The Economic Impact of A State University on the Local Community - The Case of the University of Tennessee

Abstract

There is a tendency that the relationships between the university and the surrounding community have not been fully understood as they ought to be. To the community, the university may be a source of pride, entertainment, low-cost labor, and revenue. But the university may also be regarded as a source of expense. It occupies tax-exempt property and land; it benefits from such tax-supported services as fire and police protection; some of its operations may compete with local business. The purpose of this paper is to examine the mutuality of interests between the university and the local community and to evaluate whether it contributes to the prosperity of the surrounding community to have a university in its midst. This paper attempts to measure, at the empirical level, the economic benefits which accrue to the local area as a result of university outlow of funds. It is also hoped that the contents of this paper may constitute a meaningful guide for authorities interested in finding out whether there should be more or less local and state funding and taxation. The City of Martin, Weakly and Obion Counties in Tennessee, and the City of Fulton in Kentucky are the main subjects of the present study. The University of Tennessee at Martin(UTM), founded just over 70 years ago, is a state-supported university and is situated in Northwest Tennessee. Its cash budget for the 1976-77 fiscal year was over $13.6 million.