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Study says Anne Arundel graduating classes contribute $1.8 billion to economy

By Joe Burris, The Baltimore Sun

6:19 PM EST, March 6, 2014

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Every year Anne Arundel County high school seniors leave the graduation stage with diplomas — and considerable moneymaking potential — in hand.

According to a new study commissioned by the county Board of Education, they aren't the only ones poised to make money. In fact, the study suggests that every graduating class in Anne Arundel contributes more than $1.8 billion in value to the local economy.

Officials say that figure shows that an investment in education reaps huge, immediate dividends for the community.

School board members promote the results of the $19,800 study, conducted by the Business Economic and Community Outreach Network at Salisbury University, whose officials say they've done similar studies for each county along the Eastern Shore.

Anne Arundel officials say the results show the school system — which some say is often criticized for absorbing a large part of the county's annual operating budget — gives back in quantifiable ways. Study results were announced at Wednesday's school board meeting.

"Funding directed toward our school system is a solid and sound investment in the future of our county," said board President Teresa Milio Birge in a news release after the meeting. "This report … underscores the importance of that investment, and the enormous benefit that our graduates are to our county as a whole."

BEACON director Memo Diriker said the study probed such factors as the school system's economic and employment impact, the value of its degrees and the effect of the school system on economic development in terms of construction.

According to the study, every dollar in operational budget spending by the school system results in total local spending of $1.36, and every dollar in capital budget spending results in $1.48 in local spending.

The study said each graduating class adds $149 million to real property values and $1.41 million to real property taxes.

Also, members of each high school graduating class will earn an additional $1.4 billion over their lifetimes and generate an additional $25 million in county income taxes, according to the study.

Diriker said the study also probed "leakage" — money that winds up going to employees and vendors outside of the county because of people who do business in one county but work in another.

He said having an educated workforce pays dividends and that Anne Arundel County needs to do more to retain its graduates and encourage those who have moved outside the county to return.

"This county is about in the middle in terms of return on investment," Diriker said.

"If a little bit more of the former graduates can be brought back the impact would be even better," he said. "In Talbot County, for example, a lot of their employees cannot afford to live in that county, the salaries they make gets spent in Dorchester County or Caroline County [where many reside]. In a variety of jurisdictions, the concept of affordable housing is a big issue."

School board member Amalie Brandenburg said she proposed the study to school officials last year, when the often tenuous relationship between the school system and county government began shifting amid a transition in county government. The study was launched in October.

"When this whole idea came about, there was a significantly different political climate than there is now," Brandenburg said. "The idea was to have people understand that it's an investment you're making to the county."

The school system's chief operating officer, Alex Szachnowicz, said officials now have the means of showing lawmakers that funding for schools pays off.

"We're in budget season now; they've got many different departments coming to them asking them for funding and support," Szachnowicz said. "Part of it also is to give the policymakers the data when making decisions about where to allocate the discretionary dollar."

But Anne Arundel County Councilman Dick Ladd gave the study and its findings a mixed review.

"I accept it's a reasonable model of projecting what the effect is of how [officials] spend additional dollars. What it does not say, in my opinion, is what are the other alternatives that may exist within the county," Ladd said. "There are other investment opportunities that we may have other than education."

jburris@baltsun.com