Rutgers—Return on Investment

Richard L. McCormick, President
As submitted; edited versions were published in The Philadelphia Inquirer on
May 19, 2004 and The Home News Tribune on May 20, 2004

Next time you ride NJ Transit, play golf on a manicured green, eat a juicy red tomato, Ask Jeeves for an Internet address, or fill a prescription for antibiotics, think of Rutgers. All these activities depend on science and technology developed at the State University of New Jersey. And all represent crucial contributions to New Jersey’s economy.

Most people know that Rutgers educates tomorrow’s leaders, creates new knowledge and helps improve the lives of New Jersey’s citizens. But not everyone realizes how important the university is to the state’s continuing prosperity, both through the products it develops and the monies it spends.

A new report compiled by the university, “ Rutgers – Return on Investment: The Economic Benefits to the Citizens of New Jersey,” provides the details.

The report demonstrates that for every dollar Rutgers receives from the state, the university channels five dollars back into the state’s economy. In 2003, for instance, the state’s $524 million investment in the university resulted in direct and indirect spending of an estimated $2.8 billion. This included:

  • $1 billion in university expenditures, including employee compensation, university purchases and capital improvements;
  • $403.7 million in spending by students and visitors for food, housing, transportation and other living expenses;
  • $67.4 million in New Jersey income, sales and property tax revenue paid by Rutgers employees, students and visitors; and
  • $148.9 million contributed by Rutgers faculty and staff to the state’s credit base through mortgage payments and pension-plan contributions.

In addition, the university brought to New Jersey $258.6 million through externally funded research and sponsored programs and $5.4 million from 84 technology licensing agreements.

While university revenues, spending and technology transfer make important contributions to the state economy, Rutgers’ economic impact goes well beyond what these initial figures suggest. Take, for example, the NJ Transit railroad ties now made from soda bottles and other plastic recyclables using a cost-effective process developed by Rutgers engineers. Not only did the technology lead to a highly durable and environmentally friendly construction material, it also spawned a prosperous spin-off company, Polywood, which employs 30 New Jerseyans and projects sales of $5 million this year alone. At the same time, by reusing throwaway plastics, the technology is helping to alleviate a major waste-disposal headache that saps municipal resources and strains overflowing landfills.

Or look at Rutgers’ capital expenditures. In 2003, funding for approved multiyear capital improvement projects at Rutgers exceeded $276 million, much of it for use in downtown Newark, Camden and New Brunswick. This expenditure will initially generate a considerable number of construction jobs and large equipment purchases, but its long-range impact on the revitalization of these urban areas may be even more significant for economic growth.

In fact, Rutgers, one of New Jersey’s largest employers, contributes to the state’s economic prosperity in myriad ways. Approximately 10,000 people graduate from the state university each year and enter New Jersey’s highly skilled workforce. The university then continues to update the skills of these professionals, offering more than 2,000 courses annually in some 232 New Jersey municipalities. Rutgers’ programs throughout the state provide sound guidance to government officials, key policy-makers, K-12 teachers, farmers, small-business owners and ordinary citizens. Last year alone, Rutgers Cooperative Extension, which operates in all 21 New Jersey counties, provided 34,000 in-person consultations and answered 50,000 e-mail and phone inquiries.

So next time you think of Rutgers, certainly think of the excellent education we provide to New Jersey’s brightest students, the scientific and technological discoveries we make, and the services we offer to both urban and rural communities. But also realize the substantial economic benefits of having a great public research university devoted to the needs of your state. You will then have a truly comprehensive picture of Rutgers’ value to the Garden State and a better understanding of why it takes a strong state university to keep New Jersey’s economy humming.