Morgan State Economic Impact Study

EXCELLENCE IN EDUCATION, RESEARCH, AND PUBLIC SERVICE: THE ECONOMIC & SOCIAL IMPACT OF MORGAN STATE UNIVERSITY

FINAL REPORT – May 4, 2018

FINAL REPORT SUBMITTED TO: Morgan State University 1700 East Cold Spring Lane Baltimore, MD 21251

FINAL REPORT SUBMITTED BY: Econsult Solutions, Inc. 1435 Walnut Street Philadelphia, PA 19102

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TABLE OF CONTENTS Executive Summary ........................................................................................................................ 1 1.0

Introduction ........................................................................................................................... 6 1.1 1.2 1.3 1.4

2.0

Impact Methodology ......................................................................................................... 11 2.1 2.2 2.3

3.0

Section Overview and High Level Findings ............................................................ 22 Direct Capital Investments ....................................................................................... 22 Third Party Capital Investments ............................................................................... 24 Economic Impact due to Capital Investments ..................................................... 25 Industry Distribution of Employment Impact from Capital Investments ............. 26 Tax Revenue Impact due to Direct Capital Investments..................................... 27 Why This Matters ......................................................................................................... 28

Impact from Student and Visitor Spending ..................................................................... 29 5.1 5.2 5.3 5.4 5.5 5.6 5.7

6.0

Section Overview and High Level Findings ............................................................ 16 Direct Operating Expenditures ................................................................................ 16 Economic Impact from Direct Operating Expenditures ...................................... 17 Industry Distribution of Employment Impact from Annual Operations............... 18 Tax Revenue Impact from Direct Operating Expenditures.................................. 19 Why This Matters ......................................................................................................... 20

Impact from Capital Investments ..................................................................................... 22 4.1 4.2 4.3 4.4 4.5 4.6 4.7

5.0

Time Period ................................................................................................................. 11 Geographies of Interest ............................................................................................ 11 Economic Impact Theory and Methodology ........................................................ 12

Impact from Operations .................................................................................................... 16 3.1 3.2 3.3 3.4 3.5 3.6

4.0

Purpose of Report ........................................................................................................ 6 About Morgan State University .................................................................................. 7 Morgan as an Economic Engine ............................................................................... 8 Report Overview .......................................................................................................... 9

Section Overview and High Level Findings ............................................................ 29 Estimated Aggregate Annual Student Spending ................................................. 29 Estimated Aggregate Annual Visitor Spending ..................................................... 31 Economic Impact from Student and Visitor Spending ......................................... 33 Industry Distribution of Employment Impact from Ancillary Spending ............... 34 Tax Revenue Impact from Student and Visitor Spending .................................... 35 Why This Matters ......................................................................................................... 35

Impact from Wage Premium............................................................................................. 36

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6.1 6.2 6.3 6.4 6.5 6.6 7.0

Section Overview....................................................................................................... 43 Morgan Committed to “Place” ............................................................................... 43 Community-Serving Resources ................................................................................ 45 Supporting Local Businesses ..................................................................................... 48 Why This Matters ......................................................................................................... 50

Morgan as an Innovation Hub .......................................................................................... 52 8.1 8.2 8.3 8.4 8.5

9.0

Section Overview and High Level Findings ............................................................ 36 Estimated Aggregate Annual Wage Premium ..................................................... 37 Economic Impact from Annual Wage Premium ................................................... 39 Industry Distribution of Employment Impact from Alumni Wage Premium ....... 39 Fiscal Impact from Annual Wage Premium ........................................................... 40 Why This Matters ......................................................................................................... 41

Morgan Commited to “Place” ......................................................................................... 43 7.1 7.2 7.3 7.4 7.5

8.0

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Section Overview....................................................................................................... 52 Philosophy and Practice of Innovation at Morgan .............................................. 53 Tech Transfer and Commercialization Outputs and Outcomes ........................ 57 Innovation Partnerships for the 21st Century Economy......................................... 59 Why This Matters ......................................................................................................... 62

Commitment to Economic Opportunties to Local and Diverse Populations............. 64 9.1 9.2 9.3 9.4 9.5 9.6

Section Overview....................................................................................................... 64 Local and Diverse Populations at School ............................................................... 64 Affordability and Accessibility Programs ................................................................ 67 Local and Diversity in Hiring...................................................................................... 69 Local and Diverse Procurement .............................................................................. 70 Why This Matters ......................................................................................................... 72

10.0 Conclusion ........................................................................................................................... 74 10.1 10.2 10.3

Aggregate Annual Economic Impact ............................................................... 74 Social Impact ......................................................................................................... 75 Return on Investment ............................................................................................ 76

Appendix A – Input Output Methodology in Detail ............................................................... A-1 Appendix B – Ancillary Spending.............................................................................................. A-3 Appendix C – Wage Premium .................................................................................................. A-9 Appendix D – About Econsult Solutions, Inc.......................................................................... A-15

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EXECUTIVE SUMMARY Morgan State University is the preeminent public urban research university in Maryland. Established in 1867, it provides an affordable high-quality education to 7,700 students, produces research that enriches the state, and serves as an anchor institution in Northeast Baltimore.

This report expresses these contributions in economic, community, and societal impact terms. To begin with, it is estimated that the annual impact of Morgan on the state economy is $1 billion, from its annual operations, its capital investments, the student and visitor spending it attracts, and the additional earnings potential it confers on its graduates.

But Morgan’s impact extends well beyond this economic footprint. It makes higher education accessible and affordable, and produces high-quality graduates in fields key to the state’s future competitiveness. It actively supports and engages with its local community to mutual benefit.

Notably, it produces research outcomes at a rate higher than the state and national averages, focusing on issues that matter to the state’s wellbeing and retaining innovation activity in-state.

Morgan is a state-funded institution. That investment produces an outsized return for the state.

Morgan is well-positioned to achieve its ambitious growth plans, which will produce more jobs and tax revenues in the state, while positively impacting both community and society in the process.

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Morgan makes higher education accessible and affordable, and produces high-quality graduates in fields key to the state’s future competitiveness.

The importance of Morgan’s work to an equitable society and a vibrant economy cannot be overstated. Morgan is ensuring that an increasingly valuable commodity, a college degree, is achievable to more people, thereby increasing participation in today’s knowledge-based economy.

Morgan is well known in the state as providing a high quality affordable education.

As a Historically Black College and University (HBCU), most of its students are African-American, but it also enrolls an increasing number of international students.

Over 70 percent of its student population is from Maryland, with nearly 25 percent hailing from Baltimore.

Morgan is nationally prominent for its success in graduating African-American students in a variety of degree programs, particularly in high demand and strategically important industries such as science, technology, engineering, and math (STEM). Morgan produces more technical graduates than the national average, and its alumni are more likely than graduates of other Maryland schools to be employed in STEM fields. Notably, the vast majority of Morgan alumni remain in the region, contributing talent and innovation to the state.

First and foremost, we want to ensure the continued success of our students while keeping Morgan affordable and accessible.”

Dr. David Wilson President of Morgan State University

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Morgan produces $1 billion a year in economic impact in the state of Maryland.

Morgan is a major economic engine for the city and state. It annually produces $1 billion in statewide economic impact (or almost eight dollars of impact to the state economy for every dollar invested by the State of Maryland in Morgan). About 60 percent of that economic and employment impact occurs in Baltimore.

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Morgan is an anchor institution in Northeast Baltimore, supporting and engaging with the local community for mutual benefit.

Morgan is committed to being an anchor institution in Northeast Baltimore, producing tangible social benefits to the surrounding community. Through a formal partnership called the Morgan Community Mile (MCM), Morgan has committed itself to strengthen the community it calls home. A variety of programs and efforts have developed in the areas of public health, public safety, education, economic development, entrepreneurship, and arts recreation – all in support of and in partnership with the local community.

The Office of Community Service plays an active role in inviting the community to campus, where the campus serves as a rich resource for the community. Morgan provides resources to nearby residents such as mentoring, tutoring, green space on campus, a safe environment to collaborate, and various local events. In addition, Morgan students contribute over 20,000 hours of volunteer community service each year.

President Wilson Announces Morgan Community Mile

MCM Solar Panel Initiative

Morgan also has a strong track record of supporting local businesses. Morgan is a lead partner in the Goldman Sachs 10,000 Small Business Initiative, providing business management and entrepreneurial training to help small businesses succeed, grow, and stay in Baltimore.

Bringing this program to Baltimore is great for our city and will support its continued success in producing entrepreneurs. As an anchor institution, Morgan is committed to the city’s economic growth and development. We are honored for the opportunity to participate in this important public-private partnership and work collaboratively to move Baltimore forward in meeting that goal.�

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Morgan State University Economic and Social Impact Study FINAL REPORT

Morgan’s research enhances the state’s wellbeing and its competitiveness.

Morgan’s research efforts are grounded in public service. It actively works to develop innovations that address the state’s biggest challenges.

The University supports the region’s innovation ecosystem by transferring Morgan innovations to new and existing businesses for public benefit and economic development in the city and state.

Statistics show that Morgan generates significantly more key innovation outputs and outcomes (e.g., invention disclosures, start-up companies) per research dollar than state and national averages. Thus, dollars invested in Morgan will go further in terms of producing innovation and specifically ones that are of direct societal and economic benefit to the state, its natural resources, and population centers.

INNOVATION METRICS, PER $10 MILLION IN RESEARCH EXPENDITURES Innovation is one of Morgan’s Institutional Core Values.

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1.0 INTRODUCTION 1.1

PURPOSE OF REPORT

Morgan State University (Morgan) is the preeminent public urban research university in Maryland, known for its excellence in teaching, intensive research, and effective public service.

Morgan is well-regarded for its role as an anchor institution in the City of Baltimore through its commitment to place and by engaging directly with local communities and providing economic opportunities to local residents and businesses.

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 sciences fields. It also seeks to serve a diverse student body from all racial, ethnic, socioeconomic, and academic backgrounds, while producing high quality graduates that are successfully prepared to serve in a global and interdependent society. This provision of high quality education to a diverse population is extraordinarily important to the future vitality of the state economy.

The purpose of this report is to express the unique contributions of Morgan in economic, community, and societal impact terms, and to identify and where possible quantify these impacts at a local, regional, and state level. Specifically, this report estimates the impact of Morgan’s annual operations, its capital investments, the student and visitor spending it attracts, and the additional earnings potential it confers on its graduates.

This report also highlights Morgan State University’s unique role as the preeminent public urban research university in the state of Maryland. This role, in concert with Morgan’s role as an innovation hub, has resulted in innovative research and technologies for the benefit of society through collaborative partnerships, and high-quality graduates entering the workforce in careers such as public service, business, and the STEM (science, technology, engineering, and mathematics) fields.

Through its excellent work in producing high quality graduates, Morgan produces a strong return on investment for the state. Continued investment in Morgan will enable it to achieve its ambitious growth plans, producing additional return for the state in terms of jobs and tax revenues, while positively impacting both community and society in the process.

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1.2

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ABOUT MORGAN STATE UNIVERSITY

Founded in 1867, Morgan State University is a public university located in a residential section of northeast Baltimore. It began as the Centenary Biblical Institute by the Baltimore Conference of the Methodist Episcopal Church, where the institution’s original mission was to train young men in ministry. In 1890, it was renamed Morgan College and in 1917, it moved to its present location. Morgan was once a private institution, but later became a public institution in 1939, after the State of Maryland purchased the school in response to the need to provide more opportunities for its African American citizens. In 2007, it earned the prestigious classification of a doctoral research institution by the Carnegie Foundation for the Advancement of Teaching. In 2017, Morgan officially became designated as Maryland’s preeminent public urban research university, with the responsibility of addressing the needs of residents, schools, and organizations within the Baltimore metropolitan area.

Morgan serves an increasingly diverse population of over 7,700 students and over 2,100 employees, which includes full-time faculty, part-time staff, adjunct, and staff. Morgan is committed to accessibility and affordability by offering support and serves to successfully serve students with a variety of goals and needs. Morgan offers nearly 90 academic programs in 10 different schools and colleges. It has a rigorous and comprehensive undergraduate curriculum, with a strong emphasis on the arts and sciences to prepare students for advanced study at the master’s and doctoral levels. As a Doctoral Research-Intensive University, Morgan’s graduate studies focus on having its students advance knowledge in their chosen field, and contribute to the improvement of urban communities. Graduates of Morgan State University go on to become leaders in public education, research, and service.

Today, Morgan is:  1st among traditional campuses in Maryland in the number of bachelor’s degrees awarded to African Americans 

1st among all campuses in Maryland and among the top 10 campuses nationwide in the number of doctorates awarded to African Americans



1st among Minority Serving Institutions (MSIs) nationally in the number of Fulbright Scholars graduated, and the number of Fulbright Scholarships on faculty

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Inaugurated on July 1, 2010, David Wilson, E.D., became the 12th president of Morgan State University.

Dr. Wilson’s goal is to make Morgan a leader in producing the next wave of innovators in the US. His tenure has been characterized by great gains for Morgan, which includes a revitalized campus through new construction, increasing student enrollment and retention, and increased investment in research activity in Morgan. Dr. Wilson has helped to expand and create educational opportunities for Morgan students, putting the students’ experience first. Dr. Wilson’s commitment to Morgan also includes commitment to its local community, where the Morgan Community Mile was created in 2013 to engage community stakeholders and university students, faculty, and staff in the inclusive process of community plans and projects.

1.3

MORGAN AS AN ECONOMIC ENGINE

Institutions of higher education are increasingly understood to be important parts of a region’s economic competitiveness, drivers of economic growth, and tax revenue generation. Although tax-exempt, through a commitment to academic and social missions, their size and scope make them a major economic engine for their local, regional, and state economy.

While any large-scale employer and purchaser will generate a significant volume of economic activity, all such activity is not alike. Universities are in many respects unique in their ability to enhance the economic competitiveness of regions well beyond their campus boundaries, as will be described in manifold ways throughout this report.

This report will demonstrate that Morgan is a significant economic engine at a citywide, regional, and statewide level in the following ways: 

Morgan as the preeminent public urban research university in Maryland, with a mission of education, research, and service.



Morgan as an anchor institution in Baltimore, serving as a major employer and purchaser of goods and services, both of which support additional local economic activity;



Morgan as an initiator of long term capital investments on its campuses, which represent economic opportunity for the construction industry and related sectors, and a counterbalance to the negative effects associated with the cyclical nature of those markets;

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

Morgan attracts new spending into the region through its students and visitors, and their family members; and



Morgan attracts and retains talented graduates within the local and state economy, thereby increasing the intellectual capital and household spending power within the region. Morgan produces high quality graduates, which represents a high return on investment for the state. As Morgan increases student enrollment, continued growth and return on investment for the state will be realized in the future.

1.4

REPORT OVERVIEW

The sections of this report are organized to highlight the economic and societal impacts of Morgan State University. 

Section 2: Impact Methodology addresses the scope and methodology of this analysis



Section 3: Impact from Operations reviews and quantifies the impact of Morgan’s annual operations, including employment, procurement, and the provision of educational services.



Section 4: Impact from Capital Investments reviews and quantifies the impact from Morgan’s physical investments in construction, renovation, and maintenance.



Section 5: Impact from Student and Visitor Spending describes its impact from ancillary spending (i.e. over and above Morgan’s own spending) drawn into the region and captured within the local economy.



Section 6: Impact from Wage Premium describes and estimates the impact from additional household income and spending in the local economy attributable to Morgan’s education and credentialing function and its role in cultivating a talented local workforce.



Section 7: Morgan Committed to “Place” highlights the many benefits conferred at a very local level by Morgan’s presence in Baltimore, as well as its service and engagement.



Section 8: Morgan as an Innovation Hub highlights Morgan’s role of producing an innovation ecosystem within Baltimore, and how its entrepreneurial activities and research programs benefit Baltimore and the State of Maryland.



Section 9: Commitment to Economic Opportunities for Local and Diverse Populations illustrates Morgan’s diverse student, faculty, and staff, and its commitment to diversity in hiring and procurement, as well as maintaining Morgan as both affordable and accessible for all.

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

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Section 10: concludes the report by summarizing the aggregate economic impact of Morgan State University’s annual activity. It also describes the importance of this impact on multiple geographic levels, and articulates Morgan’s return on investment for students, taxpayers, and society as a whole.

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2.0 IMPACT METHODOLOGY 2.1

TIME PERIOD

This analysis seeks to quantify the current annualized level of economic activity associated with Morgan State University. To do so, it uses the most appropriate and recent data available for each component for the calculation. Where available and appropriate, Fiscal Year 2019 data was utilized as it represents the most recently projected full fiscal year for which data were available. In some cases, however, multiple years of data are useful to establish a more appropriate baseline for metrics. For instance, construction data may fluctuate on an annual basis, so it is helpful to capture multiple years to illustrate a changing trend in the level of activity over time. These years ranged from Fiscal Year 2014 to Fiscal Year 2019.

Data utilized throughout this report are largely provided by Morgan, as well as independently checked against publicly reported sources where available.

2.2

GEOGRAPHIES OF INTEREST

Morgan’s social and economic impact is apparent at the local, regional, and statewide levels, and accordingly the analysis explores impact of three concentric geographic levels (see Figure 2.1): 

The City of Baltimore



The 7-county Baltimore region: Anne Arundel County, Carroll County, the City of Baltimore, Baltimore County, Harford County, Howard County, and Queen Anne’s County (i.e. the Baltimore-Towson Metropolitan Statistical Area)



State of Maryland

In addition to these three concentric geographic levels, fiscal (i.e., tax revenue) impacts are essential for the City of Baltimore and the State of Maryland governments, which are separate and distinct government entities.

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FIGURE 2.1 – GEOGRAPHIES OF INTEREST

Source: ArcGIS (2018), MapBox (2018)

2.3

ECONOMIC IMPACT THEORY AND METHODOLOGY

ESI uses standard input-output modeling techniques to estimate the full range of economic, employment, and labor income impact associated with the direct activity attributable to Morgan State University, and develops a custom fiscal model to translate this activity into any commensurate tax revenue impact.

INPUT-OUTPUT THEORY In an inter-connected economy, every dollar spent generates two spillover impacts: 

First, some proportion of the amount of the expenditure that goes to the purchase of goods and services gets circulated back into an economy when those goods and services are purchased from local vendors. This represents what is called the “indirect effect,” and reflects the fact that local purchases of goods and services support local vendors, who in turn create business-to-business transactions when they purchase from their own set of vendors.

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

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Second, some amount of the proportion of that expenditure that goes to labor income gets circulated back into an economy when those employees spend some of their earnings on various goods and services. This represents what is called the “induced effect,” and reflects the fact that some of those goods and services will be purchased from local vendors, further stimulating a local economy.

The role of input-output models is to determine the linkages across industries in order to model out the magnitude and composition of the spillover impacts to all industries of a dollar spent in any one industry. The total economic impact of Morgan is the sum of its own direct economic footprint, plus the indirect and induced effects generated by that direct footprint (see Figure 2.2).

INPUT, OUTPUT, AND FISCAL MODEL MECHANICS To model the impacts resulting from the direct expenditures generated by Morgan, ESI developed a customized economic impact model using the IMPLAN input/output modeling system. IMPLAN represents an industry standard approach to assess the economic and job creation impacts of economic development projects, the creation of new businesses, and public policy changes.1 Economic impacts were estimated for multiple geographies, including the City of Baltimore, the Baltimore-Towson Metropolitan Statistical Area, and the State of Maryland.

These economic impacts in turn produce one-time or ongoing increases in various tax bases, which yield temporary or permanent increases in various tax revenues. While higher education institutions are non-profit and are typically exempt from some local tax types, the economic activity and employment generated by them produces increases across a number of tax bases and therefore produces tax revenues for the jurisdictions within which they are located.

To estimate these increases, ESI has created a custom fiscal impact model to translate total economic impact into their commensurate tax revenue gains. Output from the IMPLAN model determines its impact on the relevant tax types and tax bases associated with the jurisdictions in which revenue impacts reside. These include income, sales, and business taxes at the city and state level.

IMPLAN is one of several popular choices for regional input-output modeling. Each system has its own nuances in establishing proper location coefficients. IMPLAN uses a location quotient to determine its regional purchase coefficient (RPC). This represents the proportion of demand for a good that is filled locally; this assessment helps determine the multiplier for the localized region. Additionally, IMPLAN also accounts for inter-institutional transfers (e.g. firms to households, households to the government) through its Social Account Matrix (SAM) multipliers. IMPLAN takes the multipliers and divides them into 440 industry categories in accordance to the North American Industrial Classification System (NAICS) codes.

1

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FIGURE 2.2 – ECONOMIC IMPACT METHODOLOGY

Source: IMPLAN (2015), Econsult Solutions (2018), Piktochart (2017)

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GENERATING THE COUNTERFACTUAL (“COMPARED TO WHAT?”) It is important for an economic impact study of this type to clearly define conceptually the counterfactual scenario against which the economic impact of the institution is being measured.

Different methodological approaches of which impacts are appropriately attributable to universities can yield wide variation in reported results, yet these assumptions too often remain implicit rather than explicit within the study methodology.

Broadly, economic impact reports can estimate the magnitude of either the total gross impact of an institution or its net impact. In a gross impact analysis, overall impact amounts are determined for an institution without regard to what activity would have otherwise taken place in the geography absent that institution. A net impact analysis develops a counterfactual scenario that attempts to estimate activity levels that would have occurred in place of the institution in question, and nets those activity levels out of the total institutional impact.

This report, like most standard economic impact analyses, broadly utilizes a gross impact approach. This methodology is appropriate in part because alternative development paths are largely speculative. For example, simulating alternative uses for Morgan’s campus or the alternative development of the regional economy since the founding of the institution in 1867 would produce a wide range of results that could not be reliably compared to the known activity level of Morgan. It is unknown whether the level of activity “replacing” Morgan would represent a net positive or negative for the local economy. While Morgan activity may “crowd out” activity in other sectors (particularly with respect to the physical footprint of the campus), knowledge activity also generates significant spillovers into the broader regional economy, and the human and intellectual capital effects of institutions are major business attractors.

Specifically, this analysis employs a counterfactual in which Morgan does not exist, rather than a scenario in which the identical activities are somehow transported to a different geography, or one in which other universities increase their activity levels by a commensurate amount to absorb this lost activity. Thus, the benefits to employees and students of Morgan are not understood to be simply shifted in their geographic scope, but representative of an overall increase in level of activity in the educational sector due to the existence of Morgan.2 Further, from a geographic standpoint, benefits are not confined to those residents that would have been within the geographic boundaries absent of the university, but rather reflects the role of Morgan in drawing activity into the region, which includes the importation of new students, faculty, staff, and researchers, who would likely reside and work elsewhere absent Morgan.

Note that while specific Morgan State University students, faculty, and administrators would more than likely find alternative universities absent Morgan State University, that shift could in turn “bump” students or employees from those universities to another university, and so on throughout the educational sector, until eventually a set of current students and employees would be underserved due to the overall decrease in the size and activity of the sector.

2

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3.0 IMPACT FROM OPERATIONS 3.1

SECTION OVERVIEW AND HIGH LEVEL FINDINGS

Morgan State University’s annual operations support the life-changing and world-transforming work of scholarship and service. They are also an economic driver for the city, region, and state. Morgan currently has an annual budget of $260 million; it directly employs over 2,100 people, and intends to grow significantly over the next few years. In addition to being a major regional employer, Morgan is a major purchaser of goods and services across a range of categories. This direct economic footprint has spillover impacts to suppliers and workers across a range of sectors. In the aggregate, the economic impact of Morgan’s operations on the state of Maryland is $334 million per year, supporting 2,600 full-time equivalent jobs and generating over $8 million in state tax revenues.

3.2

DIRECT OPERATING EXPENDITURES

Annual operations represent Morgan’s spending on its core functions of education and research, and public service, including a variety of community and socially oriented programs. Morgan employs over 2,100 people, and the $116 million in annual employee compensation paid by Morgan represents about half of its annual budget.

In aggregate, Morgan’s functional operating expenditures for FY 2019 is estimated to be $262 million, up 21 percent from $216 million in FY 2014. Much of that expenditure, $122 million, is devoted to compensation and benefits for the 2,100 employees of Morgan.

Approximately $98 million is spent on other operating expenses, such as goods and services. $42 million goes towards student aid, grants, and contributions. While this investment is crucial from the standpoint of the student, it does not manifest as a direct payment but rather a reduction in tuition collected by Morgan. It therefore does not represent new spending within the geographies of interest and is therefore excluded from this analysis (see Table 3.1).

It is also important to recognize that a small portion of Morgan’s operations occur outside of the City of Baltimore. At the NASA Goddard Space Flight Center in Prince George’s County, over $5 million of Morgan’s operating budget is used to support the Goddard Earth Sciences Technology and Research (GESTAR) Program. Morgan also operates the Patuxent Environmental & Aquatic Research Laboratory (PEARL) in Calvert County which makes up about $600,000 of the total operating budget. For modeling purposes 98 percent of Morgan’s

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Morgan State University Economic and Social Impact Study FINAL REPORT

operations were assumed to take place within the City of Baltimore, reflecting its non-city presence in Prince George’s County and Calvert County.

TABLE 3.1 – SUMMARY OF MORGAN STATE UNIVERSITY’S ANNUAL OPERATING EXPENDITURES Expense

Included in Model

Amount ($M)

Total Annual Operating Budget

$262

Employee Compensation

YES

$122

Purchase of Goods and Services

YES

$98

EXCLUDED FROM THE MODEL

$42

Grants & Contributions Total Annual Operating Budget (Modeled) Total Modeled within the City of Baltimore

$221 98%

$216

Source: Morgan State University (2018), Econsult Solutions (2018)

3.3

ECONOMIC IMPACT FROM DIRECT OPERATING EXPENDITURES

Direct spending by Morgan on its operations affects the regional economy, as employees spend earnings locally and as goods and services procured by Morgan represent additional economic activity and employment for local vendors. This produces economic activity and supports employment within Baltimore, the Baltimore MSA, and Maryland. At larger and larger geographies, the economic impact increases, both because of the higher direct amount of operating activity and because of the larger area in which spillover effects can occur.

The direct, indirect, and induced effects of this operating activity are estimated to generate on an annual basis (see Table 3.2): 



$302 million in total output within Baltimore, supporting 2,430 direct, indirect, and induced jobs and $144 million in earnings; $332 million in total output within the Baltimore MSA, supporting 2,580 direct, indirect, and induced jobs and $153 million in earnings;

Morgan’s operations directly or indirectly support

2,600 jobs

throughout the State of Maryland.

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

$334 million in total output within Maryland, supporting 2,590 direct, indirect, and induced jobs and $153 million in earnings; 3 TABLE 3.2 – ANNUAL ECONOMIC IMPACT OF MORGAN OPERATIONS WITHIN BALTIMORE, THE BALTIMORE MSA, AND MARYLAND4 Economic Impact

Baltimore

Baltimore MSA

Maryland

Direct Output ($M)

$215

$221

$221

$87

$111

$113

Total Output ($M)

$302

$332

$334

Employment (FTE)

2,430

2,580

2,590

Earnings ($M)

$144

$153

$153

Indirect and Induced Output ($M)

Source: Morgan State University (2018), Econsult Solutions (2018), IMPLAN (2015)

3.4

INDUSTRY DISTRIBUTION OPERATIONS

OF

EMPLOYMENT

IMPACT

FROM

ANNUAL

Morgan’s day-to-day operations affect a wide range of industries. Through the purchase of goods and services from local vendors, and the spending of labor income back into the local economy, Morgan’s activities have impacts on a variety of sectors throughout the local and state economy. While the direct impacts fall within the educational services industry, the indirect and induced impacts benefit many other sectors, and most significantly affect the retail trade, finance & insurance, transportation & warehousing, information, and construction industries.

Overall, industries besides education receive over 22 percent of the total employment impact in Maryland (see Figure 3.1).5

The direct, indirect, and induced job figures are Full-time Equivalent.

The City of Baltimore is contained entirely within the MSA and the MSA is contained within the state of Maryland. Therefore, the state figures include the MSA and Baltimore figures, and the difference represents the amount of impact occurring in the parts of the state outside the MSA and the parts of the MSA outside of Baltimore.

5 As defined by the North American Industry Classification System (NAICS) used by the Bureau of Labor Statistics (BLS) and other federal statistical agencies, the “Educational Services” sector comprises establishments that provide instruction and training (whether publicly or privately owned, degree or non-degree granting, etc.).

3 4

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FIGURE 3.1 – INDUSTRY DISTRIBUTION OF EMPLOYMENT GENERATED BY MORGAN’S OPERATIONS WITHIN MARYLAND

Source: Morgan State University (2018), Econsult Solutions (2018), Piktochart (2018)

3.5

TAX REVENUE IMPACT FROM DIRECT OPERATING EXPENDITURES

Although Morgan is a non-profit entity, the fiscal impacts generated by its activity are substantial. The operating activities increase Baltimore and Maryland’s tax bases directly by employing faculty and staff members which generates taxable income, and indirectly via spending by Morgan’s vendors and employees.

Morgan’s operations generate over

$8 million

in state tax revenues per year.

Morgan generates about $8.5 million in personal income, sales, and business income tax revenues for the State of Maryland. This includes $7.2 million in income taxes, $5.8 million of which is paid by Morgan employees. Additionally, Morgan’s operations generate $3.3 million in direct, indirect, and induced income tax revenues for the City of Baltimore (see Table 3.3).6

Besides the City of Baltimore and the State of Maryland, other jurisdictions’ tax bases are supported by Morgan’s operations.

Relative to the amounts for the City and State, these amounts are fairly small and therefore are excluded from this analysis.

6

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It is important to emphasize this aspect of Morgan’s impact on the local and state economy.

While it is itself a tax exempt entity, it is also a tax generating entity for the City of Baltimore and the State of Maryland, with the economic footprint of its annual operations (and the spillover activity supporting by them) producing an aggregate $12 million in local and state taxes.

TABLE 3.3 – ESTIMATED ANNUAL TAX REVENUE IMPACT FROM MORGAN’S OPERATIONS TO THE CITY OF BALTIMORE AND THE STATE OF MARYLAND7 Tax Type

City of Baltimore

State of Maryland

Income Tax

$3.3

$7.2

Sales & Use Tax

N/A

$0.9

Business Tax

N/A

$0.4

Total Tax Revenue

$3.3

$8.5

Source: Morgan State University (2018), Econsult Solutions (2018), IMPLAN (2015), Maryland State CAFR (2016), City of Baltimore CAFR (2017)

3.6

WHY THIS MATTERS

Morgan’s contributions to the local and state economy are as an educational institution. As such, its operating expenditures support numerous areas that impact the state economy and enrich the state’s wellbeing, such as: 

Investing in and engaging with Northeast Baltimore, serving as an anchor institution that strengthens the community around it.



Conducting high-end research that produces scientific discoveries and advances human knowledge in ways that address the state’s pressing challenges and strengthen the state’s competitiveness.



Making a high-quality education affordable and accessible to many in the state of Maryland and elsewhere, and in doing so preparing the state’s future workforce, particularly in strategically important industries.

The City of Baltimore and State of Maryland governments are separate and distinct entities, so these figures do not overlap; each represents the tax revenues generated to the respective government.

7

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However, it is also important to think of Morgan as an economic engine for the city and state.

Its annual operations produce a $334 million impact on the state economy and support almost 2,600 jobs. They also generate about $12 million in local and state tax revenues.

This impact footprint is likely to grow considerably in the years to come. President Wilson has aggressive growth ambitions, seeking to increase student enrollment to 12,000 from 7,700, or a 56 percent increase. To the extent that operations and employment head count will need to grow in response, this will mean a commensurate expansion in Morgan’s economic footprint in terms of jobs supported and tax revenues generated in the city and state.

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4.0 IMPACT FROM CAPITAL INVESTMENTS 4.1

SECTION OVERVIEW AND HIGH LEVEL FINDINGS

Capital investments made by Morgan State University represent a significant number of construction projects, which support jobs, create demand for various goods and services, and generate statewide tax revenues. These investments stimulate additional business activity and create a more vibrant community for Morgan students, staff and local residents. As Morgan continues to grow, improved investment in facilities including state-of-the art labs, classrooms, and other academic and health facilities will support economic activity throughout the city, region, and state. In the aggregate, the annual economic impact of Morgan’s capital investments within the State of Maryland is $75 million per year, supporting 400 jobs and generating about $2 million in state tax revenues.

4.2

DIRECT CAPITAL INVESTMENTS

Earl G. Graves School of Business & Management

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Since the mid-2000s, there has been a steady stream of capital investments on Morgan’s campus. 8 Over the last six years, Morgan spent $207 million on new construction, new equipment and technology, major renovation, and capital maintenance, which equates to approximately $35 million each year (see Table 4.1).9 TABLE 4.1 – ANNUAL CAPITAL INVESTMENTS MADE BY MORGAN STATE UNIVERSITY BY YEAR Fiscal Year

Capital Investments ($M) (2018$)

2014

$57

2015

$17

2016

$36

2017

$41

2018

$10

2019

$47

Six-Year Aggregate Annual Average

$207 $35

Source: Morgan State University (2018)

Some notable large-scale construction projects in recent years are: 

The new Earl G. Graves School of Business Management, which opened in August 2016. The new building is a $75 million, 6-story complex featuring a real-time capital markets stock trading center, a Center for Innovation, computer labs, classrooms, seminar rooms and a 299-capacity auditorium. As stated by Fikru Boghossian, Dean of the Business School, the building not only “serves as an attractive focal point for the campus, but it also serves as a great tool to support our outreach efforts to attract the top students and the most talented faculty.”10



The new Martin D. Jenkins Hall, a $79 million, 148,000 square foot facility, which is the new home of Morgan’s Departments of Economics, History and Geography, Psychology, Sociology, and Political Science. The new building features flexible classrooms, collaborative open spaces, an instructional design development suite, room placements that promote interdisciplinary learning, and a 170-seat auditorium. The building also has

Two major capital investments took place before 2014: The CBEIS (Center for the Built Environment and Infrastructure Studies, and the Earl S. Richardson Library.

9 All dollar amounts have been inflated to 2018 dollars for consistency. The economic impact therefore represents Morgan’s average annual impact in 2018 dollars.

10 “A business school rises on land where black students once were banned,” Baltimore Brew, November 17, 2015, https://www.baltimorebrew.com/2015/11/17/a-business-school-rises-on-land-where-black-students-once-were-banned/.

8

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a technology-rich environment, including a “maker space” with 3-D, virtual reality computers, and a next-generation network providing high-speed, wireless Internet connectivity for mobile devices and interaction with students and researchers around the globe.11 

In September 2017, Morgan recently broke ground on a new Student Services Building, the Calvin and Tina Tyler Hall. The new building is estimated to cost $88 million, and slated to be open in 2020.

It is worth noting that, in addition to preparing Morgan for future growth and success, these capital investments also produce economic impact for the city and state. These calculations are detailed in the sections that follow.

“Growth is essential to the vibrancy and the relevancy of a modern university, and Morgan must never, ever cease to grow. We must renew and upgrade our facilities. We must continue to embrace the best academic practices in the classroom. We must continue to embrace the best administrative and managerial service excellence practices throughout our campus community.”

Dr. David Wilson, President of Morgan State University

4.3

THIRD PARTY CAPITAL INVESTMENTS

In addition to Morgan’s direct capital investments, it is also important to recognize the capital investments that Morgan has played a part in making possible in the local community. Because of its presence in Baltimore and its effectiveness in attracting talented students to the neighborhood, Morgan’s role in commercial development nearby can and should be included as part of its quantifiable capital impact. By leveraging funds for local development, Morgan has helped to spur growth along the retail corridors surrounding campus.

“Morgan State University Opens New Facility for Behavioral and Social Sciences,” Morgan State University, September 14, 2017, http://news.morgan.edu/morgan-state-university-opens-new-facility-for-behavioral-and-social-sciences/.

11

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One major example of a local project initiated by Morgan is the revitalization of Northwood Shopping Plaza. Directly adjacent to campus, the former Northwood Plaza is being renovated to include Morgan’s Public safety building, a Barnes & Noble campus book store, a new grocery store, and additional shops and restaurants. The new shopping center will be called Northwood Commons. It is scheduled to open in 2020 and will cost approximately $60 million. Morgan has advocated for the development of the Northwood Commons to the Baltimore City Council, and has committed $25 million in state funding towards the cost of the project.

It is important to note that there are additional smaller projects in the vicinity of campus that may not have happened but for Morgan. Because of Morgan’s presence in the neighborhood and the density of students living nearby, new retailers and developers have moved into the area to fill the commercial demand.

In an effort to conservatively estimate all these third party capital projects that Morgan had a role in initiating, the overall economic impact includes only the Northwood Plaza renovations, and not any other projects. This adds an additional $10 million in annual capital investments to Morgan’s $35 million in direct investments.

4.4

ECONOMIC IMPACT DUE TO CAPITAL INVESTMENTS

As previously noted, Morgan’s annualized capital investment into projects within Baltimore is $35 million. These projects include hard construction costs on new on and off campus facilities, renovation and state of good repair expenses, equipment purchases, and the purchase and procurement of materials and services. These expenditures touch a wide base of wholesalers, manufacturers, and professional services providers in addition to construction companies within the city and state.

Also included in Morgan’s annual capital impact is the investment made to renovate the Northwood Plaza to the future Northwood Commons. This adds an additional $10 million in annual capital investments made within Baltimore that can be attributed to Morgan’s presence in the neighborhood. In total, Morgan’s $45 million in annual capital expenditure activity generates (see Table 4.2): 

$62 million in total annual output within Baltimore, supporting 340 direct, indirect, and induced jobs and $18 million in earnings;



$74 million in total annual output within the Baltimore MSA, supporting 390 direct, indirect, and induced jobs and $21 million in earnings;



$75 million in total annual output within Maryland, supporting 390 direct, indirect, and induced jobs and $21 million in earnings;

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TABLE 4.2 – ANNUAL ECONOMIC IMPACT OF MORGAN’S CAPITAL INVESTMENTS WITHIN BALTIMORE, THE BALTIMORE MSA, AND MARYLAND Economic Impact

Baltimore

Baltimore MSA

Maryland

Direct Output ($M)

$45

$45

$45

Indirect and Induced Output ($M)

$18

$29

$30

Total Output ($M)

$62

$74

$75

Employment (FTE)

340

390

390

Earnings ($M)

$18

$21

$21

Source: Morgan State University (2018), Econsult Solutions (2018), IMPLAN (2015)

4.5

INDUSTRY DISTRIBUTION INVESTMENTS

OF

EMPLOYMENT

IMPACT

FROM

CAPITAL

The economic impacts associated with Morgan’s capital investments spread to industries far beyond the construction sector. While the construction industry is the largest individual beneficiary from these investments, other industries including professional services, administrative services, healthcare & social assistance, retail trade, and wholesale trade business also see significant benefits from the indirect (supply chain) and induced (labor income) impacts of the capital activity.

Figure 4.1 shows the proportion of the total employment impact associated with Morgan’s capital investments that accrues in and beyond the construction industry within the state. In Maryland, approximately 38 percent of the employment supported by capital investments is in sectors outside of construction.

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FIGURE 4.1 – INDUSTRY DISTRIBUTION OF EMPLOYMENT GENERATED BY MORGAN’S CAPITAL INVESTMENT WITHIN MARYLAND

Source: Morgan State University (2017), IMPLAN (2015), Econsult Solutions (2018), Piktochart (2018)

4.6

TAX REVENUE IMPACT DUE TO DIRECT CAPITAL INVESTMENTS

Morgan’s capital investments are also a significant contributor of tax revenues to the state government. Direct capital investments help create construction jobs and support local construction companies and their suppliers, all of which generate income, sales, and business taxes to Maryland. In aggregate, direct capital investments by Morgan generate about $1.6 million in Maryland tax revenues. An additional $400,000 is paid to the City of Baltimore in direct, indirect, and induced income taxes (see Table 4.3).

TABLE 4.3 – ESTIMATED ANNUAL TAX REVENUE IMPACT FROM MORGAN CAPITAL INVESTMENTS TO THE CITY OF BALTIMORE AND THE STATE OF MARYLAND Tax Type

City of Baltimore

State of Maryland

Income Tax

$0.4

$1.0

Sales & Use Tax

N/A

$0.4

Business Tax

N/A

$0.2

Total Tax Revenue

$0.4

$1.6

Source: Morgan State University (2018), Econsult Solutions (2018), IMPLAN (2015), Maryland State CAFR (2016), City of Baltimore CAFR (2017)

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4.7

28

WHY THIS MATTERS

The purpose of undertaking capital investments is to expand and improve the physical campus setting in which Morgan does its important work of education, scholarship, and research. The true value of these expenditures then is in the role they play in making possible Morgan’s work as the state’s preeminent public urban research university and in attracting human and financial capital from all over the world. This is particularly important as Morgan seeks to continue to expand in size, productivity, and prominence under the leadership of President Wilson.

However, these investments also represent economic activity that has an immediate and outsized effect on the local and state economy, putting construction workers to work and supporting a whole host of downstream supply chain sectors. Over the past several years, this has meant almost $75 million of economic activity throughout the state, as well as about $2 million in combined tax revenues to the City of Baltimore and the State of Maryland.

Ribbon Cutting Ceremony of the Earl G. Graves School of Business & Management

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5.0 IMPACT FROM STUDENT AND VISITOR SPENDING 5.1

SECTION OVERVIEW AND HIGH LEVEL FINDINGS

Over and above its own spending on operating activities and capital investments, Morgan State University draws out-of-town spending from students and visitors that would likely not occur without its presence in Baltimore. Of the two ancillary spending types, students by far represent the largest category, due to their volume and time spent in the city. Since many of these students are not Maryland residents, their spending is net gain to the city, the MSA, and the state of Maryland.

In addition to students, there are a significant number of visitors to Morgan each year, which also brings spending into the region. These visitors come to Baltimore for a variety of reasons, including: prospective student campus visits, first year student move in, alumni events, conferences, special events, athletic events, and commencement. When they visit, they spend money in the local economy on retail, food & beverage, lodging and transportation. Like students, these visitors would not likely visit the city without the presence of Morgan. Therefore, their spending can be considered new to the city and state.

Furthermore, both students and visitors create demand in Maryland for restaurants, retail establishments, hotels, and entertainment venues. As such their expenditures in the area add to the overall health and vitality of the local and state economy, which supports jobs and sustains businesses throughout the state. In the aggregate, it is estimated that this ancillary spending is responsible for over $100 million in economic impact within Maryland, supporting approximately 660 jobs and generating $2 million in state tax revenues.

5.2

ESTIMATED AGGREGATE ANNUAL STUDENT SPENDING12

Students at Morgan not only pay tuition to Morgan, they also spend on categories like transportation, room and board, supplies and books, and entertainment. Spending that takes place off campus and does not accrue directly to Morgan is considered “ancillary” for the purpose of this analysis, and from an impact standpoint must be accounted for above and beyond student spending on tuition, lodging and other categories that accrue directly to Morgan and therefore is reflected in the operational footprint (described in Section 3). A large proportion of this ancillary spending takes place within Baltimore, and an even larger majority within Maryland. This spending is either: 

12

New to the city and state, in the case of students from outside those geographies, or

See Appendix B for additional methodology on estimates of ancillary spending.

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

Retained spending, in that local students may well have attended a university outside those geographies (taking their spending power with them) in the absence of Morgan.

Base spending data comes from both Morgan directly and the College Navigator operated by National Center for Education Statistics, which lists an approximate annual student budget for room, board, expenses, and transportation costs totaling $14,200 for on-campus students and $15,900 for off-campus and commuter students. Conservative estimates were then made for the proportion of ancillary spending not directly captured by Morgan. For example, students who live in “on-campus” apartments and houses owned by Morgan pay rent directly to Morgan and that economic impact is therefore captured within the operating budget and not included as ancillary spending. The model captures the rent paid by students who live “off-campus” within Baltimore in non-Morgan housing but does not include the rent paid by commuter students. Commuting students would likely be paying the same rent or living in the same location regardless of their enrollment at Morgan. Therefore, the rent paid by commuting students cannot be attributed to Morgan and is excluded from the calculation (see Table 5.1).

TABLE 5.1 – ANCILLARY SPENDING OF MORGAN’S STUDENTS BY STUDENT TYPE13 Per Student Ancillary Spending

Aggregate Ancillary Spending ($M)

On-campus

$4,110

$8.3

Off-campus

$15,920

$76.2

Commuters

$3,900

$3.7

Student Type

Total

$88.2 Source: Morgan State University (2018), NCES (2017), Econsult Solutions (2018)

Further, the proportion of spending that takes place in Baltimore, the Baltimore MSA, and Maryland was estimated for each spending category. This adjustment recognizes that not all spending takes place within the local geography, especially as consumer behavior has shifted, with millennials in particular increasingly shifting towards online shopping. It is estimated that Morgan’s students generate approximately $82 million in ancillary spending each year, approximately $43 million of which is captured within the Baltimore economy, $78 million of which is captured within the Baltimore MSA economy, and approximately $82 million of which is captured within the Maryland economy (see Table 5.2).

13

This includes all spending made by these students that does not go directly to Morgan.

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TABLE 5.2 – AGGREGATE ANCILLARY SPENDING OF MORGAN’S STUDENTS BY GEOGRAPHY # of Students

Spending within Baltimore ($M)

Spending within the Baltimore MSA ($M)

Spending within Maryland ($M)

On-campus

2,020

$5.1

$6.0

$6.8

Off-campus

4,787

$36.3

$69.9

$72.6

Commuters

940

$1.4

$2.4

$2.9

7,747

$42.8

$78.4

$82.3

Student Type

Total

Source: Morgan State University (2018), NCES (2017), Econsult Solutions (2018)

5.3

ESTIMATED AGGREGATE ANNUAL VISITOR SPENDING14

There is additional spending associated with the visitors to campus. Throughout the academic year and over the Morgan students and visitors add summer, Morgan attracts thousands of visitors to its another $88 million per year in campus. These visitors come from all over the country spending into Maryland’s and spend a significant amount within Baltimore each economy, of which $47 million year which helps support employment and generate tax takes place within Baltimore. revenues for the City of Baltimore and the State of Maryland. Thousands of alumni, parents, athletes, and fans come to campus for collegiate sporting events, cultural events, and programs hosted by Morgan.

To accurately estimate aggregate visitor spending, it is necessary to develop spending profiles of the various types of visitors, recognizing that not all visitors have the same economic footprint.

Based on reason for visit, duration of trip, distance traveled, event type, and visitor age, unique spending pattern behaviors were created. This visitor spending analysis accounts for the following visitor types:

14



Prospective Students include all students and families who visit Morgan’s admissions office prior to applying.



Visitors to Students include other students, who may come from out-of-town to spend a weekend in Baltimore, in addition to parents of students, who come to attend move-in day and move-out day.

See Appendix B for additional methodology on estimates of ancillary spending.

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

Commencement visitors include all family members, friends, and other students who attend the commencement ceremony.



Athletic Attendees include the spectators present at all of Morgan’s football games in addition to the spectators at the men’s and women’s basketball games.



Homecoming Weekend attendees include all alumni and students who come to campus to celebrate homecoming.

Projected spending within each category was detailed by industry, and conservative estimates were then made for the proportion of this ancillary spending taking place within Baltimore, the Baltimore MSA, and Maryland. As with the calculation of student spending, estimates reflect only ancillary spending not captured within Morgan’s operating budget, and only the portion estimated to be captured within the geographies of interest. Note also that adjustments are made to exclude student attendance at various events and attractions, since student spending is separately accounted for within this analysis (Section 5.2).

In total, approximately 72,000 visits were made to Morgan’s campus in 2017 and it is estimated that these visitors spent over $5.4 million in the state, $4.9 million within the Baltimore MSA, and nearly $4.6 million in Baltimore (see Table 5.3).

TABLE 5.3 – AGGREGATE ANNUAL SPENDING BY MORGAN VISITORS15 Attendees

Visitors Per Attendee

Spend per Visitor

Total Spend ($M)

Prospective Students

8,671

2

$39.8

$0.7

Visitors of Current Students

7,747

1

$37.5

$0.3

Commencement

2,406

2

$39.8

$0.2

Athletic Events

49,450

1

$90.4

$4.5

4,000

1

$63.4

$0.3

$81.6

$5.9

Within Baltimore ($M)

$4.6

Within the Baltimore MSA ($M)

$4.9

Within Maryland ($M)

$5.4

Category

Alumni Weekend Total

72,270

Source: Morgan State University (2018), Econsult Solutions (2018), US General Services Administration (2010)

15

Info about the Athletic Events was provided by Morgan. The remaining attendees were estimated based on industry averages.

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5.4

ECONOMIC IMPACT FROM STUDENT AND VISITOR SPENDING

Combined ancillary spending by students and visitors therefore yields about $47 million in spending within Baltimore, $83 million within the Baltimore MSA, and $88 million within Maryland. However, an adjustment needs to be made to account for the fact that some of that spending immediately leaves the region and therefore does not have a multiplier effect within the regional economy. For example, a large proportion of retail spending goes to manufacturers and wholesalers, most of which are outside the region, and so the modeling approach used in this report conservatively includes only the retail margin (i.e. the difference between the purchase price for the retailer and the sales price for the customer). Based on this adjustment, the amount of spending included in our analysis is $34 million within Baltimore, $60 million within the Baltimore MSA, and $63 million within Maryland (see Table 5.4).

TABLE 5.4 – AGGREGATE ANCILLARY SPENDING BY MORGAN STUDENTS AND VISITORS BY GEOGRAPHY Type Students Visitors Total Minus Non-Modeled Amount Modeled Amount

Spending within Baltimore ($M) $42.8

Spending within the Baltimore MSA ($M) $78.4

Spending within Maryland ($M) $82.3

$4.6

$4.9

$5.4

$47.4

$83.3

$87.7

$13.6

$22.8

$24.3

$33.8

$60.5

$63.4

Source: Morgan State University (2018), NCES (2017), Econsult Solutions (2018)

This influx of ancillary spending by students and visitors has a multiplier effect throughout the region, producing the following annual economic impacts (see Table 5.5): 

$47 million in total output within Baltimore, supporting 308 direct, indirect, and induced jobs and $12 million in earnings;



$89 million in total output within the Baltimore MSA, supporting 590 direct, indirect, and induced jobs and $20 million in earnings;



$97 million in total output within Maryland, supporting 660 direct, indirect, and induced jobs and $22 million in earnings;

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TABLE 5.5 – ESTIMATED ANNUAL ECONOMIC IMPACT FROM MORGAN STUDENT AND VISITOR WITHIN BALTIMORE, THE BALTIMORE MSA, AND MARYLAND Economic Impact

Baltimore

Baltimore MSA

Maryland

Direct Output ($M)

$34

$60

$63

Indirect and Induced Output ($M)

$13

$29

$34

Total Output ($M)

$47

$89

$97

Employment (FTE)

308

590

660

Earnings ($M)

$12

$20

$22

Source: Morgan State University (2018), IMPLAN (2017), Econsult Solutions (2018)

5.5

INDUSTRY DISTRIBUTION OF EMPLOYMENT IMPACT FROM SPENDING

ANCILLARY

The spending by students and visitors directly impacts a number of industries, and in turn creates a multiplier effect that reaches additional industries. This influx of spending into Maryland supports jobs in a wide range of sectors statewide, particularly retail, transportation & warehousing, real estate, and accommodation and food services (see Figure 5.1).

FIGURE 5.1 - INDUSTRY DISTRIBUTION OF EMPLOYMENT IMPACT OF MORGAN STUDENT AND VISITOR SPENDING WITHIN MARYLAND

Source: Morgan State University (2017), IMPLAN (2015), Econsult Solutions (2018), Piktochart (2018)

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5.6

TAX REVENUE IMPACT FROM STUDENT AND VISITOR SPENDING

Student and visitor spending also boosts various local and state tax bases, creating tax revenues for various government jurisdictions each year. It is estimated that the economic impact that results from Morgan student and visitor spending produces about $2.3 million in tax revenues for the State of Maryland’s government each year, and an additional $300,000 direct, indirect, and induced income tax for the City of Baltimore’s government (see Table 5.6).

TABLE 5.6 – ESTIMATED ANNUAL TAX REVENUE IMPACT FROM MORGAN ANCILLARY SPENDING TO THE CITY OF BALTIMORE AND THE STATE OF MARYLAND Tax Type

City of Baltimore

State of Maryland

Income Tax

$0.3

$1.0

Sales & Use Tax

N/A

$0.8

Business Tax

N/A

$0.4

Total Tax Revenue

$0.3

$2.3

Source: Morgan State University (2018), Econsult Solutions (2018), IMPLAN (2015), Maryland State CAFR (2016), City of Baltimore CAFR (2017)

5.7

WHY THIS MATTERS Over and above Morgan’s own spending on operations and capital are the spending it attracts into the region from students and from a wide range of visitors. As Morgan grows its international student program, this spending increasingly represents an importation of spending power that would not otherwise benefit the local and state economies.

Furthermore, local vendors are the biggest beneficiaries of this spending power.

Morgan State University draws in numerous Restaurants, retail establishments, and visitors from its sporting events. personal service providers are often low-margin businesses by nature, so the increased demand represented by Morgan students and visitors can mean the difference between survival and obsolescence. Hence, the purchasing power represented by the Morgan community is making possible a better volume and diversity of merchant options, which is of benefit to year-round residents. This is another aspect of Morgan’s investment in place, a theme that is further explored in Section 7.

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6.0 IMPACT FROM WAGE PREMIUM 6.1

SECTION OVERVIEW AND HIGH LEVEL FINDINGS

The previous three sections have accounted for expenditures made by Morgan State University directly (Sections 3 and 4) or by students and visitors drawn into the regional economy by Morgan (Section 5).

However, it is important to not lose sight of Morgan’s core mission, which is to educate, credential, and prepare students for a lifetime of success. This primary function, in addition to helping foster a more enlightened society, has 2016 December Commencement celebration meaningful and immediate gains for Morgan graduates and for the regional economies they participate in after graduation by increasing their productivity and earning power.

This is particularly meaningful for students and society because of Morgan’s commitment to extending educational opportunities to racial and ethnic minorities, first-generation college attendees, and low-income households. To a much higher degree than most other universities, Morgan is helping its graduates produce the higher household earnings that come from a college degree. This is a premium that they might not otherwise be able to achieve but for the access to education provided by Morgan.

Financial aid is an important factor for students in choosing which college they are going to attend. In fact, the National Student Financial Wellness Study reported that nearly 60% of all students agree that they worry about having enough money to pay for school.

The link between educational attainment and earnings power is well-established, and a wage premium associated with additional education is often conceptualized and calculated from the perspective of the student, who can compare the costs associated with various educational (or non-educational) options with the expected return. This analysis utilizes this framework to estimate the gain not to the student, but rather to the city, MSA, and state economies. Additional earnings attributable to Morgan within these geographies are estimated, and translated into additional spending power within the local economy, which supports local employment and earnings. It is estimated that the wage premium conferred on Morgan alumni produces $484 million in economic impact each year within the Maryland’s economy and generates almost $34 million in tax revenues for the State of Maryland’s government.

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ESTIMATED AGGREGATE ANNUAL WAGE PREMIUM16

Morgan alumni working in Maryland earn an aggregate

$464 million per year as a result of their Morgan degree.

Estimating the magnitude of wage premium impacts from Morgan on the volume of earnings and associated household spending within Baltimore, the Baltimore MSA, and Maryland therefore proceeds in three steps: 1.

First, we estimate the volume of Morgan alumni in the workforce,17 detailed by educational attainment level and geography;

2.

Next, we estimate the annual wage premium associated with Morgan for each of those attainment levels

3.

Finally, we combine these two calculations, multiplying the volume of alumni at each attainment level by the wage premium for that level to yield an estimate of the aggregate annual wage premium associated with Morgan.

This calculation relies primarily on data provided by Morgan, as well as government data where appropriate.

GEOGRAPHIC DISTRIBUTION OF MORGAN ALUMNI Data provided by Morgan shows that of the more than 42,400 active members in the alumni database, about 11,900 live within Baltimore, nearly 25,500 live in the Baltimore MSA, and over 29,700 live in Maryland. Of those living within the state, it is assumed that 72 percent are currently employed (as opposed to retired, unemployed, or otherwise out of the workforce).18 Applying this proportion evenly across geographies, it is estimated that approximately 30,470 Morgan alumni are currently employed, of which 8,530 live within Baltimore, 9,750 live in the Baltimore MSA outside of the city, and 3,050 live in the parts of Maryland outside of the Baltimore MSA (see Table 6.1).19

16 17

See Appendix C – Wage Premium for methodology.

Morgan’s alumni database includes all graduates who earned a degree from Morgan.

This assumption is based on the employment to population ratio reported by the US Bureau of Labor Statistics for adults 25 or older with a college degree, which was 71.9 percent as of December 2017.

18

To enhance the accuracy of the calculation in terms of its differentiation of different geographic levels, workers within the subsumed geographies are netted out of each successive calculation (i.e. Maryland reflects the remaining portion of the state outside of the Baltimore MSA). Full values for Maryland will therefore be the sum of all three columns.

19

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TABLE 6.1 – GEOGRAPHIC DISTRIBUTION OF MORGAN ALUMNI IN THE WORKFORCE Est. Total Employed Baltimore Baltimore MSA Alumni Working Alumni with Bachelor's degree 22,850 6,400 13,710 Working Alumni with Advanced degree

Maryland 15,990

7,620

2,130

4,580

5,340

Est. Total Working Alumni

30,470

8,530

18,280

21,330

Est. Total Working Alumni

Est. Total Employed Alumni 30,470

Baltimore MSA (outside of city) 9,750

Maryland (outside of MSA) 3,050

Baltimore 8,530

Source: Morgan State University (2018), Bureau of Labor Statistics (2017), Econsult Solutions (2018)

WAGE PREMIUM OF ALUMNI DEGREE LEVELS The aggregate increase in the 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 $21,000 for a bachelor’s degree over an associate’s degree and an additional $24,020 for advanced degree over a bachelor’s degree.

These premiums are applied to the volume of Morgan degree holders 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 to $186 million within Baltimore, $398 million within the Baltimore MSA, and $464 million in Maryland (see Table 6.2).

TABLE 6.2 – REGIONALLY INCLUSIVE AGGREGATE ANNUAL WAGE PREMIUM ASSOCIATED WITH MORGAN ALUMNI IN THE WORKFORCE Degree Level

Baltimore ($M)

Baltimore MSA ($M)

Maryland ($M)

Bachelor's

$134

$288

$336

Advanced

$51

$110

$128

$186

$398

$464

Total Working Alumni

Source: Morgan State University (2018), Bureau of Labor Statistics (2017), Econsult Solutions (2018)

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6.3

ECONOMIC IMPACT FROM ANNUAL WAGE PREMIUM

This additional earning potential is great for students, but it is also a huge boon to the households represented by Morgan alumni. It also benefits the local economies they are a part of, because some of that additional household income is spent at various local vendors, supporting additional economic activity and employment. Accounting for savings rates, tax withholdings, and spending outside of the city, region and state, (i.e. less than 100 percent of the increased household income is spent locally) there is still nevertheless a large amount of additional spending and spillover activity that generates the following economic impacts (see Table 6.3): 

$163 million in total output within Baltimore, supporting 910 direct, indirect, and induced jobs and $54 million in earnings;



$402 million in total output within the Baltimore MSA, supporting 2,420 direct, indirect, and induced jobs and $123 million in earnings;



$484 million in total output within Maryland, supporting 2,900 direct, indirect, and induced jobs and $146 million in earnings; TABLE 6.3 – ESTIMATED ANNUAL ECONOMIC IMPACT FROM MORGAN AGGREGATE WAGE PREMIUM WITHIN BALTIMORE, THE BALTIMORE MSA, AND MARYLAND

Impact Type

Baltimore

Baltimore MSA

Maryland

Direct Wage Premium ($M)

$186

$398

$464

Total Impact ($M)

$163

$402

$484

Employment Supported (FTE)

910

2,420

2,900

Earnings ($M)

$54

$123

$146

Source: Morgan State University (2018), Econsult Solutions (2018), IMPLAN (2015)

6.4

INDUSTRY DISTRIBUTION OF EMPLOYMENT IMPACT FROM ALUMNI WAGE PREMIUM

The portion of Morgan alumni’s additional household income that is spent back into the regional economy supports a number of industries, befitting the types of expenditures that are typically made by a household from its earned income. Hence, a high number of jobs in sectors such as

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health care, retail, and food are supported by the higher aggregate household income enjoyed by Morgan alumni (see Figure 6.1).

FIGURE 6.1 - INDUSTRY DISTRIBUTION OF EMPLOYMENT IMPACT OF MORGAN AGGREGATE WAGE PREMIUM WITHIN MARYLAND

Source: Morgan State University (2017), IMPLAN (2015), Econsult Solutions (2018), Piktochart (2018)

6.5

FISCAL IMPACT FROM ANNUAL WAGE PREMIUM

In addition to economic impacts, the City of Baltimore and the State of Maryland benefit from added taxes generated directly and indirectly from the wage premium associated with Morgan graduates. The higher wage paid to Morgan alumni represents a direct gain in terms of personal income tax, as well

The additional earnings enjoyed by alumni working in Maryland as a result of their Morgan degree results in $34 million more in tax revenues to the State of Maryland government every year.

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as indirectly from income, sales and business taxes generated by graduate spending. Each year, $21.9 million in state income taxes are paid directly by Morgan alumni, $6.8 million in state income tax is generated through the induced impacts. In addition, $3.7 million is generated in state sales tax, and $1.7 million is generated in state business taxes, totaling $34.1 million in state tax revenue impact. Furthermore, $5.4 million in direct and induced income taxes are paid to the City of Baltimore each year (see Table 6.4). In other words, there is almost $40 million more in local and state tax revenues because of the aggregate wage premium enjoyed by Morgan alumni living and working in Baltimore and Maryland.

TABLE 6.4 – ESTIMATED ANNUAL TAX REVENUE IMPACT FROM MORGAN AGGREGATE WAGE PREMIUM TO THE CITY OF BALTIMORE AND THE STATE OF MARYLAND GOVERNMENT (IN $M) Tax Type

City of Baltimore

State of Maryland

Income Tax ($M)

$5.4

$28.720

Sales & Use Tax ($M)

N/A

$3.7

Business Tax ($M)

N/A

$1.7

Total Tax Revenue ($M)

$5.4

$34.1

Source: Morgan State University (2018), Econsult Solutions (2018), IMPLAN (2015), Maryland State CAFR (2016), City of Baltimore CAFR (2017)

6.6

WHY THIS MATTERS

Morgan produces, proportionally, more technical graduates than the national average.

16.9 percent of Morgan alumni are employed in the STEM fields, versus 11.1 percent for all Maryland schools.

As noted at the outset of this section, Morgan’s primary contribution to the local and state economy is by educating and credentialing students.

Because of the care it takes to be inclusive and accessible in enrolling students, and then comprehensive in supporting them through graduation, this contribution is particularly significant. To a greater degree than most schools, Morgan is helping students that might not otherwise access a college education.

Upon graduation, the education and credential students received at Morgan allows them to

This includes $21.9 million in direct personal income taxes paid by Morgan alumni and an additional $6.8 million in indirect and induced taxes. .

20

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participate more substantively in the economies they live and work in after graduation. This is reflected in part in higher salaries and wages, which are then spent back into local economies and produce significant economic and tax revenue impact.

But it is also reflected in other ways which are not accounted for in the calculations in this section. For example, in some cases Morgan graduates not only make more money in their jobs, but are also creating jobs through their entrepreneurial ventures. They are also taking strategically important roles in the local and state economy, such as in highly technical federally funded research work. Thus, Morgan’s contribution to this part of the local and state workforce is supporting outside infusions of economic activity in the form of federal funds, as well as the larger constellation of private sector activity that seeks to be near this work. Given that more and more business activity is landing in places with high concentrations of technical labor, this contribution by Morgan of educated graduates is an increasingly important part of the state’s future economic vibrancy.

Morgan Students working together on a Robotics project.

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7.0 MORGAN COMMITED TO “PLACE” 7.1

SECTION OVERVIEW

The previous four sections have described how Morgan State University is a significant economic engine at the local, regional, and statewide level. But Morgan’s impact affects more than can be quantified numerically through these established categories. Rather, it is the various intangible, qualitative and social benefits that help to solidify Morgan’s role as the preeminent public urban research university in Maryland.

Part of being a public urban institution is the idea that its educational mission is coupled with a purpose to serve and support a particular place. In Morgan’s case, that is the City of Baltimore and beyond. Morgan takes this mandate seriously and it actively seeks ways to strengthen the community that it calls home. This includes a formal university-community partnership through the Morgan Community Mile, a plethora of community-serving resources, volunteer opportunities for faculty and students, as well as an active support for local businesses.

7.2

MORGAN COMMITTED TO “PLACE”

Morgan is an anchor institution in Baltimore, and as such, community engagement is embedded in the ethos of the university. As the preeminent urban research university in Maryland, Morgan partners with its stakeholders to invest in resources and programs for the benefit of its surrounding neighborhood and Baltimore. Morgan’s commitment to place is not only reflected in its mission and core values, but it is a priority for President Wilson and a key goal in Morgan’s 2011 – 2021 President Wilson announcing Strategic Plan: “Morgan will engage the Morgan Community Mile Initiative. with community residents and officials in the use of knowledge derived from faculty and student research, the sharing of mutually beneficial resources, and the appropriate and timely dispatch of University experts and professionals to collaborate in addressing community concerns.”21

21

“The Strategic Plan for Morgan State University,” Morgan State University, http://www.morgan.edu/about/strategic_plan.html.

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MORGAN COMMUNITY MILE Morgan’s commitment to service and engagement with its local community takes its highest and most comprehensive form in an initiative called the Morgan Community Mile (MCM) which brings together all facets of Morgan’s approach to neighborhood investment. MCM is a direct implementation of the engagement strategic goal, using inclusive, democratic, and participatory processes to determine the needs of the community with the community. In December 2012, Morgan officially formalized its commitment to place through this university-community partnership that involves residents, businesses, public agencies, and other stakeholders in making Northeast Baltimore a better place. MCM serves communities and neighborhoods in Northeast Baltimore that are approximately within a 1-mile radius from Morgan, which includes nine community statistical areas and more than 56 community associations.22

MCM Solar Panel Initiative Program

MCM’s five priority areas were identified from a series of strategic planning meetings that involved community residents and Morgan faculty, staff, and students: 1) 2) 3) 4) 5)

Public Health, Crime, and Safety Education and Youth Development Economic Development Entrepreneurship C.A.R.E.S. (Creativity Art Recreation Entertainment and Services)

A number of key programs and services have emerged from the MCM, including:  Live Near Your Work is an effort between Morgan and Baltimore to increase home ownership among Morgan employees while also supporting community

22

“Morgan Community Mile,” http://communitymile.morgan.edu/.

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revitalization in Northeast Baltimore. The program provides a cash grant to eligible Morgan employees purchasing homes in targeted neighborhoods. Cash grants range from $1,500 to $3,500 to be applied at settlement/closing costs or down payment of a home.23 

Solar Panel Initiative: A project where Morgan volunteers help to install solar power and energy efficiency upgrades to select homes located within the MCM. The Initiative has provided solar panels on 31 buildings.24

MCM is recognized by the City of Baltimore, Maryland Governor Larry Hogan, the Department of Energy, and by other HBCUs as the leading example for community engagement and economic development for a preeminent public urban research university. As it continues to develop, Morgan envisions the creation of a free-standing community based organization that helps solve community problems/issues within the service area, and to be a pillar to the Northeast Baltimore community for crime prevention, public safety and health, education, and economic development.

7.3

COMMUNITY-SERVING RESOURCES

Another way Morgan takes seriously its role as an anchor institution in Northeast Baltimore is by developing ways to use its institutional resources to serve and connect with its immediate community. This is a fulfilment of its institutional mission and of President Wilson’s focus on Morgan as a public-serving institution. Morgan provides access to resources that are available to nearby residents, such as mentoring, tutoring, greenspace on campus, safe environment to collaborate, and various social events. These resources are available both on campus and in the neighborhood at locations convenient for residents.

Annually, Morgan students provide over

20,000 hours of community service.

The Office of Community Service plays an active role in inviting the community to the campus, where the campus serves as a rich resource for the community. Morgan faculty, staff, and students are involved in a wide variety of programming across the University that makes the campus available as a resource to the community. For instance, students lead many volunteer run programs that serve the under-represented and the educationally at-risk youth in Baltimore

http://communitymile.morgan.edu/?page_id=1155 “MSU Volunteers bring clean energy to Morgan Community Mile Homes in Need,” January 27, 2018, Morgan State University, http://news.morgan.edu/Morgan-volunteers-bring-clean-energy-to-morgan-community-mile-homes-in-need/ .

23 24

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through the Office of Community Service (OCS).25 Annually, Morgan students contribute 20,000 hours of volunteer and community service. The following programs are described below.

The College Discovery Academy The College Discovery Academy offers Academic Assistance, Life Skills, College Prep, and Career Readiness Components to Baltimore youth grades 7th-9th. This program prepares Baltimore youth who are underprepared for higher education, and provides the resources they need to pursue higher education.26 Campus Pals Campus Pals is a student volunteer-run service program, which gives elementary and middle school students an opportunity to visit and learn about a prominent HBCU. This program strives to expose youth to higher education and encourage them to strive for excellence at school. 27 The program is led by 20 Morgan tour guides, serving 4,000 children in over 75, both in state and out of state, schools.

Morgan Students volunteer at the College Discovery Academy.

“Office of Community Service,” Morgan State University, http://www.morgan.edu/communityservices.

“College Discovery Program,” Morgan State University, http://www.morgan.edu/academic_outreach_and_engagement/office_of_community_service/college_discovery_academy.html.

27 “Campus Pals Tours,” Morgan State University, http://www.morgan.edu/academic_outreach_and_engagement/office_of_community_service/campus_pals_tours.html.

25 26

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Mentoring for High School Students Morgan also offers free mentoring programs to local high school students, such as the Brother 2 Brother Mentoring Program and the Sisters Advancing Sisterhood in Youth (S.A.S.Y.) Mentoring Program, which are led by Morgan student volunteers.28 Upward Bound The Upward Bound Program: provide first-generation, low-income high school students with access to postsecondary education as full participants. Upward Bound seeks to increase the rates at which participants complete secondary education, enroll in and graduate from institutions of post-secondary education. The Morgan Upward Bound is designed to enhance the academic and personal skills of students while preparing them while in high school for college admission, retention and graduation. Additionally, students are provided opportunities to be exposed to cultural and career activities and experiences. Upward Bound is a supplementary program that enhances the regular high school curriculum.29 Kwanzaa Cultural Festival Each year on the first Saturday in December, Morgan State University celebrates with the Baltimore Community utilizing music, games, exhibits, dance, art, storytelling, food and other culturally rich activities, Morgan State Students Convey the message that unity and pride are the focal point of the Kwanzaa Celebration. The Kwanza Cultural Festival is led by 400 Morgan students, and draws in over 1,200 children from the community.30 In addition to providing numerous resources on campus for local youth, Morgan strives to be an accessible and safe environment, ensuring that the campus and surrounding neighborhood is conducive to a productive and safe learning environment. The Office of Police & Public Safety has a staff of 38 members dedicated to ensuring the safety of the campus and university-leased housing that is within one mile of the campus. The Office of Police and Public Safety also work together with the Baltimore City Police Department through a mutual working partnership that includes patrol assistance and providing back-up. In addition, the Public Safety Department operates a police sub-station at the off-campus University leased facility.31 Another physical amenity that Morgan provides to the community is an intuitive through the Morgan Community Mile. The Morgan StreamWalk project is a long-term plan to create a multiuse trail through Morgan’s campus, along the Herring Run and Chinquapin Run streams. By

“High School Programs,” Morgan State University, http://www.morgan.edu/academic_outreach_and_engagement/office_of_community_service/high_school_programs.html.

29 “Upward Bound Program,” Morgan State University, http://www.morgan.edu/upwardbound.

30 “Kwanzaa Cultural Festival,” Morgan State University, http://www.morgan.edu/academic_outreach_and_engagement/office_of_community_service/kwanzaa_cultural_festival.html.

31 “Clery Act Compliance,” Morgan State University, http://www.morgan.edu/msupolice/cleryreport.

28

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creating this trail, Morgan will be connected to Mount Pleasant Park to the north, Chinquapin Park to the west, and Herring Run Park to the south, allowing community members access to all surrounding green spaces.32

“You have to go into the neighborhoods and you have to have genuine conversations with the neighborhoods and ask the neighbors, if you will, what are the solutions? Because these are the individuals who are living these kinds of challenges every single day. Over a period of time, you really need to listen to individuals who have been affected by policies that have been made.”

Dr. David Wilson, President of Morgan State University Morgan’s campus serves as an amenity in numerous ways to the Morgan community, whether helping to foster a safe environment, increasing recreation through improved amenities such as the StreamWalk project, and an established commitment to helping local youth, the community has access to many resources the campus provides.

7.4

SUPPORTING LOCAL BUSINESSES

Morgan has a track record of engaging with and supporting local businesses. As an anchor institution with local buying power and economic resources, Morgan’s involvement in the community includes strengthening and stabilizing retail corridors and helping to foster local businesses through providing technical assistance. For instance, Morgan encourages spending in the local community through identifying businesses to accept the BEAR card, which debits a student’s university account and allows them to easily purchase goods in the community.33 This partnership helps students support individual vendors and ultimately provide a better mix and quantity of local shopping than would otherwise be supported without the presence of Morgan.

10,000 SMALL BUSINESSES INITIATIVE One of Morgan’s signature projects is its involvement in the 10,000 Small Business Initiative. In 2017, Morgan State University became the lead partner in the 10,000 Small Businesses

“The Morgan Streamwalk Project,” Morgan State University, http://communitymile.morgan.edu/?page_id=1114.

“Morgan Community Mile Celebrates Two Years of Accomplishments,” Morgan State University, http://news.morgan.edu/morgan-community-mile-celebrates-two-years-of-accomplishments/.

32 33

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Initiative, a $10 million program launched by the State of Maryland, the City of Baltimore, Goldman Sachs and Bloomberg Philanthropies. This initiative will provide support to more than 10,000 new start-up companies in Baltimore. Morgan, in partnership with other local institutions, Johns Hopkins University and the Community College of Baltimore County, will deliver business management and entrepreneurial training in finance, accounting and negotiating to program participants. These support services will provide the critical assistance small startups need to grow and stay in Baltimore.34

NORTHWOOD SHOPPING PLAZA Morgan’s commitment to enhancing its retail corridor is best exemplified in its efforts to bring reinvestment to a nearby commercial area, the Northwood Shopping Plaza. According to President Wilson, “The shopping center has deteriorated to the point where it is the site of serious criminal activity and it is an eyesore of the highest order.” Nearby neighborhoods also have long complained about the plaza due to its crime and blight. The shopping center is currently slated for redevelopment and this reinvestment is a direct response to Morgan and the private market addressing the needs of the community. The new plaza, renamed Northwood Commons, is anticipated to have a two-story Barnes & Noble bookstore with a Starbucks aimed at students, a grocery store, offices, campus police, and other potential retail. In addition, Morgan plans to house its campus store at the Northwood Commons, where it will make annual lease payments to the developer.

Morgan is supporting development of the Northwood Commons in numerous ways. At the request of Morgan, a Baltimore City Council committee recently voted unanimously to support millions in tax breaks, helping to make the redevelopment more financially feasible. Morgan has also committed $25 million in state funding to the cost of redevelopment, which is nearly half of the redevelopment’s total cost at $60 million. Morgan’s support is critical to spurring redevelopment of the retail and will help attract further economic activity to Northeast Baltimore. 35 Morgan’s support of the business community in Baltimore is manifested in its role as an anchor institution in supporting businesses, and as an institution that provides resources to Baltimore entrepreneurs and businesses. This support helps further increase economic activity to both its immediate community and Baltimore.

HBCU Digest, “Morgan State is Lead Partner is Baltimore’s $10M Small Business Development Program,” August 4, 2017, https://hbcudigest.com/morgan-state-is-lead-partner-in-baltimores-10m-small-business-development-program/.

35 Broadwater, Luke, “Baltimore council committee backs tax break to spur redevelopment of Northwood plaza,” February 22, 2018, The Baltimore Sun, http://www.baltimoresun.com/news/maryland/politics/bs-md-ci-rise-zone-northwood-20180222story.html.

34

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WHY THIS MATTERS

As a result of Morgan’s purchasing power and its involvement in real estate development, the community has access to a vibrant and amenity-rich retail corridor. As an anchor institution in Northeast Baltimore, Morgan is not an isolated educational enclave. Rather, it is an integral partner helping to guide the economic and social development of the region. In a very real sense, its ability to attract talented individuals is inextricably linked to the health and vitality of its host community.

Morgan understands this better than most universities and is actively partnering with the community to advance the future growth of the city.

Mayor E. Catherine Pugh (’77), pictured with fellow Morgan alumni, Kweisi Mfume (’76), Hon. Robert M. Bell (’66), and Bob Wade (’68)

By demonstrating its institutional commitment to place – Morgan has simultaneously instilled these public service values into its faculty, staff, and students. As a result, it produces alumni that are actively engaged in the public sphere.

One such example is the current Mayor of Baltimore, Catherine Pugh, who received both her Bachelor’s degree and MBA from Morgan. Prior to becoming mayor, Pugh served as a Baltimore City Council person, a member of the Maryland general House of Delegates, and as a Maryland State senator. She is also the founder of the Baltimore Marathon and the Baltimore Design School. Mayor Pugh is the first Morgan alumni to obtain the office of Mayor of Baltimore and credits her experience at Morgan for helping her develop her strong work ethic and commitment to public service in Baltimore.36

“I encourage young people to go here. Become engaged. It’s a great university. It has a great legacy. I came as a teenager and I [was] an adult by the time I left. It has contributed to who I am today. It’s where I grew up. While I wasn’t born in Baltimore, I call this place home.”

Mayor Catherine E. Pugh, City of Baltimore

“Morgan Graduate Catherine E. Pugh, Mayor, City of Baltimore,” Morgan Magazine, 2017 Issue Volume 1, http://www.morgan.edu/morganmagazine/.

36

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Another example of a Morgan alumni going on to serve their community and country is Brigadier General Raymond Scott Dingle, who graduated Morgan in 1988 with a Bachelor’s degree in Sociology.

He is the 16th general to graduate from Morgan. Prior to being promoted to Regional Health Command-Atlantic, he served as the Director of Healthcare Operations at the Office of the Surgeon General and commander of the 30th Medical Brigade in Germany. He has received numerous medals during his 30 years of continued service.37 As educators, non-profit leaders, and public servants, Morgan alumni work tirelessly to provide a voice for the marginalized, avenues for economic mobility, and opportunities for residents to shape their surroundings and ultimately provide a better future for the next generation. Their impact is global and local, and as such, the world at large and the community around Morgan are better for it.

“Morgan Alumnus Rises to Commanding General of Army Regional Health Command-Atlantic,� April 4, 2017, Morgan State University, http://news.morgan.edu/morgan-alumnus-rises-to-commanding-general-of-army-regional-health-command-atlantic/.

37

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8.0 MORGAN AS AN INNOVATION HUB 8.1

SECTION OVERVIEW

An increasingly important role that research universities play in their regional economy is as innovation hubs, for this is what makes regions globally competitive. Morgan State University is an integral part of the innovation ecosystem in Baltimore and Maryland. Its concentration of research activity, knowledge leaders, and incubation programming creates a healthy environment that enriches entrepreneurship activity.

Unlike other research institutions, Morgan’s innovation activity is grounded in its mission of public service. In fact, its research addresses some of Maryland’s most pressing challenges, such as the health of the Chesapeake Bay, protecting data from cyber security threats, and opportunities for sustainable and resilient communities. As a result, innovation efforts support the needs of society and also contribute to the overall economic competitiveness of Baltimore and the State of Maryland.

Importantly, Morgan’s research contributions not only produce social impact, but also help drive the regional economy. In fact, on a per $10 million invested basis, Morgan outperforms the state and national averages for research universities for key technology transfer and commercialization metrics.

“We must continue to embrace the best administrative and managerial service excellence practices throughout our campus community. We are simply determined here at Morgan to be one of the most innovative and one of the most relevant universities in this country in the coming 150 years, as we have been during our first 150 years.”

Dr. David Wilson, President of Morgan State University

The following section describes the philosophy and practice of innovation at Morgan, the research centers that serve as a catalyst for economic growth, as well as the significant tech transfer and commercialization outcomes for the university. In addition, this section highlights some of the innovative partnerships that help train the next generation, and fulfil critical workface gaps in high-demand industries.

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8.2

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PHILOSOPHY AND PRACTICE OF INNOVATION AT MORGAN

As Maryland’s preeminent public urban research university, Morgan is focusing its technology transfer efforts on the creation of new start-up businesses in Maryland - with a special emphasis on Baltimore. Furthermore, Morgan believes it is not enough to facilitate new company startups based on university innovations. Morgan’s Office of Technology Transfer (OTT) is focusing on local retention of these new companies and the related manufacturing operations and associated jobs, through its technology transfer licensing agreements. Morgan’s focus on developing an innovation ecosystem in Baltimore and Maryland is embedded in its vision.

Innovation is a key “Institutional Core Value” listed in Morgan’s 2011 – 2021 Strategic Plan, which emphasizes growing a culture of innovation and entrepreneurship.

Morgan’s holds an annual “Innovation Day” in Annapolis. It brings together Maryland legislators, students, faculty, staff, and alumni for an engaging first-hand look at new research, innovation and partnerships’ initiatives incubated in the classrooms, laboratories, and offices of Morgan.

Morgan fosters a robust culture of innovation through an Initiative called Innovation Works (I-Works), led by the OTT. It consists of programs being developed for campus faculty, staff and students, and outreach to engage the community. The overarching goal of IWorks is to transform innovation into local economic development opportunities and jobs.38 I-Works consists of innovation, technology transfer and economic development programs for campus faculty, staff and students, and outreach to engage the community:39

1) I-GAP: the Innovation Grant Assistance Program provides early stage grants to Morgan innovators to further develop Morgan innovations with potential for licensing and new start-up businesses. Innovation Gap Grants (I-GAP Grants) strive to enhance the commercial viability of Morgan technologies by bridging the "Gap" between laboratory inventions and the marketplace. The grants are designed to increase the likelihood of transferring a Morgan invention to business or industry by enhancing current identified innovations.

2) I-Works ISO: reaches out to both new and seasoned entrepreneurs, in-search-of (ISO) innovations for new local technology based businesses. The program will also work to connect and match Morgan's students, graduating college seniors, advanced degree

“Innovation Works, Morgan State University, http://www.morgan.edu/research_and_economic_development/office_of_technology_transfer_(ott)/innovation_works_.html.

39 “I-Works Program Descriptions,” Morgan State University, http://www.morgan.edu/research_and_economic_development/office_of_technology_transfer_(ott)/innovation_works_/iworks_programs_descriptions.html.

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candidates with new and early stage Morgan technology startup companies ISO employees.

3) I-Works Community: engages the MCM, regional and business communities (e.g., Aquaculture business community) to promote and enhance science, technology and innovation, technology transfer and the creation of new businesses and jobs to enhance Morgan’s local, regional and state economic and societal impact.

4) I-Start: is being developed for both "Pre-Incubator" and "Start-up" spaces for Morgan entrepreneurs and Morgan start-up companies. The Pre-incubator will provide space for Morgan's budding entrepreneurs in the early stages of forming a new business.

Morgan’s Innovation Day showcases breakthrough research, inventions, and initiatives.

The OTT will be hosting the University’s first annual Innovation Awards Ceremony in 2018, to celebrate innovation and to recognize and award Morgan’s innovators. The I-Works programs, led by the OTT, support the faculty, students, and community’s intellectual pursuits to create new innovations and technologies.

RESEARCH CENTERS Innovation at Morgan is not only for the benefit of nearby residents, but it positively impacts the entire State of Maryland. It allows Maryland to be competitive in the region, through new technologies and research being developed exclusively at Morgan.

Morgan has a number of distinguished research centers that continue to inspire thought leaders, scientists, and students to this day. Its projects serve as a catalyst for economic growth in Baltimore and in Maryland and address a few of the state’s most critical challenges.

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Patuxent Aquatic and Environmental Research Laboratory (PEARL) The PEARL is located near the Patuxent River (part of Chesapeake Bay watershed) in Saint Leonard, Maryland. Research conducted at the state-of-the art facility is designed to increase the understanding of coastal ecosystems so that they may be properly managed and protected. One research program led by PEARL is helping to increase Maryland’s competitiveness in the sale of oysters. Morgan recently received a $150,000 grant from the Maryland Department of Commerce to produce oyster larvae and spat for Maryland oyster farmers at a hatchery that is operated by PEARL. Maryland aquaculture farmers are becoming increasingly desperate for sources of oyster larvae and spat needed to grow their businesses. PEARL is focusing on the ecological health of the bay and its tributaries, resulting in positive environmental and economic impacts from PEARL’s initiatives to manage the ecological health of the Chesapeake Bay. 40 The PEARL has joined with OTT in its I-Works Community program focusing on innovation to help Maryland’s aquaculture business community.

ASCEND Center for Biomedical Research The ASCEND (“A Student-Centered, Entrepreneurship Development”) Center for Biomedical Research is focused on increasing diversity in the biomedical research workforce.

ASCEND encourages students to engage with authentic research through problem solving and self-directed learning, allowing students to understand the process of out of the classroom research firsthand. ASCEND also runs a CommunityBased Participatory Research Program that provides grants of $20,000 to research teams that aim to improve the health of neighborhoods and set out to find solutions to common health problems experienced in vulnerable and underserved populations including obesity, diabetes, and cancer.

“MSU-Maryland Partner to Grow State’s Oyster Aquaculture Industry,” January 21, 2016, Morgan State University, http://news.morgan.edu/msu-maryland-partner-to-grow-states-oyster-aquaculture-industry/ .

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Goddard Earth Sciences, Technology and Research (GESTAR) The Goddard Earth Sciences, Technology and Research (GESTAR) program is a combined effort between the Morgan State University, the University Space Research Association, and the Earth Science and Solar Systems Exploration Divisions of NASA’s Goddard Space Flight Center in Greenbelt, Maryland.

The program focuses on developing new space-based missions that help explain the behavior of Earth and other planetary systems. Research involving Morgan students include the reduction of radio frequency interference in satellite imagining of the ocean’s surface, improving rain and snowfall data collection and management, and examining the future of astrobiology. Since the founding of GESTAR in 2011, over 60 Morgan students have worked as researchers for different projects. Due to the success of the project, NASA extended the program for an additional 5 years in 2016.

Center for Reverse Engineering and Assured Microelectronics The Center for Reverse Engineering and Assured Microelectronics (CREAM) focuses on developing the skills of Morgan students studying to become cybersecurity engineers.

The Center’s research focuses specifically on mitigating the potential threats in the country’s cyber-physical infrastructure due to vulnerabilities in the Internet of Things (IoT). Currently, the Center hosts a team of ten doctoral students and four undergraduate students under the supervision of Dr. Kevin Kornegay in the Department of Electrical and Computer Engineering.

“The culture of innovation is alive and well at Morgan, and our students are embracing these opportunities and challenges by responding well to our mission of growing the future, leading the world.”

Dr. David Wilson, President of Morgan State University Morgan has become a place of innovation. Morgan supports the entrepreneurial spirit of faculty and students through programs offered by OTT and its robust research centers. This culture of innovation and support has led to impressive outcomes, where Morgan is outperforming state and national averages of research universities in key innovation metrics.

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8.3

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TECH TRANSFER AND COMMERCIALIZATION OUTPUTS AND OUTCOMES

Morgan’s sponsored research accomplishments include patents, licenses, and business startups – and importantly – these outcomes have been utilized to improve people’s lives. They are grounded in Morgan’s service to the community, and are helping to address critical issues relevant to Baltimore and Maryland. Although the Morgan OTT is relatively new, Morgan’s innovation efforts have blossomed and will continue to grow and produce innovations over time.

In the short span, it has produced some remarkable outcomes worthy of note:

MORGAN’S INNOVATIONS First US Patent Morgan was awarded its first-ever U.S. patent, on Jan. 26, 2016. The patent was received for Dr. Aslan’s invention of an improved crystallization technique that may provide better treatment for patients suffering from Alzheimer’s disease. As a result, Morgan’s patented crystallization device has the potential to help drug development research organizations and pharmaceutical companies accelerate a more effective treatment for Alzheimer’s disease.41 First Technology Licensing Agreement Morgan recently executed its first-ever technology licensing contract, for the “Method and Design of the Ultra-Clean Mobile Combustor for Waste Biomass and Poultry Litter Disposal,” commonly referred to as CycloBurn. The technology, which was developed at Morgan, is being commercialized by a new Maryland company, Cykloburn Technologies, LLC, formed by two Maryland entrepreneurs. The technology addresses two significant societal needs: managing environmentally damaging pollution from excess poultry farm litter and generating energy — both electricity and heat — from renewable resources. The technology represents a significant value proposition to individual poultry farmers, by ridding them of poultry waste, creating electricity for operations and providing heat for poultry houses.42

“Morgan State University receives first-ever full patent for new technology,” January 12, 2016, Morgan State University, http://news.morgan.edu/morgan-state-university-receives-first-ever-full-patent-for-new-technology/.

42 “Morgan gains its first technology transfer licensing contract,” February 27, 2018, Morgan State University, http://news.morgan.edu/morgan-gains-its-first-technology-transfer-licensing-contract/.

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Dr. Lee and Mr. Qian Presenting CycloBurn at the TEDCO Entrepreneur Expo, Pictured with Baltimore Mayor Catherine Pugh

INNOVATION OUTCOMES AND COMPARATIVE METRICS In sheer volume, Morgan’s innovation outcomes are dwarfed by that of other, larger research universities in the state. However, dollar for dollar Morgan is significantly more productive than the state’s other research universities and also produces at a level higher than the national level.

INNOVATION METRICS, PER $10 MILLION IN RESEARCH EXPENDITURES

Morgan has produced better innovation outputs and outcomes, as a return on research investment dollars than the state and national average.

As shown in Table 8.1, on a $10 million in research expenditure basis, Morgan produces significantly more invention disclosures and new patent applications than the state and national averages, which is a sign of its ability to initiate new scientific breakthroughs. Although relatively

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new at technology transfer, it also fares favorably in such later stage commercialization metrics as licenses and issued patents, and does considerably better than the state and national averages in start-up venture formation.

TABLE 8.1 – INNOVATION METRICS (PER $10M IN RESEARCH EXPENDITURES) Morgan State University Average Invention Disclosures

Maryland Average

National Average

Morgan as a Multiple of State National Average Average

14.01

2.90

3.84

4.8x

3.6x

New Patent Applications

7.64

1.37

2.21

5.6x

3.5x

Licenses

1.27

0.59

1.18

2.2x

1.1x

Issued Patents

0.64

0.63

1.08

1.0x

0.6x

Start-Ups Formed

1.27

0.14

0.16

9.1x

7.9x

Research Expenditures (in $10M)

$1.5

$133

$37

Source: Association of University Technology Managers (2016); Morgan OTT Metric Data 2018

This productivity is likely to continue into the future. For example, during the first nine months of the 2018 fiscal year, innovations were being received at an average rate of one new Intellectual Property Disclosure per 15 days, and U.S. patent applications were being filed at a rate of one per month. So Morgan’s innovation pipeline is well stocked for future activity.

Furthermore, Morgan’s commitment to grounding research in public service holds particular impact for the city and the state. And Morgan’s commitment to retaining start-up ventures and related commercialization locally intensifies the economic impact of these efforts.

For all of these reasons, Morgan is a good return on public investments in research. Dollars invested in Morgan will go further in terms of producing innovation outcomes in general, and specifically ones that are of direct societal and economic benefit to the state and its natural resources and population centers.

8.4

INNOVATION PARTNERSHIPS FOR THE 21ST CENTURY ECONOMY

Morgan has developed critical partnerships to help train the next generation in high demand industries such as engineering, electrical and computer sciences, and alternative energy. This fulfils critical workforce gaps in the defense industry and corporate world. The following highlights some key examples the ways in which Morgan is strategically implementing innovative partnerships.

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Navy-sponsored Master of Engineering in Cyber Engineering (MECE) program43 The MECE is a joint program involving the Naval Sea Systems Command (NAVSEA), the Strategic Systems Program (SSP) and the Education and Workforce Development/Training Program in Morgan’s School of Engineering. The School of Engineering identifies and recruits candidates typically newly baccalaureate graduates within the engineering and computer science programs, who meet the U.S. Navy’s employment requirements and the requirements for admission to Morgan’s School of Graduate Studies. In addition, the Navy has committed to send 10 to 20 students per year for an annual investment of $300,000 to $600,000 in tuition and program costs, pending budget and student availability.

First Completion Ceremony of the MECE Program

The Navy sponsored program helps to meet a demand in workers specialized in cybersecurity.

Specifically, these students are U.S. citizens, who have the security clearance required to work in federal agencies. Morgan is meeting this unique need for cybersecurity workers, and is working directly with the Navy to determine the needs and skills for a student to successfully enter into the federal workforce.

“Morgan State University and the Navy-sponsored MECE program celebrate the first completion ceremony,” October 12, 2017, Morgan State University, http://news.morgan.edu/morgan-state-university-and-the-navy-sponsored-mece-program-celebratesthe-first-completion-ceremony/.

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Verizon Partnership for Experiential Learning Opportunities44 In February 2017, Morgan launched a new, innovative program, the Expanding Student Experiential Learning program, aimed at providing undergraduate and graduate students at Morgan with technology-assisted, hands-on learning opportunities. The program challenges students to develop products and services that have a positive social and/or environmental impact and enhance everyday life. The program, financially and technically supported by Verizon, will allow students to gain access to resources provided by Verizon.

HBCU Clean Energy Consortium45 As part of an initiative to promote renewable energy and transformative economic development for communities nationwide, Morgan State University has joined a coalition of Historically Black Colleges and Universities (HBCUs) in signing an agreement with the United States Department of Energy (DOE).

The agreement, which launches a new partnership known as the “HBCU Clean Energy Consortium,” will help advance HBCU-led measures in the innovation economy, expand the number of graduates working in STEM fields and bring alternative energy sources to communities in need. As the nation transitions to a clean energy economy, HBCUs are playing a significant role in leading the transformation in the communities where they are located.

Internships at Facebook and Google Representatives from Facebook and Google regularly visit Morgan’s School of Computer, Mathematical, and Natural Sciences to recruit students for summer internships. In addition, these representatives discuss how to best prepare students for careers in competitive tech industries.

Morgan students returning from internships at Google and Facebook bring back valuable

Social Entrepreneurship Spotlight: Morgan students have embraced the culture of innovation. Four Morgan students, Benjamin Hall, Khir Henderson, Kevin Proctor, and Myles Wright-Walker, have developed an innovative app, called "Oculus," which is designed to help college students avoid debt.

“Morgan partners with Verizon to provide experiential learning opportunities for students,” March 20, 2017, Morgan State University, http://news.morgan.edu/morgan-partners-with-verizon-to-provide-experiential-learning-opportunities-for-students/.

45 “Morgan State University joins coalition of HBCUs to sign agreement with U.S. Department of Energy,” February 17, 2017, Morgan State University, http://news.morgan.edu/morgan-state-university-joins-coalition-of-hbcus-to-sign-agreement-with-u-sdepartment-of-energy/.

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knowledge and skills from their time at these respective companies to the State of Maryland, and are also helping them to be future innovators in Maryland.46 These innovative partnerships led by Morgan are just a few that are highlighted. Morgan’s culture of innovation tied with its mission of public service leads to the creation of unique partnerships. It helps to prepare students to meet the skills and demands of the modern workforce, while keeping the research grounded in service to the community.

8.5

WHY THIS MATTERS

The importance of innovation and entrepreneurship to regional economic competitiveness can hardly be overstated. We are squarely in a knowledge-based and innovation-driven economy, one in which regions rise and fall in competitiveness based on their ability to identify, grow, and retain entrepreneurial activity. Talent is increasingly mobile, seeking out places rich in innovation activity and anchored by a robust ecosystem of public, private, and not-for-profit institutions. In this environment, research institutions play a particularly vital role in creating, cultivating, and coordinating entrepreneurial activity.

Not only is Morgan increasing the region’s competitiveness, it is doing so in a manner that supports and advances the quality of life for residents in Baltimore, the region, and throughout the state. From studying gun and gang violence in Baltimore to supporting Maryland oyster farmers to protecting our nation’s cyber infrastructure, Morgan is producing research outcomes that improve people’s lives.

An example of a faculty member who has helped improved the regional competiveness is Dr. Seong Lee in Morgan’s Department of Industrial Engineering. Dr. Lee is an award winning inventor whose company, Cycloburn, is Morgan’s first technology license contract. But most importantly, as a part of the agreement, Cycloburn will have its manufacturing and administrative offices located in Baltimore – providing jobs and economic opportunity for local residents. This is just one of many example of how alumni and faculty are utilizing research for public service.

Recent studies have assessed the regional economic benefit of adding high-tech jobs.

According to Moretti, for every new high-tech job, five jobs are also created locally outside of the

“Facebook and Google Come to SCMNS,” Morgan State University, http://www.morgan.edu/school_of_computer_mathematical_and_natural_sciences/facebook_and_google_come_to_scmns.html.

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technology sector, in both professional and non-professional sector. 47 While Morgan’s innovation program is in its nascent years, it is seeing tangible spinoff activity and outcomes that are grounded in public service. Morgan’s research efforts are growing and will continue to do so with continued investment. They are effectively producing more innovation outcomes than the state and national averages – producing spinoffs and businesses that address public needs and spur economic activity. Morgan is using its innovation activities to create a virtuous cycle of intellectual stimulation, commercial breakthrough, public benefit, and resource attraction to the benefit of local and statewide residents alike.

47

E. Moretti, “The New Geography of Jobs” 2012, Houghton Mifflin Harcourt.

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9.0 COMMITMENT TO ECONOMIC OPPORTUNITIES TO LOCAL AND DIVERSE POPULATIONS 9.1

SECTION OVERVIEW

A great university must encompass a variety of backgrounds and experiences, ideas and ideologies, theories and perspectives. As an HBCU, Morgan State University’s core purpose is to provide opportunities for African American students to excel in education, research, and public service. However, in recent years, the University has stressed the importance of cultural diversity and is actively seeking to diversify its student body by the increased participation of different ethnicities and international students. By placing an emphasis on a diverse population and on retaining tuition affordability, Morgan is helping its students learn with people from diverse backgrounds, which encourages collaboration and fosters innovation. In addition, it helps to prepare students to participate in a diverse and inclusive workforce in the modern economy.

The following section describes the many ways in which Morgan attracts diverse and local populations to campus, supports them while on campus, and uses its own operations to support local and diverse hiring and procurement activity. This is another important part of Morgan’s contribution to community and society: making sure that an increasingly valuable commodity, a college degree, is accessible to as many people as possible, and working to be a socially-conscious economic driver in the Northeast Baltimore community.

9.2

LOCAL AND DIVERSE POPULATIONS AT SCHOOL

As an HBCU, it is well known that Morgan successfully serves and graduates a large proportion of African American students. However, Morgan continues to serve an increasingly diverse population, with an institutional goal for Morgan to intentionally serve a diverse student body, as demonstrated in Morgan’s Strategic Plan for Enhancing Cultural Diversity implemented in 2011.

This plan includes attracting more students from different academic, cultural, and socioeconomic backgrounds, such as international, non-traditional, and traditionally underrepresented minority students.

Some current initiatives to achieve and maintain a diverse student body include plans to hire a Diversity Admissions Officer, holding an open house throughout the academic year to engage parents, diverse students and schools in the recruitment process, hosting overnight programs that target underrepresented and international students, and enhancing monitoring and review of applications from underrepresented students.48 Morgan has been successful in its ongoing

48

Morgan State University Cultural Diversity Report, September 2017.

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efforts to recruit more diverse populations, such as international and traditionally underrepresented groups. For instance, Morgan has increased the number of undergraduate international students by 231 percent from 2010 to 2017 (219 to 724 students), since enacting the plan in 2011.

In addition, Morgan’s role as an anchor institution in the city also means serving the local population. Almost a quarter of the total student population is from Baltimore, demonstrating a strong local presence of students from the community (see Figure 9.1). Morgan also actively recruits students from the local community, as part of its goal to prepare local high school students to be college ready, and make the University accessible and affordable for all.

FIGURE 9.1 – PROPORTION OF TOTAL STUDENT POPULATION (UNDERGRADUATE AND GRADUATE) BY GEOGRAPHY

Source: Morgan State University (2018), Piktochart (2018)

NATIONAL AND STATEWIDE RANKINGS IN DEGREES AWARDED TO AFRICAN AMERICANS Morgan has received national prominence for their success in graduating African American students in a variety of degree programs. Importantly, a number of these rankings are for undergraduate and graduate degrees in key STEM related fields. It is important to note that many graduates go on to remain in the State of Maryland, contributing to clusters of talent and innovation in the region (see Figure 9.2).

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FIGURE 9.2 – SELECT MORGAN STATE UNIVERSITY RANKINGS

Source: Morgan State University (2018), Piktochart (2018)

Military-Friendly Morgan has a long-standing mutually beneficial partnership with the U.S. Military, where its ROTC Bear Battalion program was established over 70 years ago. More than 1,300 officers have graduated from the program since then, including 12 who have become general officers, making Morgan second only to West Point and South Carolina State University in producing the highest number of African-American generals in the U.S. Army. 49 Morgan has invested heavily in its military and veteran students, to provide support and services for its military community. Morgan has a dedicated office for veterans: the Veterans Engagement Services, and is a Yellow Ribbon University. It has also partnered with Maryland’s Department of Labor, Licensing and Regulation for veteran hiring fairs. Morgan’s investment for its military and veteran students is of important significance as a state institution that is dedicated to public service.

“MSU Recognized for its Service to Military Students,” Morgan State University, January 10, 2018, http://news.morgan.edu/MSU-recognized-for-its-service-to-military-students/.

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Morgan is ranked as a “Military Friendly School” in 2018 by Victory Media.

Military Times considered it as one of “Best Colleges” for militaryaffiliated students.

9.3

67

As demonstrated through numerous programs, Morgan strives to be an affordable and accessible university to all students. Morgan’s culture of creating an inclusive environment is important to increase the economic competitiveness of the region, as Morgan is helping to educate a more diverse student body who may not have been otherwise unable to obtain a college degree.

AFFORDABILITY AND ACCESSIBILITY PROGRAMS

A college degree is increasing in importance as a prerequisite to meaningful participation and gainful employment in today’s knowledge-based economy. At the very same time, obtaining a college degree is seen as inaccessible and unaffordable to large swaths of potential participants. The US cannot remain economically competitive and socially vibrant if such exclusion continues. Hence, efforts by universities to promote affordability and accessibility are essential not only to individual institutions’ future viability but also to the nation’s future competitiveness.

For more than a decade, Morgan has been guided by a vision of strengthening its historic mission of providing an excellent undergraduate education to a broad segment of the population, including many of the best prepared as well as some who might not otherwise have the opportunity to enroll in college but who have the potential to complete a degree. Morgan has numerous initiatives in place that make the university both affordable and accessible for its diverse student population.

These innovative programs are designed to help a wide variety of students as they enter and continue their education at Morgan. As 90 percent of Morgan’s students receive some type of financial aid, it is of significant importance for Morgan to make the university both affordable and accessible. Morgan is well known in the state among families of all racial and ethnic backgrounds as providing a high quality affordable education.

The importance of such a resource to an equitable society and a vibrant economy cannot be emphasized enough. In many cases, Morgan provides a high-quality education to students that might not otherwise be able to access or afford it, thus elevating them as well as elevating the state’s future economic competitiveness.

AFFORDABILITY AND ACCESSIBILITY FOR LOCAL STUDENTS Calvin E. Tyler Scholarship In 2016, Morgan received a $5 million scholarship donation from an alumnus, Calvin E. Tyler, which provides need-based scholarships that cover full tuition for select Morgan students who

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reside in Baltimore. The recent donation was a vote of confidence in Morgan’s continuing efforts to help graduate students who are academically qualified but who are unable to afford a college education.50 Instant Admissions Fair In addition to making the University affordable for local students, Morgan recently participated in an instant-admission college fair in Baltimore County. The fair provides in-person conditional acceptance to students who meet a minimum GPA and standardized test score. The fair targeted students of color as it sought to close the enrollment gap in the number of underrepresented students seeking higher education. The fair was a way to provide support for Baltimore high school students to navigate the college admission process and a way to eliminate application barriers for potential students who may be the first in their families to attend college.51

ACCESSIBILITY PROGRAMS Alternative Admissions Morgan offers several summer bridge programs designed to increase student academic success and retention. 52 These summer programs are designed to successfully prepare students who do not meet the standardized test scores for admission, or who are entering academically challenging programs. 

Morgan State University’s Center for Academic Success and Achievement (CASA) sponsors CASA Academy, an alternative admissions program for students who do not meet the SAT/ACT requirements for regular admission. CASA accepts up to 300 students each year, and all participants who successfully complete the summer bridge program are guaranteed admission to Morgan for the fall semester.



Morgan State University also offers bridge programs for academically talented students who plan to enter challenging fields. Morgan has achieved outstanding results with its PACE (Pre-Accelerated Curriculum in Engineering) Program. PACE is

“Morgan State Receives $5-million scholarship donation,” Morgan State University, February 10, 2016, http://news.morgan.edu/morgan-state-receives-5-million-scholarship-donation/.

51 Richman, Talia, “Instant admission: Historically black colleges go to Baltimore County school seeking prospects,” The Baltimore Sun, November 8, 2017, http://www.baltimoresun.com/news/maryland/education/bs-hs-hbcu-instant-admissions20171106-story.html.

52 “Alternative Admission Programs,” Morgan State University, http://www.morgan.edu/enrollment_management_and_student_success/office_of_undergraduate_admission_and_recruitment/al ternative_admission_programs.html.

50

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a five week comprehensive and intense summer program that gives students a significant advantage in both academic and personal development.

Non-Traditional Students There are numerous pathways to acquire a Morgan degree, where it is not limited to the traditional four-year undergraduate path. Morgan provides opportunities for non-traditional or working students through various programs.

For instance, a Memorandum of Agreement was developed in Academic Year 2016-17 between Morgan and the Laurel College Center (Center) to provide opportunities for students who are completing associate degrees at Prince George’s Community College and Howard Community College. The partnership will allow students with associate’s degrees from either community college to take courses from the university’s engineering and psychology programs beginning in the 2018 spring semester. Community college students seeking a Bachelor of Science in Engineering or a Bachelor of Arts in Psychology can take these Morgan courses at the Center.

The Center is centrally located, particularly for students who wish to continue their education after two-year community college but have full-time jobs or families and cannot drive to the Morgan campus. The two programs were based on student feedback on which degree programs they are most interested in pursuing.53 Morgan has also invested into new online degree programs to attract non-traditional students.

These are part of greater efforts to increase diversity and be inclusive of non-traditional students at Morgan. During the 2016-17 academic year, Morgan received approval from the Maryland Higher Education Commission to offer online degrees for select degree and post-baccalaureate certificate programs. Some of these degree programs include: Masters in Business Administration (MBA), Masters in Social Work (MSW), BS in Nursing/Master of Public Health, and Post-Graduate Certificate in Urban Sustainable Communities.54

9.4

LOCAL AND DIVERSITY IN HIRING

Morgan’s Business Faculty ranked among most diverse, where it is among the top 5 of U.S. academic institutions with the most diverse business school faculty.

Morgan’s Strategic Plan for Enhancing Cultural Diversity also includes initiatives to increase and retain a diverse workforce, which is a continuation of a long tradition at the university to maintain a diverse workforce. The need for a diverse faculty and staff is

Michaels, Andrew, “Morgan State University, community colleges partner at Laurel College Center,” The Baltimore Sun, September 12, 2017, http://www.baltimoresun.com/news/maryland/howard/columbia/ph-ho-cf-msu-bachelor-programs20170914-story.html.

54 Morgan State University Cultural Diversity Report, September 2017.

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of important significance for Morgan; as a HBCU, it is important that the faculty is also representative of its diverse student population. Morgan’s faculty and staff have a wellestablished culture of support for its students, and have been responsible for the production of African American engineers, mathematicians, and computer scientists.

Morgan consistently maintains a diverse faculty, where approximately half of all fulland part-time faculty and staff are African American.55 The Office of Diversity and Equal Opportunity also helps facilitate search committees as needed to provide tips on how to avoid engaging in discriminatory behavior during the selection process, recognizing and avoiding bias and prejudice, structuring a jobbased interview, and asking appropriate interview questions, in order to ensure fair and diverse hiring practices. Morgan’s commitment to having a diverse faculty is also reflected in its efforts through the Office of Faculty Development, where promotion and tenure training is provided to support and retain underrepresented faculty.56

9.5

Eugene M .DeLoatch, former dean of the Clarence M. Mitchell Jr. School of Engineering is credited with producing more African American engineers than any other individual in the history of American higher education.

LOCAL AND DIVERSE PROCUREMENT

Anchor institutions like Morgan State University wield an immense amount of economic power as they control significant resources both in the form of financial and human capital. Cultivating a strong local business sector is important as it has numerous benefits for local economies and citizens. Morgan’s commitment to local procurement reflects an understanding of the power of an institution’s economic footprint as a mechanism for inclusive opportunities. These investments represent economic opportunity that can help local and minority vendors build capacity. Money spent at local businesses stays in the local economy much longer, as local vendors are more likely to spend that money at other businesses in the community.

“Faculty Demographics,” Morgan State University, http://www.morgan.edu/academic_affairs/office_of_institutional_research/faculty_demographics.html.

56 Morgan State University Cultural Diversity Report, September 2017.

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Morgan’s Office of Procurement has small and minority business goals set by the state. There is currently a 29 percent minority business and 15 percent small business utilization goal. For instance, Morgan has a catering policy in place that requires local purchasing.

In fact, in FY 2018, Morgan has spent over $180 million in local contracts throughout Maryland.

Of this $180 million, $44.6 million on vendor spending is spent in Baltimore. The map below shows the amount Morgan spends across Maryland, supporting vendors and numerous industries across the state.

FIGURE 9.3 – VENDOR SPENDING BY ZIP CODE

Source: Morgan State University (2018), ArcGIS (2018)

Morgan is continuing its efforts to increase its minority business utilization goal. There are numerous events and trainings throughout the year designed to encourage faculty and staff engagement of the small and minority business community. This includes holding weekly trainings during the academic year that teaches faculty and staff the available databases there

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are to identify small and minority businesses, and how they can further maximize its use of these businesses.57 The Office of Procurement has also started to hold an annual Business Diversity Fair to further encourage the use of minority and small businesses.58

9.6

WHY THIS MATTERS

The modern workplace is increasingly representative of diverse cultures, ideas, and backgrounds. Full inclusion of all races and ethnicities helps to improve the workplace and foster diversity of thought and products that further stimulates the economy.

Morgan’s commitment to diversity is well established and well documented. Morgan not only promotes a diverse student body, but it embraces diverse faculty and staff. In fact, it is wellrecognized and awarded for its diverse faculty, including the fifth most diverse business school faculty for programs across the country. These extraordinary faculty and researchers stand as an example of the height of academic achievement and also a reflection of the workplace in the 21st century.

As a distinguished HBCU, Morgan’s primary purpose is to prepare and educate a population that is less likely to participate in the modern knowledge-based economy. This helps the student obtain a quality education and credentials that can be used to further their career path and life goals. From a societal perspective, the University’s efforts help to address the achievement gaps between races and economic groups. Furthermore, many graduates go on to remain in Maryland, contributing to clusters of talent and innovation in the region.

Morgan alumna Valerie Thomas stands as an exemplary case to the benefit of providing a quality education to diverse populations. Thomas received her Bachelor’s degree in Physics in 1965. Before attending Morgan, Thomas was actively discouraged in pursuing her interests in science and mathematics by both her parents and her high school. While at Morgan, Thomas was one of only two women in the undergraduate physics department.

After finishing at Morgan, she became one of the few black and female data analysts at NASA and eventually became the project leader for NASA’s image processing system for the Landsat, the first satellite to send images from space. In 1980, she received a patent for her illusion

57 58

http://www.morgan.edu/procurement/newsletter http://events.morgan.edu/event/small_minority_business_utilization_training#.WnNbZK6nGUk

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transmitter, which is used by surgeons to get a clearer image of the human body.59 Without the encouragement and rigor of a Morgan education, Valerie Thomas, and so many others, would likely not have had the opportunity to obtain a degree and fulfill their lifelong dreams to the benefit of society. This is the power of Morgan’s commitment to an affordable high quality education for a diverse student body.

59

“Valerie Thomas,” Lemelson-MIT Program, https://lemelson.mit.edu/resources/valerie-thomas.

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10.0 CONCLUSION 10.1 AGGREGATE ANNUAL ECONOMIC IMPACT This report has quantified the wide range of economic and community impacts associated with Morgan State University on an annual basis. Like other large-scale anchor institutions, Morgan is major regional economic engine: 

Morgan’s annual operations generate direct and indirect economic activity and employment across the Baltimore region, including significant impacts within Maryland.



Morgan’s capital investments support the construction industry and generate spillovers benefits in the communities in which it is located.



Morgan’s presence attracts significant ancillary spending into the region through students, and their visitors, enriching the local economy



Morgan’s education and credentialing services enhance the earnings potential of its graduates, and ultimately results in significant wages being retained within the regional economy, which circulate through the regional economy and generate significant state and local tax revenues.

Within Maryland, Morgan generates $1 billion in total economic output annually supporting 6,500 direct, indirect and induced jobs and $340 million in earnings, and generating $47 million in local tax revenue (see Table 10.3). This is an important part of the return to the State of Maryland on its investment in Morgan.

TABLE 10.1 – AGGREGATE ANNUAL ECONOMIC IMPACT OF MORGAN ON THE BALTIMORE ECONOMY Operations

Capital Investments

Output ($M)

$302

$62

$47

$163

$574

Employment Supported (FTE)

2,430

340

310

910

3,990

Earnings ($M)

$144

$17

$12

$54

$227

$3

$0.4

$5

$0.3

$9

Impact Type

Tax Revenues ($M)

Student/Visit Alumni Wage or Spending Premium

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TABLE 10.2 – AGGREGATE ANNUAL ECONOMIC IMPACT OF MORGAN ON THE BALTIMORE MSA Operations

Capital Investments

Output ($M)

$332

$74

$89

$402

$894

Employment Supported (FTE)

2,580

390

590

2,420

5,980

Earnings ($M)

$153

$20

$20

$123

$317

Student/Visit Alumni Wage or Spending Premium

Total

Impact Type

Student/Visit Alumni Wage or Spending Premium

Total

TABLE 10.3 – AGGREGATE ANNUAL ECONOMIC IMPACT OF MORGAN ON THE MARYLAND ECONOMY Operations

Capital Investments

Output ($M)

$334

$75

$97

$484

$990

Employment Supported (FTE)

2,590

390

660

2,900

6,530

Earnings ($M)

$153

$21

$22

$146

$343

$9

$2

$2

$34

$47

Impact Type

Tax Revenues ($M)

10.2 SOCIAL IMPACT Morgan is grounded in a mission of research, service, and innovation. As the preeminent urban research university in Maryland, it is focused on providing an excellent education to a diverse population, while also meeting the public needs of Baltimore and Maryland. These impacts go beyond what is quantified, providing intangible benefits to its graduates, as well as the City of Baltimore, the State of Maryland, and the nation as a whole.

Locally, Morgan is an engaged anchor institution committed to its neighbors and community through the Morgan Community Mile, which serves as a way for Morgan to respond to and listen to the needs of its community through numerous partnerships and programs in place. Morgan also has an extensive reach of helping local youth, through numerous mentoring and educational programs both on and off campus.

Morgan is producing cutting-edge research that is also providing public service to the local and statewide community. By fostering a culture of innovation, Morgan is producing the next wave of diverse innovators and leaders. It produces more output per research dollar spent than the state and national averages, and this is of particular importance because it is focused on issues of economic and social concern to the state.

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Furthermore, as a university that makes itself accessible to everyone, Morgan is educating a greater segment of the population who may not have otherwise obtained a college degree. This has a great impact on increasing the competiveness and talent of Maryland’s workforce, by lifting up many more students who can then contribute socially and economically in the state.

10.3 RETURN ON INVESTMENT Return on Investment (ROI) is a simple, yet powerful, performance metric that evaluates the efficiency of an investment by comparing its return relative to the initial cost. This is the framework on which higher education is increasingly being judged, whether by students comparing rising tuition on the front end with an uncertain job market on the back end, or by governments that are balancing the desire to invest in their universities with severe fiscal pressure.

Morgan is one of Maryland’s public universities and colleges, and therefore receives annual operating dollars from the state of Maryland. It is fair to ask what the ROI is of those state investments. This report is largely a response to that question.

As the visual below illustrates, when the state invests in Morgan, the university is able to maintain and grow its operations, providing an affordable high-quality education to a diverse and often marginalized population. These students earn degrees and become productive members of the state workforce, disproportionately in high demand and strategically important industries such as the STEM fields and in government-funded research.

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Morgan’s annual economic impact within the state economy comes from its annual operations, its capital investments, student and visitor spending drawn into the state, and the increased household income earned by alumni retained in the state. The aggregate economic impact from these sources sums to $1 billion a year, supporting 6,500 jobs and $340 million in labor income.

That represents almost eight dollars of impact to the state economy for every state government dollar invested into Morgan. It also produces $47 million in tax revenues to the State of Maryland (and an additional $9.4 million in tax revenues to the City of Baltimore). As President Wilson embarks on an ambitious but achievable plan to grow Morgan in size, productivity, and prominence, any state investments will be leveraged by other dollars to produce even more economic impact within the state economy.

But Morgan’s impact and return it produces for the state and its communities, extends well beyond this aggregate economic and tax revenue impact. As with all universities, it is anchored in a specific place. For Morgan, this is reflected in a number of community-serving ways that improve the physical and social fabric of Northeast Baltimore and surrounding communities. Its commitment to affordability and diversity lift more students into fuller participation in the economy, delivering significant returns to the state as a location of choice for households and employers alike. In addition, its graduates represent a concentration of highly skilled workers in strategically important industries, strengthening the state’s talent pool and therefore its ability to compete globally.

Morgan’s unique role as the state’s preeminent public urban research university bares particular emphasis. For every $10 million invested, Morgan’s research outputs outperform state and national levels, which means Morgan has a higher ROI than other schools in the state. In other words, additional research dollars invested by the state will produce greater returns at Morgan.

Not only is the institution more productive than other research universities, but the state’s return on investment is magnified because Morgan works to retain the ongoing research-supported commercial activity within the state and it focuses its efforts on societal issues that are important to Maryland’s future wellbeing.

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APPENDIX A – INPUT OUTPUT METHODOLOGY IN DETAIL A.1 OVERVIEW Economic impact estimates are generated by utilizing input-output models to translate an initial amount of direct economic activity into the total amount of economic activity that it supports, which includes multiple waves of spillover impacts generated by spending on goods and services and by spending of labor income by employees. This section summarizes the methodologies and tools used to construct, use, and interpret the input-output models needed to estimate this project’s economic impact.

A.2 INPUT-OUTPUT MODEL THEORY In an inter-connected economy, every dollar spent generates two spillover impacts: 

First, some amount of the proportion of that expenditure that goes to the purchase of goods and services gets circulated back into an economy when those goods and services are purchased from local vendors. This represents what is called the “indirect effect,” and reflects the fact that local purchases of goods and services support local vendors, who in turn require additional purchasing with their own set of vendors.



Second, some amount of the proportion of that expenditure that goes to labor income gets circulated back into an economy when those employees spend some of their earnings on various goods and services. This represents what is called the “induced effect,” and reflects the fact that some of those goods and services will be purchased from local vendors, further stimulating a local economy.

The role of input-output models is to determine the linkages across industries in order to model out the magnitude and composition of spillover impact to all industries of a dollar spent in any one industry. Thus, the total economic impact is the sum of its own direct economic footprint plus the indirect and induced effects generated by that direct footprint.

A.3 INPUT-OUTPUT MODEL MECHANICS To model the impacts resulting from the direct expenditures, Econsult Solutions, Inc. developed a customized economic impact model using the IMPLAN input/output modeling system. IMPLAN represents an industry standard approach to assess the economic and job creation impacts of economic development projects, the creation of new businesses, and public policy changes within its surrounding area. IMPLAN has developed a social accounting matrix (SAM) that accounts for the flow of commodities through economics. From this matrix, IMPLAN also determines the regional purchase coefficient (RPC), the proportion of local supply that satisfies local demand.

These values not only establish the types of goods and services supported by an industry or

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institution, but also the level in which they are acquired locally. This assessment determines the multiplier basis for the local and regional models created in the IMPLAN modeling system.

IMPLAN takes the multipliers and divides them into 536 industry categories in accordance to the North American Industrial Classification System (NAICS) codes.

The IMPLAN modeling system also allows for customization of its inputs which alters multiplier outputs. Where necessary, certain institutions may have different levels of demand for commodities. When this occurs, an “analysis-by-parts” (ABP) approach is taken. This allows the user to model the impacts of direct economic activity related to and institution or industry with greater accuracy. Where inputs are unknown, IMPLAN is able to estimate other inputs based on the level of employment, earnings, or output by an industry or institution.

A.4 EMPLOYMENT AND WAGES SUPPORTED IMPLAN generates job estimates based on the term “job-years”, or how many jobs will be supported each year. For instance, if a construction project takes two years, and IMPLAN estimates there are 100 employees, or more correctly “job-years” supported, over two years, that represents 50 annual jobs. Additionally, these can be a mix of a full and part-time employment.

Consequently, job creation could feature more part-time jobs than full-time jobs. To account for this, IMPLAN has a multiplier to covert annual jobs to full-time equivalent jobs.

Income to direct, indirect, and induced jobs is calculated as employee compensation. This includes wage and salary, all benefits (e.g., health, retirement) and payroll taxes (both sides of social security, unemployment taxes, etc.). Therefore, IMPLAN’s measure of income estimates gross pay opposed to just strictly wages.

A.5 TAX REVENUE IMPACT The economic impacts in turn produce one-time or ongoing increases in various tax bases, which yield temporary or permanent increases in various tax revenues. To estimate these increases, Econsult Solutions, Inc. created a tax revenue impact model to translate total economic impacts into their commensurate tax revenue gains. These tax revenue gains only account for a subset of the total tax revenue generation that an institution or industry may have on the economy.

Furthermore, where institutions are tax exempt, only the tax revenue generation from supported indirect and induced industries is accounted for.

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APPENDIX B – ANCILLARY SPENDING B.1

ANCILLARY STUDENT SPENDING

The first step to calculate ancillary student spending is to define total annual student spending by category. Base spending data comes from the Annual Survey of Colleges compiled by The College Board, which lists an approximate annual student budget for room, board, expenses, and transportation costs totaling $14,190 for on-campus and commuter students and $15,920 for offcampus students (see Table B.1 and Table B.2). For the purposes of this analysis, the three types of students can be defined as follows:   

On-campus students: Students who live in Morgan-operated housing on campus and typically eat at the campus dining hall using the meal plan Off campus students: Students who live in apartments or houses and pay rent to landlords not affiliated with Morgan Commuter students: Students who attend Morgan part-time and live either with their parents at home or within the region. It is conservatively assumed that any rent paid by these commuter students is either non-existent (if they are living with their parents) or not attributable to Morgan as they would likely be paying the same rent or living in the same location regardless of their enrollment at Morgan.

It is necessary, however, to account for the proportion of this spending that is captured by Morgan itself. Since the revenue generated by the institution is ultimately reflected in Morgan’s operating budget, impacts from this spending are represented in the calculations of Morgan’s annual operating impact detailed in Section 3 of this report. This spending must therefore be excluded from student spending estimates, which reflect only ancillary spending not captured by Morgan, and may therefore be added to the operating impacts from Section 3. Room and board expenses for on-campus students are assumed to primarily accrue to Morgan, as is a portion of other expenses by on-campus and off-campus students to reflect the Morgan-operated retail options like the Morgan bookstore and dining facilities. As such, we have made conservative estimates for ancillary student spending by on-campus, off-campus, and commuter students which we then apply to the student financial aid office’s academic year budget to produce annual ancillary spending estimates for on-campus, off-campus, and commuter students (see Table B.1 and Table B.2).

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TABLE B.1 – ANNUAL ANCILLARY SPENDING ESTIMATES FOR ON-CAMPUS AND COMMUTER STUDENTS On-campus Students

Commuter

On-campus/ Commuter Spending per academic year

% Spent outside of Morgan

Average amount Spent Outside Morgan

% Spent outside of Morgan and attributable to Morgan

Average amount Spent Outside Morgan

Rent

$6,436

0%

$0

0%

$0

Food

$4,054

10%

$410

50%

$1,880

Transportation

$1,200

100%

$1,200

50%

$770

Retail

$2,500

100%

$2,500

50%

$1,250

Spending Category

Total per student

$14,190

$4,110

$3,900

Source: The College Board (2018), Morgan (2018), Econsult Solutions (2018)

TABLE B.2 – ANNUAL ANCILLARY SPENDING ESTIMATES FOR OFF-CAMPUS STUDENTS Spending Category

Off-campus Student Spending per academic year

Off-campus Students % Spent outside of Average amount Morgan Spent Outside Morgan

Rent

$8,124

100%

$8,124

Food

$3,752

100%

$3,752

Transportation

$1,550

100%

$1,550

Retail

$2,500

100%

$2,500

Total per student

$15,920

$15,920

Source: The College Board (2017), Morgan (2018), Econsult Solutions (2018)

These per student spending estimates equate to over $80 million in ancillary student spending, $8 million of which is spent by on-campus students, $76 million of which is spent by off-campus students, and $4 million of which is spent by the 940 commuter students (see Table B.3).

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TABLE B.3 – ESTIMATED AGGREGATE ANCILLARY STUDENT SPENDING BY STUDENT TYPE Students

On-Campus

Off-Campus

Commuter

Total

Students

2,020

4,787

940

7,747

Rent

$0.0

$38.9

$0.0

$38.9

Food

$0.8

$18.0

$1.8

$20.5

Transport

$2.4

$7.4

$0.7

$10.5

Retail

$5.1

$12.0

$1.2

$18.2

$8.3

$76.2

$3.7

$88.2

Total

Source: The College Board (2017), Morgan (2018), Econsult Solutions (2018)

Next, we have estimated the proportion of that ancillary spending which takes place within the City of Baltimore as well as within the Baltimore MSA and Maryland by expenditure category. We have made adjustments to the amounts captured within each geography to reflect several realities. First, research indicates that some portion of retail shopping by millennials occurs online and thus is not captured locally (except a certain amount spent at the campus online store).60 Additionally, a portion of transportation spending is likely to take place outside of the local geography as students visit friends and family in other locations.

“Who are the Millennial Shoppers? And What do they Really Want?” Accenture Outlook. <https://www.accenture.com/usen/insight-outlook-who-are-millennial-shoppers-what-do-they-really-want-retail> 60

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TABLE B.4 – ESTIMATED ANCILLARY STUDENT SPENDING CAPTURED WITHIN EACH GEOGRAPHY On-Campus

Baltimore

Baltimore MSA

Maryland

Rent

N/A

N/A

N/A

Food

90%

100%

100%

Transport

25%

48%

71%

Misc. Retail

75%

80%

85%

Baltimore

Baltimore MSA

Maryland

Rent

50%

100%

100%

Food

50%

100%

100%

Transport

25%

80%

100%

Misc. Retail

50%

60%

70%

Commuter

Baltimore

Baltimore MSA

Maryland

Rent

N/A

N/A

N/A

Food

60%

90%

100%

Transport

20%

30%

35%

20%

50%

75%

Off-Campus

Misc. Retail

Source: Morgan (2018), Econsult Solutions (2018)

These proportions can be applied to the category specific spending estimates developed in Table B.3, and the known distribution of on-campus, off-campus, and commuter students that attend Morgan. In total, the students annually spend $42.8 million within the City of Baltimore, $78.4 million within the Baltimore MSA, and over $82 million within the state of Maryland (see Table B.5).

TABLE B.5 – AGGREGATE ANCILLARY SPENDING BY MORGAN STATE UNIVERSITY STUDENTS BY GEOGRAPHY # of Students

Spending within the City of Baltimore ($M)

Spending within the Baltimore MSA ($M)

Spending within the State of Maryland ($M)

On-campus

2,020

$5.1

$6.0

$6.8

Off-campus

4,787

$36.3

$69.9

$72.6

Commuters

940

$1.4

$2.4

$2.9

7,747

$42.8

$78.4

$82.3

Student Type

Total

Source: Morgan State University (2018), Collegeboard (2017), Econsult Solutions (2018)

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B.2

ANCILLARY VISITOR SPENDING

Calculating ancillary visitor spending requires an estimation of the volume and type of visitors attracted to campus for various reasons, and the application of spending profiles to each of those visitor types.

Spending profiles were developed by visit type to reflect that visitor spending patterns vary based on point of origin (local vs. out of town), reason for visit, and other factors. Unique spending patterns were estimated for each visitor type using available proxy data on national travel trends and local hotel rates. Where no proxy data is available, conservative assumptions are utilized.

Table B.6 below shows spending estimates by trip type by category. Note that student spending associated with events is excluded, since student spending is estimated separately.

TABLE B.6 â&#x20AC;&#x201C; SPENDING PROFILES BY VISITOR TYPE Visitor Type

Hotel Rate

Food

Local

$0

$10

$2

$5

$17

Out of Town Day Trip

$0

$41

$10

$23

$74

$100

$59

$10

$23

$192

Out of Town Overnight Trip

Other Retail Transportation

Total

Source: U.S. General Services Administration (2010), Hotels.com (2017)

All spending within Table B.4 is estimated to take place within Maryland, and then each category is further reduced by geography (See Table B.7).

TABLE B.7 â&#x20AC;&#x201C; ESTIMATED ANCILLARY VISITOR SPENDING CAPTURED WITHIN EACH GEOGRAPHY Location of Spend

Hotel

Food

Retail

Transport

Baltimore

75%

90%

90%

50%

Baltimore MSA

90%

90%

90%

60%

100%

100%

100%

60%

Maryland

Source: Econsult Solutions (2018)

These local ancillary spending profiles were then attributed to estimated attendance by visit type as described in the sections that follow to produce estimates of visitor spending by category and geography.

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Throughout the academic year and over the summer, Morgan attracts thousands of visitors to its campus. These visitors come from all over the country and spend a significant amount within the region each year which helps support employment and generate tax revenues for the state of Maryland. Thousands of alumni, parents, athletes, and fans come to campus for collegiate sporting events, cultural events, and programs hosted by Morgan.

To accurately estimate aggregate visitor spending, it is necessary to match spending profiles of the various types of visitors, recognizing that not all visitors have the same economic footprint.

Based on reason for visit, duration of trip, distance traveled, event type, and visitor age, unique spending pattern behaviors were created.

In total, approximately 72,270 visits are made to Morganâ&#x20AC;&#x2122;s campus each year and it is estimated that these visitors spent approximately $5.9 million in aggregate, $5.4 million of which is spent within Maryland. Of that $5.4 million, $4.9 million is spent in the Baltimore MSA, and $4.6 million is spent within the City of Baltimore (see Table B.8).

TABLE B.8 â&#x20AC;&#x201C; AGGREGATE VISITOR SPENDING BY VISITOR TYPE Visitor Type

Attendees

Visitors Per Spending Attendee per Visitor

Total Spending ($M)

Prospective Students

8,670

2

$39.8

$0.7

Visitors of Current Students

7,750

1

$37.5

$0.3

Commencement

2,410

2

$39.8

$0.2

Athletic Events

49,450

1

$90.4

$4.5

4,000

1

$63.4

$0.3

$81.6

$5.9

Alumni Weekend Total

72,274

Within City of Baltimore ($M)

$4.6

Within the Baltimore MSA ($M)

$4.9

Within State of Maryland ($M)

$5.4 Source: Econsult Solutions (2018)

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APPENDIX C – WAGE PREMIUM C.1

OVERVIEW

While Morgan State University significantly impacts the local, regional, and statewide through its direct expenditures and through students and visitors it draws into the local economy, it is important to recognize the core mission of the institution in educating students. This primary function, in addition to helping foster a more enlightened society, has a significant economic component as well, increasing the productivity and earning power of the workforce.

The relationship between educational attainment and earnings power is well-established, and a “wage premium” associated with additional education is often conceptualized and calculated from the perspective of the student, who can compare the costs associated with various educational (or non-educational) options with the expected return. This analysis utilizes this framework to estimate the gain not to the student, but rather to the local, regional, statewide, and national economy. Additional earnings by alumni in the workforce attributable to Morgan are estimated and translated into additional household spending, which in turns supports further employment and earnings.

C.2

MODELING INCREASED EARNINGS ATTRIBUTABLE TO EDUCATION

Academic research and government data demonstrate a clear return to educational attainment in the form of advanced earnings potential. Census Bureau data documents a linear relationship between median wages and educational attainment, with each additional level of schooling yielding increased average earnings. Returns to education are also impacted by the specific university that a student attends, due to variance in both institutional quality and fields of study offered. 61 Institutions of higher education vary widely in selectivity, curricular rigor and reputation.

These qualitative factors are also reflected in the earnings potential of graduates above and beyond the level of degree they attain. 62 The modeling approach undertaken in this calculation conforms to the gross impact approach set forth in Section 2 and utilized throughout the report. Since a gross analysis does not include a counterfactual in which impacts are replaced through market forces in the absence of the

For a detailed overview of anticipated lifetime earnings by degree type, see Webber, D (2014). “The Lifetime Earnings Premia of Different Majors: Correcting for Selection Based on Cognitive, non-Cognitive, and Unobserved Factors.” Labour Economics, Volume 28, June 2014, 14-23.

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See for example: Hoxby, C. (2015). “Computing the Value-Added of American Postsecondary Institutions. ”Internal Revenue Service Statistics of Income Division Working Paper, July 2015; and Monks, J. (2000).“The Returns of Individual and College Characteristics: Evidence from the National Longitudinal Survey of Youth.” Economics of Education Review, 19, 279-289.

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institution, the increases in education are additive to national earnings, reflecting a market-based valuation of enhanced productivity. However, within this framework, the population and level of employment is considered to be fixed independent of the presence of Morgan. Therefore, the benefit to the economy is not the full salary of Morgan alumni in the workforce, but rather the incremental wages associated with their educational attainment and skills/knowledge premium from their Morgan degree. A portion of these additional earnings (after accounting for taxes, savings, etc.) results in additional household spending which circulates through the economy, generating indirect and induced impact and supporting employment and earnings.

Modeling is undertaken in a three-step approach in the sections that follow:     

Section C.3 estimates the volume of Morgan alumni in the workforce, by educational attainment level; Section C.4 estimates the annual wage premium associated with Morgan for each of those attainment levels Section C.5 combines these two calculations, multiplying the volume of alumni at each attainment level by the wage premium for that level to yield an estimate of the aggregate annual wage premium associated with Morgan.

This calculation relies primarily on data from Morgan, as well as national government data where appropriate.

C.3

ESTIMATING MORGAN ALUMNI WITHIN THE WORKFORCE

The presence of Morgan has a significant impact on the composition, educational attainment and skill level of the local workforce. Post-graduation location decisions are impacted by educational experience, with a clear correlation between locations during and after schooling. From a regional workforce standpoint, Morgan alumni living and working within Baltimore, the Baltimore MSA, Maryland, and the US are either imported to those geographies (in the case of students originating from around the nation and the world) or retained within those geographies (in the case of the students originating within those geographies who are retained due to the presence of Morgan).

Graduates retained within the local workforce enhance local earnings potential in multiple ways.

First, academic research and government data indicate a clear return to educational attainment in the form of advanced earnings potential. Census Bureau data documents a linear relationship between median wages and educational attainment, with each additional level of schooling yielding increased average earnings. Academic studies have explored this phenomenon from the perspective of an individual student evaluating the returns to investments in additional schooling in terms of their expected lifetime financial position. However, these educational attainment gains accrue not only to the student, but to the region in which they are employed. Increased earnings

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enjoyed as a result of schooling are a market-based representation of the additional productivity associated with those workers, and ultimately result in additional household spending within the local economy on other goods and services.

Morgan provided detailed information for its alumni living in each designated geography. It is necessary to estimate the proportion of alumni within each geography that are actively employed (and therefore generate an annual wage premium). National data from the Bureau of Labor Statistics indicates that the national employment to population ratio for degree holders ages 25 and older is 72 percent as of December 2017.63 Applying these proportions across degree levels yields an estimate of nearly 42,440 employed Morgan alumni in the US, some of whom live in Baltimore, the Baltimore MSA, and Maryland (see Table C.1).

TABLE C.1 â&#x20AC;&#x201C; ESTIMATED MORGAN ALUMNI WITHIN THE US WORKFORCE Input

Bachelor's Degree

Value

Active Morgan alumni

Advanced Degree

42,443

(x) Proportion by Highest Degree

75%

25%

(=) Active Alumni by Degree Type

31,823

10,620

22,849

7,625

(x) Employment Rate

Total Alumni

42,443

72%

(=) Est. Alumni in US Workforce (x) Percent Living in Baltimore

28%

6,398

2,135

8,533

(x) Percent Living in the Baltimore MSA

60%

13,710

4,575

18,284

(x) Percent Living in Maryland

70%

15,994

5,337

21,332

Source: Morgan (2017), Bureau of Labor Statistics (2017), Econsult Solutions (2018)

C.4

IMPACT OF MORGAN ON ALUMNI EARNINGS

Next, it is necessary to estimate the impact of this educational attainment on annual earnings for the Morgan alumni estimated to be within the workforce.

This proportion is itself comprised of a labor force participation rate of approximately 73.5% and an unemployment rate of approximately 2.1%. Thus, the vast majority of non-working alumni are anticipated to be out of the labor force, rather than actively seeking employment but unable to find it.

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Median earnings by education level within Maryland can be derived from the American Community Survey, which illustrates the progression in median income by highest level of educational attainment from approximately $33,600 per year for a high school graduate to approximately $79,500 per year for an advanced degree holder. However, the calculation must account for potential differences in earnings between Morgan degree holders and the average degree holder in the state. To do so, longitudinal data from the federal Department of Education for Morgan is compared to all four year institutions in Maryland. This data source, part of the “College Scorecard” released publicly by the Department of Education, report earnings by institution based unique tracking of tax filings of students who applied for student loans ten years after they entered school.64 Median ten-year earnings for Morgan is $39,200, or 103.9 percent of the median ten-year earnings for all four year institutions of $37,700. Therefore, within this analysis, median earnings for Morgan graduates at each educational attainment level are conservatively scaled to 103.9 percent of median statewide earnings for that degree level.

As described in Section C.2 above, this analysis assumes that the population and employment level would remain fixed absent Morgan, and that the supply of graduates from alternative fouryear higher education institutions would remain fixed as well. In this scenario, the absence of Morgan would result in a substantial loss in the educational attainment level, and accordingly the productivity, of the workforce in each geography. In order to absorb this loss, while maintaining a fixed employment level, jobs held by Morgan alumni are assumed to “filter down” to workers with a lower educational level. Specifically, jobs held by Morgan alumni with associate’s degrees are assumed to be absorbed by workers with a high school education, jobs held by alumni with bachelor’s degrees are assumed to be absorbed by workers with associate’s degrees, and jobs held by alumni with advanced degrees are assumed to be absorbed by workers with bachelor’s degrees.65

This comparison is an imperfect proxy for earnings differentials between alumni of Morgan and non-Morgan alumni. Notably, it tracks only those students who applied for federal loans, it includes earnings for graduates and non-graduates, and it tracks earnings only at a single point in time (10 years after graduation) rather than throughout a career cycle. However, it is a federal data source that is comprehensive in its coverage of institutions, and its basis in IRS records is far sounder than data sources based on self-reported data. Further, this analysis does not use this source to define median earnings (which would be problematic due to the caveats listed above) but rather to estimate the proportional differences between Morgan and non-Morgan. Since data weaknesses apply to both groups, the comparison is “apples to apples” and represents a reasonable proxy for this purpose.

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Note that the “filtering” process may in practice involve a long sequence of steps, where a highly skilled position held by an alumnus with an advanced degree is first replaced with a slightly less skilled advanced degree holder, whose position is then replaced by a slightly less skilled advanced degree holder, until a position currently held by a worker with an advanced degree is replaced by a worker with a bachelor’s degree. This sequential process is mathematically equivalent to, and more easily conceptualized as, the replacement of one advanced degree worker with one bachelor’s degree worker, and so on. This process is also made possible by the ready availability of workers with high school degrees (for whom the unemployment rate is significantly elevated) and the open enrollment practices of many community colleges or non-selective four year institutions, which suggest that the supply of these workers is likely relatively unconstrained.

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Combining estimated earnings by education level and the assumptions described above about the absorption of employment opportunities absent Morgan generates an estimated annual wage premium by degree level associated with Morgan. This premium is calculated as the net difference between estimated earnings levels for Morgan graduates of a given degree level, and median statewide earnings for one lesser level of attainment. 66 This calculation results in an annual wage premium of $20,997 for Morgan bachelor’s degree holders (relative to associate’s degree holders) and $24,016 for Morgan advanced degree holders (relative to bachelor’s degree holders) (see Table C.2).

TABLE C.2 – ESTIMATED EARNINGS BY EDUCATIONAL ATTAINMENT LEVEL Highest Education Level

Maryland Median

Morgan Est (103.9%)

Estimated Wage Premium

Associate’s Degree

$41,662

Bachelor’s Degree

$60,287

$62,659

$20,997

Advanced Degree

$81,112

$84,303

$24,016

Source: American Community Survey Five-Year Estimates (2011-2015), College Scorecard Database (2017), Econsult Solutions (2017)

C.5

AGGREGATE EARNINGS IMPACT FROM MORGAN WAGE PREMIUM

The aggregate annual earnings impact from this wage premium can be derived by multiplying the number of alumni in the workforce at each degree level (as estimated in Section C.1) by the annual wage premium associated with that degree level (as estimated in Section C.2). In aggregate, the educational attainment increase for Morgan alumni in the workforce results in an aggregate annual wage premium of $464 million in the state each year, with the bulk of that premium ($336 million) attributable to bachelor degree holders (see Table C.3).

Note that this calculation is from the perspective of the national economy, not from the perspective of any individual alumnus.

Absent Morgan, it is likely that the majority of Morgan alums would have attained the same level of degree from an alternate institution. However, in so doing they would have replaced a different student currently at that institution. Ultimately, given a fixed supply at alternative institutions, the reduction of educational attainment applies to the economy (and society) broadly, rather than for any particular student.

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TABLE C.3 â&#x20AC;&#x201C; AGGREGATE ANNUAL WAGE PREMIUM ASSOCIATED WITH MORGAN Degree Level

Baltimore

Baltimore MSA

Maryland

Bachelor's

$134

$288

$336

Advanced

$51

$110

$128

$186

$398

$464

Total Working Alumni

Source: Econsult Solutions (2017)

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APPENDIX D – ABOUT ECONSULT SOLUTIONS, INC. This report was produced by Econsult Solutions, Inc. (“ESI”). ESI is a Philadelphia-based economic consulting firm that provides businesses and public policy makers with economic consulting services in urban economics, real estate economics, transportation, public infrastructure, development, public policy and finance, community and neighborhood development, planning, as well as expert witness services for litigation support. Its principals are nationally recognized experts in urban development, real estate, government and public policy, planning, transportation, non-profit management, business strategy and administration, as well as litigation and commercial damages. Staff members have outstanding professional and academic credentials, including active positions at the University level, wide experience at the highest levels of the public policy process and extensive consulting experience.

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