The University of California, Davis, and its health system pump more than $2 billion a year into the state and regional economies, a figure that officials hope will convince politicians that deeper cuts to the higher education budget will damage more than the campus and classrooms.

In a study commissioned by UC Davis and released Thursday, economic consultants found the campus - one of 10 in the UC system - generated somewhere between $2.7 billion and $3.4 billion in the state in 2001-02.

Most of the UC Davis impact was concentrated in Yolo and Sacramento counties, where the campus and medical center are located and where most of its employees are concentrated, according to the report, which used data from 2001-02.

UC Davis employed more than 29,000 people in California; nearly 24,000 in the region.

"The impact of UC Davis is extreme and considerable," said Chancellor Larry Vanderhoef. "We have a very bright future that is better defined now because we can see the missing pieces.

"We knew we were big, but we just didn't know how big."

It's the first time UC Davis has done a comprehensive report about its economic impact.

Such reports have become an increasingly popular tool for universities seeking to raise private and corporate funds and are often touted by local economic development officials in their pitches to lure new business and industry.

Vanderhoef said the study is not linked to any strategy for raising funds, but will be useful in pleading UC's case to legislators as they shape next year's state budget. He also hopes the report will help campus officials find ways to beef up and improve its economic contributions.

"It won't just gather dust," he said.

Officials with California's three segments of higher education - UC, California State University and the community colleges - are planning to make the economy a central argument to lawmakers who must find a solution to a $16 billion shortfall in the coming fiscal year.

Higher education is one of the few areas of the state budget where legislators and the governor have discretion to make cuts.

"Higher education is the issue in this year's budget," said Assemblyman Darrell Steinberg, a Sacramento Democrat recently named Budget Committee chairman for the lower house. "It's central to our economic development strategy ... and this research needs to be used by advocates of higher education to make sure it remains the high priority that it's been in California."

Alexander Gonzalez, president of California State University, Sacramento, ordered a similar report late last year. He is using its findings, which showed that campus generated $743 million for the regional economy, in a fund-raising campaign to rebuild and remodel the aging campus.

Whether such studies - which generally place a positive spin on the role of universities in the economy - are of much value to the broader public is a subject of debate. UC Davis paid a San Francisco consulting firm $88,000 in nonstate funds for the report.

"I think there is a value in them," said Jack Kyser, an economist with the Los Angeles Economic Development Corp., who has done a similar report for UCLA. "People tend to look at a university and see buildings and students, but they don't usually understand all the other aspects."

Kyser said such reports also can be critical in helping prove that a region like Los Angeles - home to UCLA, the University of Southern California and California Institute of Technology - is a hub of brainpower and talent.

"We suffer from a problem in Southern California, where we are viewed as being a bunch of airheads," he said. "We've got three major research institutions here. When you can show very plainly that higher education is a basic industry, that brings new money into your economy."

The UC Davis study found the university and its medical center to be the second-largest employer in the region behind state government, paying out more than $961 million in salaries and wages to its employees statewide.

Most of the UC Davis payroll stays in the region and made a significant contribution to the $57.14 billion in personal income that the U.S. Bureau of Economic Analysis reported for 2001 in Sacramento, Yolo, El Dorado and Placer counties.

The report also showed large contributions from the university's health system. The UC Davis Medical Center and its clinics had 1 million patient visits and spent $7 million for free care for the poor. It also spent $137 million on treatments for Medi-Cal and indigent patients for which it was never reimbursed.

UC Davis is also a huge magnet for federal and private research dollars, hauling in more than $350 million in 2001-02, with nearly a third going to health-related research, according to the report. That same year, UC Davis researchers reported 98 inventions and 37 U.S. and 45 foreign patents issued.

Research dollars have continued to grow for the university; in 2002-03, it drew more than $420 million.

To view the full report, go to www.news.ucdavis.edu/economic_impact/.