2 Numbers may not sum due to rounding.
RE: 2024 Updated Economic Impact Study Results
Date: November 22, 2024
Figure 2.1: Annual Economic Impact of Morgan’s Capital Investments within Baltimore, the Baltimore MSA, and Maryland: FY2024 Updated Results 3
Source: IMPLAN (2022); Econsult Solutions, Inc. (2024); Morgan State University (2024)
The economic impact of these capital investments results in additional tax revenue generation for the City of Baltimore and the State of Maryland. This spending generates approximately (Figure 2.2):
• $400,000 in total income tax revenue for the City of Baltimore; and
• $1.8 million in total tax revenue, including $1.0 million in income tax revenue, $400,000 in sales and use tax revenue; and $400,000 in business tax revenue for the State of Maryland.
Figure 2.2: Estimated Annual Tax Revenue Impact from Morgan Capital Investments to the City of Baltimore and the State of Maryland ($M): FY2024 Updated Results
Source: IMPLAN (2022); Econsult Solutions, Inc. (2024); Morgan State University (2024)
3 Impact from Student and Visitor Spending
Morgan's presence generates substantial additional economic activity through visitor and student spending that would not otherwise occur in the area. This ancillary spending falls into two main categories. Visitor expenditures, including hotel accommodations, restaurant and dining, retail purchases, and other local services, directly stimulate economic activity at local, regional and state levels. Additionally, students contribute significant consumer spending across various categories throughout their academic tenure. This consistent injection of student purchasing power provides ongoing support to the local economy beyond the institution's direct operations. Together, these
3 Numbers may not sum due to rounding.
RE: 2024 Updated Economic Impact Study Results
Date: November 22, 2024
external spending sources represent a meaningful economic boost that is directly attributable to the institution's presence in the community.
Student expenditures form a significant component of ancillary economic activity, driven by the large student population and their extended presence in the area. While the institution's operating budget captures spending on tuition, campus housing, and meal plans, students generate substantial additional economic impact through off-campus purchases. This includes spending on dining and entertainment, transportation, and personal items, all of which inject new purchasing power into the local economy. Using information from Morgan as well as national data on projected total costs for students, ESI has developed updated ancillary spending profiles for its over 11,100 on-campus and off-campus students. The total annual ancillary spending by students is over $150 million, although not all of that spending takes place within local geographies.
Morgan also attracts approximately 103,500 visitors to Baltimore each year who bring spending into the region. But the largest category of visitors comes from visitors who attend athletic events hosted by Morgan. Like students, these visitors come from all over the region; and, therefore, their spending can be considered new to the city, region and state. These visitors spend a significant amount within the local economy each year, which helps to support employment and generate tax revenues for the city and state. In total, it is estimated that visitors to Morgan spend almost $10 million each year within the state economy (Figure 3.1).
Source: IMPLAN (2022); Econsult Solutions, Inc. (2024); Morgan State University (2024)
While this $161 million in total student and visitor spending takes place outside of Morgan, not all of it occurs within the geographies of interest (city, region and state). Some of it will occur outside of the select geographies. For instance, a significant amount of retail purchases take place online and similarly a portion of the transportation costs accrue elsewhere. Accounting for these adjustments, it is estimated that Morgan students and visitors represent about $116 million in spending within the state of Maryland each year.
Student and visitor spending at Morgan are estimated to generate (Figure 3.2):
• $85 million in total output, supporting about 470 direct, indirect and induced jobs, and $22 million in earnings within Baltimore;
RE: 2024 Updated Economic Impact Study Results
Date: November 22, 2024
• $164 million in total output, supporting more than 900 direct, indirect and induced jobs, and $37 million in earnings within the Baltimore MSA; and
• $178 million in total output, supporting over 990 direct, indirect and induced jobs, with $41 million in earnings within Maryland
Figure 3.2: Estimated Annual Economic Impact from Morgan Student and Visitor within Baltimore, the Baltimore MSA, and Maryland: FY2024 Updated Results
Source: IMPLAN (2022); Econsult Solutions, Inc. (2024); Morgan State University (2024)
The economic impact of this ancillary spending results in additional tax revenue generation for the City of Baltimore and the State of Maryland. This spending generates approximately (Figure 3.3):
• $500,000 in total income tax revenue for the City of Baltimore; and
• An estimated $4 million in total tax revenue, including $1.8 million in income tax revenue, $1.5 million in sales and use tax revenue, and $700,000 in business tax revenue for the State of Maryland.
Figure 3.3: Estimated Annual Tax Revenue Impact from Morgan Ancillary Spending to the City of Baltimore and the State of Maryland: FY2024 Updated Results
Source: IMPLAN (2022); Econsult Solutions, Inc. (2024); Morgan State University (2024)
RE: 2024 Updated Economic Impact Study Results
Date: November 22, 2024
4 Impacts from Alumni Wage Premium
Educational institutions contribute to economic growth not only through their direct operations but also through their long-term impact on graduate earning potential. While the wage premium associated with higher education is typically evaluated from a student's return-on-investment perspective, this analysis examines the broader economic benefits to the city, region, and state. By quantifying the additional earnings attributable to the institution within these geographies, we can measure the increased consumer spending power that supports local employment and economic activity.
The economic impact of enhanced earning potential extends well beyond graduation. With over 50,000 alumni worldwide, Morgan has a particularly strong presence in Maryland, the Baltimore metropolitan area, and Baltimore City. Alumni who remain in these areas contribute to economic vitality through their increased earning power and subsequent local spending. This sustained enhancement of regional earning capacity and consumer spending represents another significant channel through which the institution strengthens both the local and state economies.
To calculate wage premium, it is necessary to estimate the premium a worker with a bachelor’s degree earns over one with an associate’s degree; and the premium a worker with a master’s degree earns over one with a bachelor’s degree. The aggregate increase in earning potential within each geography can be estimated as a function of the increases in educational attainment of the workforce. Based on a combination of federal data sources, the annual wage premium attributable to the increased educational attainment for Morgan alumni is estimated to be $26,200 for a bachelor’s degree holder; and an additional $22,800 for advanced degree holders
These premiums are applied to the volume of Morgan alumni estimated to be working within each geography by degree level to arrive at an aggregate annual wage premium, which represents the additional household income generated by Morgan alumni as a result of the education and credential they received from Morgan. This aggregate annual wage premium is estimated to sum $281 million within Baltimore; $601 million within the Baltimore MSA; and $700 million in Maryland (Figure 4.1)
Source: IMPLAN (2022); Econsult Solutions, Inc. (2024); Morgan State University (2024)
RE: 2024 Updated Economic Impact Study Results
Date: November 22, 2024
While the additional earnings by Morgan alumni within the local workforce are highly consequential to those households, their impact on economic activity throughout the city, region and state occurs when it is re-circulated within the economy. This additional household income represents higher household spending which ripples through these economies, supporting local merchants, local jobs, and the local tax base. Accounting for savings rates, tax withholdings, and spending outside of the city, region and state, not all of this additional household income circulates locally. However, that income which does circulate has a multiplier effect and supports a wide range of jobs.
Each year, the estimated increase in earnings generates significant economic impacts (Figure 4.2):
• $246 million in total output, supporting approximately 1,100 direct, indirect and induced jobs, and $81 million in earnings within Baltimore;
• $607 million in total output, supporting more than 3,000 direct, indirect and induced jobs, and $186 million in earnings within the Baltimore MSA; and
• $730 million in total output, supporting over 3,600 direct, indirect and induced jobs, and $220 million in earnings within Maryland.
Figure 4.2: Estimated Annual Economic Impact from Morgan Aggregate Wage Premium within Baltimore, the Baltimore MSA, and Maryland: FY2024 Updated Results
Wage premiums attributable to degrees conferred by Morgan generate additional tax revenues for the City of Baltimore and State of Maryland. In particular, this activity translates into increased income tax revenue (due to increased earnings) and increased sales and business tax revenue (due to increased household spending). In aggregate, the economic activity attributable to wage premium effects generates an estimated $8.1 million in tax revenues within the City of Baltimore and $51.5 million in tax revenues within the State of Maryland on an annual basis (Figure 4.3)
RE: 2024 Updated Economic Impact Study Results
Date: November 22, 2024
Figure 4.3: Estimated Annual Tax Revenue Impact from Morgan Aggregate Wage Premium to the City of Baltimore and the State of Maryland Government (in $M): FY2024 Updated Results
Source: IMPLAN (2022); Econsult Solutions, Inc. (2024); Morgan State University (2024)
5 Aggregate Annual Economic Impact
Morgan State University contributes significantly to the regional and state economies through its operations, capital investments, ancillary spending by students and visitors, and the wage premium of Morgan alumni living and working in the region. It is estimated that Morgan produces $1.5 billion in economic impact to the state economy and supports about 8,100 jobs statewide. The economic impact also contributes greatly to the local and state tax bases, generating a total of over $14 million in tax revenues for the City of Baltimore and over $71 million for the State of Maryland.
While Morgan exists for educational purposes, fulfilling its mission also produces large and meaningful economic gains. Its investments circulate throughout the economy, spurring additional economic activity and generating considerable tax revenue for local and state governments. In total, Morgan State University produces an aggregate economic impact of:
• $891 million in total output, supporting a total of 4,880 direct, indirect and induced jobs, and $352 million in earnings within the city of Baltimore (Figure 5.1);
• $1.4 billion in total output, supporting a total of 7,450 direct, indirect, and induced jobs, and $490 million in earnings within the Baltimore MSA (Figure 5.2); and
• $1.5 billion in total output, supporting a total of 8,150 direct, indirect, and induced jobs, and $530 million in earnings within the state of Maryland (Figure 5.3).
RE: 2024 Updated Economic Impact Study Results
Date: November 22, 2024
Figure 5.1: Aggregate Annual Economic Impact of Morgan on the Baltimore Economy: FY2024 Updated Results
Source: IMPLAN (2022); Econsult Solutions, Inc. (2024); Morgan State University (2024)
Figure 5.2: Aggregate Annual Economic Impact of Morgan on the Baltimore MSA: FY2024 Updated Results
Source: IMPLAN (2022); Econsult Solutions, Inc. (2024); Morgan State University (2024)
Figure 5.3: Aggregate Annual Economic Impact of Morgan on the Maryland Economy: FY2024 Updated Results
Source: IMPLAN (2022); Econsult Solutions, Inc. (2024); Morgan State University (2024)