Economic News - Cornell Public Press Releases 2009

Cornell University is a 'stable generator of economic activity' in a tough economy, report shows
ITHACA, N.Y. – The overall stability of Cornell University’s annual $3 billion in economic activity throughout New York state is highlighted in an economic impact report newly released by the university.

The report is an update of a previous economic impact study, released in early 2007, that showed in fiscal year 2005 Cornell generated $3.070 billion throughout the state, including $561 million in research spending at its Ithaca campus and Weill Cornell Medical College in New York City.

In fiscal 2007, according to the current economic impact update, Cornell generated $3.317 billion statewide, an increase of 8 percent over two years. Cornell again led universities in the state in research expenditures, totaling $659 million.

While the updated report does not reflect the severe economic downturn that began in late 2008 or the actions the university has taken to reduce expenditures in the current fiscal year, Cornell's budget is highly diversified and the university projects it will sustain revenues at or near their historical levels for the foreseeable future.

"As one of the state's leading entrepreneurial universities with a $2.8 billion budget, Cornell is a critical resource in this period of economic upheaval to help the state to financial recovery," Cornell President David J. Skorton said. "Even while we're making fiscal adjustments to deal with the current economic situation, Cornell is the economic engine that supports our community as we continue to be a leading economic engine for the state. The actions we are taking now will sustain the university's financial strength over the long term."

Cornell has instituted hiring and construction pauses through June 2009 and is experiencing staff layoffs in some areas. Endowment spending will be reduced by 15 percent for the coming fiscal year. The university is cutting its base budget by $60 million for fiscal year 2010, with an additional $50 million budget correction planned for 2011.

At the same time, the upcoming Class of 2013 will have an additional 100 students and there will be increased charges for tuition, room and board. Trustees also allocated $35 million from the endowment for student financial aid.

“While we must take time to evaluate our current financial position, Cornell continues to operate as a community of more than 30,000 students, faculty and staff, undertaking cutting-edge research and providing vital services to the people of the state of New York. It is an outstanding area employer," said Stephen T. Golding, executive vice president for finance and administration. "While some of the multimillion-dollar construction projects that have generated intense economic activity on the Ithaca and New York City campuses have been put on hold, the need for them has not gone away and many of them will continue when financial conditions improve."

For the economic impact study, faculty and researchers in Cornell's Department of City and Regional Planning used a social accounting matrix and IMPLAN software to measure the multiplier effects of Cornell's direct and indirect spending.

Highlights from the March 2009 Cornell economic impact report are:

-- Of the $3.317 billion in economic activity Cornell generated throughout the state in fiscal 2007, $1.654 billion was in Central New York, $1.319 billion was in New York City and $344 million was in other areas of the state.

-- Cornell is the primary economic engine in its home, Tompkins County, adding more than 16,000 jobs and $1.1 billion in wages to the local economy through direct and indirect spending.

-- Cornell directly and indirectly generated $61.2 million in tax revenues for New York state and $32.2 million for local government in Tompkins County. Weill Cornell Medical College generated $44.2 million in tax payments to the state and $10.9 million to New York City government.

-- Cornell Cooperative Extension (CCE) is critical to the fulfillment of Cornell's land-grant mission, contributing more than $92 million in programs throughout the state in fiscal 2007. Its total economic impact on the state that year was $158 million. CCE volunteers gave more than 1.14 million hours of service to important community efforts statewide.

-- Cornell is also a national leader in sustainability. The report cites its research in green technology and CCE programs for local foods and sustainable agriculture that has an impact throughout the state.

-- During fiscal 2007, 10 existing New York state businesses licensed 22 Cornell technologies, allowing them to stay competitive and grow.

-- More than 170,000 visitors to the Ithaca campus spent approximately $47 million locally and directly supported 778 full-time equivalent (FTE) jobs in the county.

-- The Ithaca campus purchased $533 million in goods and services in fiscal 2007. A quarter of that, or $128 million, was spent in Tompkins County, and an additional $55 million was spent in surrounding counties in Central New York. Weill Cornell made $202 million in purchases in New York City.

-- In fiscal 2007, Cornell spent a total of $291 million with primary construction contractors: $179 million on projects for the Ithaca campus and $112 million on New York City projects. The construction projects generated 726 FTE jobs in Tompkins County. Weill Cornell construction created 888 jobs in New York City and an additional 77 FTE jobs elsewhere in the state.
"Cornell's updated fiscal 2007 economic impact study reaffirms the many ways Cornell's faculty, staff and students contribute to the quality of life for the citizens of New York state," said Joanne DeStefano, Cornell vice president for finance and CFO. "The study is intended to fulfill President Skorton's prior commitment to regularly report back to the citizens of New York state on how the university is using the resources it is provided to advance the public good."