Summer 2004

Measuring GW’s Economic Impact on the Metro Area

When it Comes to Spending in the Community, George Washington Tosses More than Silver Dollars

By Greg Licamele

The University’s economic impact continues to positively influence the DC metropolitan area in significant ways as GW employs thousands of people, contributes millions in taxes, pays for services around the region and attracts students who remain in the area, according to the most recent numbers from the Office of the Executive Vice President and Treasurer.

In calendar year 2002, GW employed nearly 13,500 people either full or part time with salaries, wages and benefits that totaled $353 million, of which $15 million was withheld in income tax and sent to state and local government coffers. The number of employees continues to place the University as the No. 1 employer in the District of Columbia after the federal government.

Beyond payroll taxes, the University paid $45 million in other taxes for fiscal year 2002–03. This amount included real estate taxes on properties held for investment purposes, sales taxes from the bookstore, food services and athletic events, as well as unemployment and FICA taxes, among other sources. In the same fiscal year, GW contributed $105 million to the local economy through the purchase of goods and services from area businesses.

“These numbers reflect the direct economic benefits the institution, by its presence in Foggy Bottom, creates for the District’s economy,” said Richard Sawaya, vice president for government, international and corporate affairs. “But these statistics do not reflect the indirect economic benefits.” For example, Sawaya said small businesses are dependent upon a customer base of thousands of students, employees and visitors to help sustain their operations.

Construction costs for the last fiscal year provided $85 million to local vendors. Since 1998, the University has devoted $480 million to construction projects at the Foggy Bottom, Mount Vernon and Virginia campuses.

“The building program has had a significant impact (on the economy),” said Don Boselovic, associate vice president for budget. “If you look at what we were building 10 years ago versus what we have built in the last two or three years, that’s a significant difference.” Since 2001 GW opened or broke ground on the Media and Public Affairs Building, the Health and Wellness Center, 1957 E St., the School of Business’ Duques Hall, Law School renovations, residence halls, projects at the Mount Vernon Campus and improvements at the former PSINET Building in Ashburn.

Sawaya cited the construction of the Ivory Tower residence hall as one example of a longer process of economic benefits for the region.

“There’s the work before hand, with the work of the architects and engineers,” Sawaya explained. “There are the benefits of the actual construction in terms of prime contractors and employees on site. There are the supplier benefits, construction being something that is inescapably local. And with the opening of Ivory Tower, there are the additional jobs generated to maintain the residence, as well as the retail that will be in place, that will be enduring and open to the community.”

GW’s contributions to the area economy have increased since 1998. Adjusted for inflation, the spinoff of the Medical Faculty Associates and the closure of the GW Health Plan, Boselovic said the University’s overall expenditures increased at an annual rate of 4.2 percent over the past five years, while salaries and wages increased at an annual rate of 3.9 percent.

Beyond the numbers of dollars spent, Sawaya said the educational infrastructure aids DC and the region in two ways — through schools and institutes providing knowledge and services, and through graduates who remain in the area.

“The institution is a way of bringing together diverse intellectual capital that does generate, in its due course, economic benefit to the District of Columbia,” Sawaya said. “That’s something that is well recognized across the country — that universities are sources of economic vitality. The fact that we are in the District of Columbia may mute that recognition, given that it is the capital of the country.”

This economic vitality, in many ways, stems from alumni who work in DC, Maryland and Virginia after graduating from GW. According to the Office of Alumni Programs, about 40 percent of graduates live in the metropolitan region.

“(Alumni) are knowledge workers by definition,” Sawaya said. “This is a knowledge-based town, in an increasingly knowledge-based economy.”

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