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An alliance of Michigan’s three largest higher education institutions has contributed $17.5 billion to the state economy, which has reverberated to every region in Michigan, according to the ninth annual Economic Impact Report of the University Research Corridor released Wednesday.

The alliance — made up of Michigan State University, the University of Michigan and Wayne State University — defined the impact as university expenditures on payroll and non-payroll items, spending by students at the three universities and incremental earnings by alumni during 2014 in its 2015 report. The impact was up 35 percent since 2007, when the first report was issued.

As a result of the economic impact, the report showed that total direct and indirect jobs was 68,514.

“While the main goal of these universities is not to generate economic impact and tax revenues for the state, it is noteworthy that the $17.5 billion in net economic impact is almost 22 times the state’s funding for URC universities,” the report said. “Additionally, the State of Michigan receives $499 million in tax revenue from URC employees and alumni that it would otherwise not receive if the URC universities were not located in Michigan.”

Michigan State University President Lou Anna K. Simon added the universities in the research corridor are critical to the world.

“The University Research Corridor’s impact extends far beyond the $17.5 billion that the three institutions bring to Michigan’s economy,” Simon said in a statement. “Every day, Michigan’s leading research universities are improving lives and enriching communities — regionally, nationally and globally.”

Critics, however, argue the report shows the universities are doing fine five years after massive state funding cuts to universities which they have never recouped.

“The universities are educating more students, they are more efficient in turning them into graduates, they are doing so at a higher cost but students and their parents are willing to bear the costs,” said James Hohman, fiscal policy analyst at the Mackinac Center for Public Policy. “The bottom line is our universities have adapted to work with lower appropriations from the state.”

But URC Executive Director Jeff Mason said it depends on the definition of “fine.”

“Our three universities still haven’t recouped the cuts that were put in place in 2011, so yes, they are being efficient and prudent with the dollars the state is investing,” Mason said. “But tuition continues to go up, the cost has shifted from the state to families and students. I don’t think that is a long-term, sustainable approach.”

The report, created by the East Lansing-based Anderson Economic Group, also showed the URC spent $2.1 billion on research and development, a slight decrease from the $2.12 billion from the previous year.

But it showed that 19 percent of URC graduates have founded or co-founded 380,000 business around the world, with about half of them started in Michigan.

“Michigan’s leading research universities continue to advance in research and direct economic impact on every county in the state,” Mason said . “The ninth annual Economic Impact Report demonstrates the collective power of the URC universities, which are highly competitive with the most respected clusters in the country.”

KKozlowski@detroitnews.com

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