The University of Montana helps drive Missoula’s economy, so as budget cuts and recent enrollment drops afflict campus, local industry will be affected as well.
“Clearly if there’s reduction of students or a reduction in payroll or economic activity at UM, that’s bound to have an effect on the larger community,” Missoula mayor John Engen said.
Western Montana’s largest single employer, UM, is planning for potential budget cuts in the next fiscal year. Reductions to the General Fund, which is comprised of state allocations and tuition revenue, may force school administration to eliminate certain jobs, classes or services — austerity measures sure to trickle across town.
“As an economist, you have to take into account the big picture,” UM’s Bureau of Business and Economic Research Director
Patrick Barkey said. In terms of direct economic impact, Barkey said this means the effects on local jobs.
UM directly employs 2,800 people in Missoula, divvying out $182 million in payroll and benefits each year, according to a 2010 report compiled by the BBER. Research programs rake in an additional $62 million in spending, and were responsible for 635 Missoula jobs in 2012, UM’s Vice President of Research and Creative Scholarship Scott Whittenburg said.
The impending cuts will eliminate some of these faculty jobs, specifically adjunct professor positions, although University officials have yet to release details. Whittenburg said he doesn’t expect to lose research jobs, but as employees retire, their positions may not be refilled.
Then come the indirect effects.
Each year incoming students flood Missoula with cash, spending, renting, buying and attracting visitors to town. According to the BBER report, aside from tuition, UM’s nonresident students spend a total of $49 million in Montana annually, with almost half of the money going to retail and trade goods. The 9,600 friends and family members who visit students every year generate an additional $5.4 million.
These estimates are based on surveys from 2008, when 3,456 nonresident students filled UM’s halls. Enrollment has dropped since then, falling by more than 700 students in fall 2012 alone, and currently only 2,303 out-of-staters study on campus.
Not only does this decline result in less beer sales or tuition revenue — nonresident students pay 45 percent of UM’s undergraduate tuition — but state funding is allocated based on enrollment trends as well.
All in all, it’s bad business for everyone.
“I don’t want to be so mercenary to call education sales,” Barkey said. “But on a financial level, that’s what’s going on. If there’s fewer students in Missoula, all of that spending on housing, healthcare, entertainment, you name it — that demand isn’t here.”
Walt Muralt, owner of Muralt’s Travel and the Broadway Inn receives a large part of his business from the University crowd.
“We see quite a few people going up and down on Highway 93 for school,” he said. “A blip on the map of the University is definitely a blip on the map for us.”
Just how big this blip will amount to, Muralt can’t be sure.
“I’m sure we have (lost business) because of the less students,” he said. “But it’s hard to measure. We don’t track why people come through our doors or where they come from.”
Property renters are also sensing a void.
“I was particularly affected,” president of the Western Montana Landlords Association Vickie Amundson said. Amundson rents 80 percent of her properties to students, and her largest asset is an apartment complex on East Broadway.
“This last fall was the first year that we weren’t full by the time school started,” she said.
A Missoula resident since 1963, Amundson said she’s never seen enrollment drop this suddenly, and she credits the national recession.
But as an economist, Barkey pointed out that when it comes to higher education admissions, the opposite is usually true.
Enrollment is often counter-cyclical to the boom-bust cycle of the economy, Barkey said. When more jobs are available, less people feel the need to attend college, and vice-versa.
Something else must be at play.
UM president Royce Engstrom has stated that concern over student safety in light of recent sexual assaults may be partially responsible.
Engen agreed with the Engstrom’s analysis. As a dedicated alumnus, Engen said he’s committed to helping improve UM in any way he can.
“I think it’s important to be aware that UM’s health and well-being is tied to the larger community,” he said. “It certainly isn’t my area of expertise ... but I know that folks will step up to help.”
Whatever the future holds, as rain storms pass over Missoula this spring, a cloud of fiscal austerity will remain, hovering, waiting to flood.
“It’s kind of like a mile wide and an inch deep,” Barkey said. “Some people might not notice it as much, but it’ll still be there from a numerical point of view.”