Study Shows MCPS has Significant Economic Impact on County and State Economies

February 26, 2015

MCPS’ capital and operating budgets responsible for more than 30,000 jobs in the state and $711 million in income for residents of Montgomery County

In a new study of the economic benefits of the proposed Fiscal Year 2016 Capital and Operating Budgets, noted economist Dr. Stephen Fuller concludes that the investments in Montgomery County Public Schools (MCPS) would contribute more than $3 billion to the local economy and support more than 20,000 jobs in the state of Maryland and more than 9,200 jobs in Montgomery County.

The study finds that no private sector employer has a greater impact on the county’s economy than MCPS, which is the county’s third most important source of economic activity after the federal government and the rest of the county government at large. (Read Dr. Fuller's report)

“As a result of these direct and indirect (and induced) economic benefits, MCPS is one of the County’s largest “businesses” accounting for more than four percent of Montgomery County’s employment base and its gross county product,” Fuller wrote in his report.

“MCPS has always earned a strong return on our community’s investment in terms of academic performance,” said Patricia O’Neill, president of the Board of Education. “What this study does is demonstrate that for every dollar our community invests in MCPS, there is a significant economic benefit as well. For every dollar that is invested, we generate $1.50 for the state economy.”  

The study by Fuller, the Dwight Schar Faculty Chair and University professor and the director of the Center for Regional Analysis at George Mason University, analyzed the full economic impact the combined $2.738 billion FY 2016 MCPS construction and operating budget requests would have on Montgomery County.  The total proposed MCPS outlays would:

  • contribute $3.264 billion to the Montgomery County economy;
  • generate $711 million in new personal earnings to the benefit of workers residing in Montgomery County beyond the direct payroll payments to MCPS employees included in the budget; and,
  • support a total of 17,388 full-time, year-round jobs locally and elsewhere with an estimated 9,282 or 53.4 percent of these jobs being held by workers residing in Montgomery County.

When considering the impact of the MCPS capital and operating budgets on the larger Maryland economy, the report found that the combined MCPS capital and operating budgets would:

  • contribute $4.118 billion to the state’s economy (Gross State Product) reflecting a total multiplier of 1.50;
  • generate $1.274 billion in new personal earnings—wages and salaries—to the benefit of workers residing in the state; and
  • support a total of 30,657 jobs with an estimated 20,635,  or 67.3 percent, of these jobs being held by Maryland residents.

Later this week, the Board will submit its $2.39 billion FY 2016 Operating Budget Request to the Montgomery County Executive and the Montgomery County Council for consideration. The Board’s request includes a 4 percent increase in spending that will allow the district to manage its enrollment growth and meet ongoing salary, benefit and business costs. The budget request—99 percent of which supports the same level of service MCPS provides now—also includes about $2.5 million in strategic enhancements to address specific areas of need in the budget.

Due to a reduction in state funding, the Board’s budget is about $10 million less than the superintendent’s recommendation released in December. Given concerns about the county’s fiscal situation, MCPS is also preparing for additional cuts. For instance, as the district allocates positions for the 2015-2016 school year, more than 350 positions that are in the Board’s budget request will not be provided to schools, including vital teaching and support positions.

The Board of Education submitted its $323.8 million FY 2016 Capital Budget Request to the Montgomery County Executive and the Montgomery County Council in November. It includes funding to accelerate the timeline on dozens of projects that would provide much-needed classroom space for MCPS. The Board, along with the County Executive and the County Council, are seeking additional funds from the Maryland state legislature to help meet the space needs of MCPS, the state’s fastest-growing district.

Read the Report

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