In Connecticut, independent education is a major economic driver
The economic impact of a private school on the overall economy probably is not a top priority for parents seeking an independent-school education for their child.
But they may be surprised to learn that notwithstanding their tax-exempt status, private schools “have a huge economic impact on local, regional and state economies,” according to Nadia Alam, research associate for the New England Association of Schools & Colleges (NEASC), who writes reports on the subject.
Douglas J. Lyons, executive director of the Connecticut Association of Independent Schools (CAIS), estimates the “public benefit” of Connecticut’s private schools at around $1 billion, basing the figure of 75,000 K-12 students enrolled in Connecticut private schools during the 2009-10 school year. “I’ve got 31,000 kids [in non-sectarian private schools]; the rest are in mostly Catholic parish schools and Montessori,” Lyons says. “Take that 75,000, multiply it by the average cost per pupil, and it comes up to almost $1 billion that Connecticut taxpayers do not have to pay.”
His estimate, however, covers only tuition costs, or what Alam terms direct expenditures for private schools.
The total economic impact of private schools also includes indirect expenditures on things like teacher and staff salaries, administrative salaries, teacher materials, classroom equipment, athletic equipment, capital equipment, school transportation, food and maintenance services, heat, water and electricity.
NEASC’s 2010 economic impact report, based on 2006-07 school year data, shows the total economic impact of the 187 NEASC-accredited private schools (PK-12) in Connecticut was $2,654,377,652. Direct expenditures accounted for $932,333,652.
“Based on the data that we have on accredited schools, there appears to be a clear correlation between population/student enrollment and economic impact,” Alam says. “Massachusetts and Connecticut are the most populous New England states, and Massachusetts has the greatest overall economic impact, followed by Connecticut. The same is true for the private-school sector. Looking at the private school data that we have, Connecticut stands second to Massachusetts in economic impact, and in fact accounts for a third of the entire private sector’s impact in New England.”
Alam says the calculations include endowment and endowment income, “and we don’t use a multiplier, which a lot of economic researchers do to estimate dollars spent beyond the first transaction.”
According to the survey, the collective economic impact of all NEASC-accredited K-12 schools, colleges and universities in Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island and Vermont was $135,209,540,664, a figure Alam describes as “not only greater than that of most large and for-profit corporations based in the region but, as a cluster, they generate more employment and economic stability than most other industries in the region.”
Moreover, she says, “Close to ten percent of the employment sector in New England is employed in a job connected to education, which can range from being a post-secondary administrator or special education teacher to educational services such as tutoring businesses.”
Wallingford’s Choate Rosemary Hall is the only NEASC-accredited private school in Connecticut compiling an annual economic impact report, Alam says, adding she wishes others would follow suit. Choate’s 2008-09 Statement of Economic Impact, its most recent report, says the school “receives funds in the form of tuition, gifts and grants, which the school spends on faculty and staff salaries, purchases and contracts for services. These expenditures, as well as categories such as student and visitor spending, have a significant positive impact on Wallingford and the greater New Haven area.”
The report shows Choate is the seventh-largest employer in Wallingford, with 389 faculty and staff (218 of whom live in the town) and a Connecticut faculty/staff payroll of $16.8 million, with $12.6 million of that paid to Wallingford residents.
The school also has 57 food-service workers and 65 custodial workers.
Of the $28,118,000 paid to Connecticut vendors for school purchases, $3,233,000 went to Wallingford vendors.
Choate also paid $110 million in capital expenditures between 1994 and 2008.
Around 54 Wallingford students receive $2.4 million annually in financial aid, and the average award is $20,000 for day students.
The report also details community service efforts such as students tutoring in Wallingford schools and organizing blood drives and campus programs benefiting area groups including the Wallingford Preservation Trust, Wallingford Symphony Orchestra and Quinnipiac Chamber of Commerce, which use Choate’s auditoriums and meeting rooms.
“More and more we’re trying to purchase locally if we can, particularly with dining service and capital improvements, and use a local vendor versus a non-local vendor,” says Choate Controller and Business Manager Ed Griffin. “Generally speaking, we just try to be a good neighbor. We understand we have nice facilities, and to the best we can without interfering with our core mission, we try to make them available to the community at large.”
Other Connecticut facts in the 2010 NEASC Economic Impact report survey include the following:
• In 2006-07, 53,294 students were enrolled in NEASC-accredited private schools (PK-12).
• In 2006/7, there were 74,132 nonpublic school students in the state and 397 nonpublic schools. (State Department of Education data show there currently are 229 “approved” private schools in the state, and of those, Alam says, 181 (79 percent) are NEASC-accredited or candidates for accreditation.)
• Enrollment in public (PK-12) schools as of academic-year 2006-07 was 574,494, while 13 percent of students in grades PK-12 were enrolled in nonpublic schools for that academic year, according to state Department of Education data.
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