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Monday, February 8, 2021

The Number Is 10

At the upcoming meeting of the Regents' Health Services Committee, there will be a presentation about the economic impact of UC on the California economy.*

Some of what will be presented is regional multiplier analysis. If the state spends money on UC, it is received by employees who go out and spend money, thus stimulating the economy. Those who receive the dollars that are spent in turn spend themselves. Etc. Etc. There are issues about this approach that we don't need to go into. (The report goes beyond such analysis.)

But here is a quick-and-dirty alternative way to think about the economic impact in a long term sense. Let's take fiscal year 2019-20, i.e., the year before the pandemic when things were good. The state at that time allocated about $3.9 billion to UC. Let's round it to $4 billion. The full budget for UC that year was about $40 billion (the core plus hospitals, related auxiliary enterprises, research grants, Dept. of Energy labs, etc.). Because the state supports the "core" element of UC to the tune of $4 billion, you get a $40 billion overall enterprise. In that sense, the state gets a multiplier of 10. 
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*https://regents.universityofcalifornia.edu/regmeet/feb21/h5.pdf

2 comments:

Bill Casey said...

A question?

What fraction of the money lost by the state in the EDD fraud (estimates range from $4-$30B) would be the UC’s $4B state funding?

California Policy Issues said...

It appears, at least so far, that the money EDD lost to fraud was federal PUA money, if that makes a difference.