Businesses, town government and employees face tough times if the Northern Vermont University-Johnson closes, based on an analysis of the college’s economic impact.
For the Johnson village government, the college provides almost a third of electric, water and sewer revenue, and 13 percent of the town government’s total revenue this year.
A study by Northern Vermont University says the colleges have a $113 million economic impact on the economy in the Johnson and Lyndon areas. A big portion of that is spent at local businesses and on private housing.
A shutdown would leave a huge hole in the local economy, and the town government would be left holding the bag for things like water and sewer improvements that are paid off over a period of years.
The $113 million estimate comes from a standard method of figuring out the economic impact of a particular organization. It factors in money earned by employees and money spent by students, employees, visitors and the college, as that money washes through the economy. A college employee gets paid and goes grocery shopping. That money pays the store’s employees and its suppliers, who then do things such as buy cars, go to the movies and pay rent. The study claims that this results in a “conservative 2.5 multiplier” — NVU’s annual budget of $45.2 million has a net impact of $113 million. NVU has about 2,000 students, 70 percent of them Vermonters and 30 percent bringing in money from out of state that’s pumped into the local economy.
The study also says the colleges attract more than 18,000 visitors a year through meetings, recreational programs and other events, spending money in Lyndon and Johnson.
In Johnson, losing the college would mean higher water and sewer bills, higher property taxes and fewer public services.
Meredith Dolan, village manager, said electric, water and sewer bills are based on use, and the college pays 29 percent of total billing for the municipal electric utility, 29 percent of water fees and 34 percent of sewer fees.
The fees the college pays “wouldn’t go to nothing,” she said, but “it would represent a net loss for the village,” and Johnson would have to cope through cuts in services and higher fees for other customers to keep the systems running.
For the town government, the state pays about $350,000 to Johnson in lieu of property taxes, most of it for the college, said Brian Story, town manager.
Property values could also drop, shrinking the town’s grand list — the sum of all taxable property — and lead to higher taxes and less government services.
“People like living in Johnson for the public services,” Story said, and without the college, that appeal may decline.
“It looks pretty grim,” he said.
“There’s a lot of trickle-down; the loss of that college is huge,” said Eric Osgood, select board chairman.
He’s already heard from business owners having a tough time in the coronavirus shutdown, and he fears some won’t reopen at all.
John Mandeville, director of the Lamoille Economic Development Corp., said Johnson landlords would be hit hard.
“You’ve got to be talking about hundreds of dwellings in the town that have been occupied for years by students,” he said. If the college closes, who will live there?
Nearby businesses would suffer too, Mandeville said. Mountain resorts, restaurants, hotels and other businesses rely on college students to work there, and filling those jobs will be much harder if the students leave, he said.
And, looking to the future, the college supplies a steady stream of smart, well-equipped graduates, a talent pool for local businesses.
“If you really look into this and understand where all the tentacles lead, it boggles the mind,” Mandeville said.
What happens to employees?
When a large local employer in a rural area shuts down, the employees either retire early, find new jobs in the area, or move, said Art Woolf, a retired economics professor at the University of Vermont.
He recalled what happened in Island Pond, when Ethan Allen closed its furniture plant in 2001 and 125 people lost their jobs
“If you’re a maintenance worker, you could probably find another job,” he said. “The English professor who doesn’t have a job? That’s an entirely different issue.”
It’s possible that the empty campus buildings could be used for another purpose, but two decades later, the factory in Island Pond is silent.
That is already on the Johnson town manager’s mind.
“I hope that we would stabilize within a decade,” Story said. “We’re going to need to find a new anchor institution, and that’s an incredibly difficult thing to do.”