1) The document analyzes the fiscal impact of education levels on state revenues and expenditures. 2) It finds that households headed by individuals with higher education levels earn more and pay more in taxes, contributing over half of income tax revenues. 3) It estimates that if 10,000 people attained a 4-year college degree rather than only a high school diploma, state revenues would increase by $8 million annually while expenditures on welfare, health plans, unemployment insurance, and corrections would decrease by $9 million, yielding a net annual gain of $17 million.

1. The Fiscal Return on Education Joe Cortright March 2010

3. Revenue

4. Education & Income Oregon household income by education of household head, 2008

5. Distributions

6. Taxes & Attainment Educational Level of Household Head Median AGI Tax Rate Total Tax Less than HS 23,500 4.1% 1,000 High School Diploma 38,900 4.5% 1,800 1 to 3 Years of College 45,700 4.6% 2,100 4 Year Degree or Higher 64,800 4.8% 3,100

7. Most Taxes Come from Well Educated Educational Level of Household Head Households Income Taxes Less than HS 5.5% 1.8% High School Diploma 24.5% 15.7% 1 to 3 Years of College 34.0% 29.0% 4 Year Degree or Higher 36.0% 53.4%

8. Expenditure

9. Health Plan

10. Welfare

11. Unemployment Insurance

12. Corrections

13. A Thought Experiment

14. What if? What if we moved 10,000 people from the category “high school graduate” to the category “four year college graduate”? What would be the effect on state revenues? What would be the effect on state expenditures?

18. The Fiscal Return on Education Joe Cortright January 2010