Potential Economic Impacts in Centre County of Zero Funding for Agricultural Research and Extension Programs

The potential loss to Penn State's College of Agricultural Sciences of the $50.5 million in Land Scrip Funds would have a significant negative economic impact in Centre County, the home of Penn State's College of Agricultural Sciences, and the base for Penn State's statewide agricultural research and extension activities.

The loss would lead to forfeiture of an additional $91 million of funds from other sources that the college would have received, including $22 million of USDA capacity funds, $56 million in competitive grant funding, and $13 million of county funds. The University estimates that approximately 354 of the potential 1,108 statewide layoffs would occur within Centre County, including 8 administrators, 140 department faculty, 17 extension associates, 7 extension educators, and 182 support staff.

Analysis using the economic impact model IMPLAN, which is the most widely used economic impact tool, suggests that the impact of these 354 layoffs and the lost funding in the county would be an additional 308 to 324 jobs lost in the county, for a total loss of between 662 and 678 jobs in Centre County. In addition, estimates of the total income lost to Centre County's economy range from $126.9 million to $128.6 million.

Potential Immediate Economic Impact in Centre County from Layoffs and Downsizing in the College of Agricultural Sciences
Impact TypeJob LossesLoss of Economic Activity in Centre County
Direct Effect 354 $79.2 million1
Indirect Effect (in firms and organizations with which the College does business) 192-203 $32.4-$34.6 million
Induced Effect (in businesses due to loss of spending by laid off employees) 116-121 $14.7-$15.2 million
Total Effect 662-678 $126.9-$128.6 million

1This estimate assumes loss of Land Scrip and USDA Capacity funds in Centre County's economy are proportional to the expected layoffs across Pennsylvania, and that all competitive grant dollars go through Centre County. The calculations do not include the loss of Centre County government's contributions towards the county's extension office.

These estimates focus solely on the loss of operational spending by the college within Centre County; the county would experience additional economic losses with the cessation of the College's extension programming and research activity, which makes important contributions to the economic viability of agricultural and other sectors of Centre County's economy.

Prepared by: Timothy W. Kelsey, Ph.D, and Stephan J. Goetz, Ph.D.
March 10, 2016