MONMOUTH, Ill. — The growth of Monmouth College over the past decade has significantly benefited the economy of Monmouth and the surrounding area, according to a new study authored by Professor Rodney Lemon of the college’s political economy and commerce department.

The college’s growth, the study says, has led to the creation of more than 250 new area jobs, increased local property values by $7.5 million, expanded new housing and retail businesses, and enhanced governmental revenues through increased sales tax receipts. Additionally, the college has recently made direct financial contributions to the community, such as purchasing a tanker truck for the fire department and helping to fund new water mains. The city also benefits by collecting a $20 annual wheel tax for each student automobile.

Norm Walzer, director of the Illinois Institute of Rural Affairs, concurred with the study’s findings, stating, "Monmouth College is an economic asset to Warren County and western Illinois in general because of its ability to bring students from other parts of the country to this area. These students have a substantial direct impact on the local economy."

Since 1993, the college has experienced a 72 percent increase in enrollment, seen a 49 percent increase in employment, doubled its payroll and invested more than $50 million in campus improvements.

Increased enrollment has been the primary catalyst for most of the gains, Lemon said. In order to serve its expanding student body, the study notes that since 1993 the college has increased its number of full- and part-time employees from 169 to 245, with more than 92 percent living in the Monmouth community, and increased its payroll from $4.9 million to $10.7 million. In addition, employment by the college’s food service provider and bookstore has grown from 22 to 39, representing an additional $876,000 in wages. The average annual compensation of all college employees is 30 percent higher than the median household income within the community.

The new college employees generate new spending, business activity and employment within Monmouth and surrounding communities, and this process generates even more spending, more business activity and more employment. This multiplier process over time results in more than two new jobs created for each new job created at the college. Lemon estimates that 160 new jobs reside within the Monmouth community because of the college’s recent growth and 135 in surrounding communities.

According to the study, spending by students continues to be an important contributor to the local economy. "A college differs from many businesses which acquire material inputs and either resell them or combine them to sell another product…the college’s major input is students," Lemon explained. "These inputs have their own impact upon the community through their own spending, the spending by their friends and families when visiting in Monmouth, and by their participation within the community."

The study estimates that the typical student annually spends $1,116 in the community and has friends and family who visit campus multiple times during the year and also add to the total business activity. With nearly 1,200 students, this spending accounts for about $1.8 million annually in additional local revenues.

In addition, Lemon pointed out that the college currently spends approximately $2 million locally on supplies, and vendors who are located outside the community typically make use of local businesses for completing their tasks. "The college is not one office or manufacturing building with a large parking lot," he noted. "Rather, the college is a set of attractive, fairly high-maintenance buildings, carefully landscaped with parking and recreational facilities rivaling many public parks. This extra investment and maintenance also generates spending within the community that in turn generates additional spending."

In order to accommodate its growing student population, the college has needed to purchase nearby real estate for the construction of additional academic buildings, housing, parking and recreational facilities. Because that property is no longer on the tax rolls, the direct effect would seem to be a reduction in tax receipts. However, the indirect effect of the college’s growth has been an increase in the number of taxpayers, an increase in housing construction and an increase in the assessed valuation of real estate.

Over the past decade, the value of residential real estate within Monmouth Township has increased faster than the typical rate of non-metropolitan real estate in Illinois. The report concludes that at least 50 percent of this more rapid increase is directly attributable to the college’s growth. While college purchases have removed properties from the tax rolls, the study finds that the college’s growth has added nearly $7.5 million more in market value than it removed, and that, had the growth not occurred, Monmouth residents would have homes that would be worth less and would be paying a higher tax rate.

The college’s growth has also led to increased retail sales in the area, which have generated an increase in sales tax receipts, approximately 20 percent of which are returned to the city and county governments. And while concern long has been raised over the number of residents who tend to do their shopping in Galesburg and elsewhere, there have been signs of local retail recovery, including the expansion of stores such as County Market and Farm King, and the revitalization of the South First Street area, with specialty shops and restaurants. The study suggests that some of these may not have happened without the positive impact from the college’s growth.

The study points out that the college’s recent growth has increased sales tax revenues in Monmouth by approximately $235,000 annually, of which $46,000 is returned to city and county governments. Additionally, sales tax receipts in nearby communities have increased by more than $400,000, of which $85,000 is returned each year to local governmental units.

"More and more, we are recognizing the importance of institutions of higher education in rural areas because of the positive impact on quality of life as well as the employment generated by college operations, faculty, and students," Walzer concluded. "As we move further into the information age, institutions of higher education will play a substantive role in new job creation by helping residents upgrade their knowledge and skills to better participate in new economic opportunities."

Lemon, who holds a Ph.D. in economics from the University of Illinois, has been a member of the Monmouth faculty since 1976. He also has worked extensively in formulating energy policies and the current structure of the natural gas industry within the United States and in several other countries.

Released by the Office of College Communications
Barry McNamara, Associate Director of College Communications
Phone: 309-457-2117
Fax: 309-457-2330