|Associated Builders and Contractors (ABC) today praised President Trump for taking important steps to create a pro-growth business environment in a statement from ABC President and CEO Michael Bellaman.
“In his first 100 days in office President Trump has taken needed action to free business owners from unnecessarily burdensome regulations that have long hindered economic growth. ABC appreciates President Trump’s executive orders curbing Washington’s appetite for over regulation and collaboration with Congress to eliminate illegal and duplicative Obama administration regulations like the ‘blacklisting’ and ‘Volks’ rules.
“By valuing input from industries harmed by regulations that are often well-intentioned, but poorly crafted, President Trump can ensure a well-trained, safe and productive workforce without needlessly hindering economic growth. ABC’s 21,000 member companies employ a skilled and highly trained workforce ready to rebuild our nation, and we look forward to continuing to work with the Trump administration to fulfill his election night commitment to ‘fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals.’ President Trump can also ensure ‘every single American will have the opportunity to realize his or her fullest potential,’ as he pledged on election night, by taking executive action to ensure that discriminatory project labor agreements cannot be mandated on projects funded by federal tax dollars.”
The U.S. economy’s performance slowed in the first quarter of 2017, but nonresidential fixed investment expanded at an impressive 9.4 percent seasonally adjusted annual rate, according to analysis of U.S. Bureau of Economic Analysis data released today by Associated Builders and Contractors (ABC).
Real gross domestic product (GDP) expanded 0.7 percent on a seasonally adjusted annualized rate during the first three months of the year. Despite the subdued growth, GDP has now expanded in every quarter over the past three years. Fourth quarter 2016 growth was revised upward from a 1.9 percent annual rate of expansion to a 2.1 percent annual rate.
This represents the best quarter for nonresidential fixed investment, a category closely aligned with construction and other forms of business investment, since the end of 2013 and ends more than a year of tepid nonresidential fixed investment growth. Investment in structures, a subcomponent of nonresidential fixed investment, expanded 22.1 percent for the quarter after contracting by 1.9 percent in the fourth quarter of 2016. The other two subcomponents of nonresidential fixed investment—equipment and intellectual property products—expanded at a 9.1 percent rate and a 2.0 percent rate, respectively.
“It was expected that first quarter GDP would indicate that the U.S. economy remained unable to generate a high rate of growth,” said ABC Chief Economist Anirban Basu. “Many economic actors appear to have adopted a cautious attitude in an environment characterized by a considerable amount of policy uncertainty. The decline in defense expenditures is likely to be a surprise to many given recent discussions about supposed vast increases in defense outlays.
“The investment in nonresidential structures during the first three months of the year is particularly remarkable in an environment otherwise characterized as generating little economic growth,” said Basu. “Rather than adopt a wait-and-see attitude, developers appear to have acted with conviction, taking advantage of growing confidence among investors and other market participants to forge ahead with planned projects. While the new presidential administration has yet to implement even a small fraction of its pro-business agenda, the development community continues to express confidence in the administration’s ability to create the conditions necessary for a much more vibrant U.S. economy.
“The expectation is that the balance of the year will be associated with much more rapid growth,” said Basu. “Consumer spending should pick up after a weak first quarter, given accelerating wage increases and elevated levels of job security. Business spending is also likely to expand briskly, particularly if the Trump administration is able to make meaningful progress on the corporate and personal income tax front.”
The strongest labor market in a decade bodes well for the Class of 2017, but young workers, including college grads, still face a challenging labor market relative to older workers.
Temper Those Graduation Party Plans
The Class of 2017 looks set to graduate into the strongest labor market in a decade. The unemployment rate has fallen to its lowest level since before the recession while labor force participation has stabilized despite the aging population. But how does the labor market for young workers measure up?
College graduates have typically had more success in the labor market, hence the willingness of many college-goers to take on debt in order to finance their education. The unemployment rate for all college grads has averaged less than half that of the overall unemployment rate over the past two decades. For young college graduates, however, the right job is not always found quickly. Historically, the unemployment rate for college grads under the age of 25 has run closely in line with the headline unemployment rate. Yet over the past year, the unemployment rate for young college grads has been little changed (top chart).
The stubbornly higher rate of joblessness for young degree holders over the past few years has likely been in part due to greater labor force attachment. Since the onset of the Great Recession in 2008, the labor force participation rate for college grads 20-24 years has fallen less than the overall participation rate.
Nevertheless, there are other signs that young workers, including college grads, still face a relatively daunting labor market. Under-employment remains more pervasive for young workers. In terms of hours, 20-24 yearolds are most likely to find themselves employed part time despite wanting full-time work (middle chart). Others find themselves overqualified for the job they hold. According to data from the New York Fed, 43 percent of college grads ages 22-27 are in jobs that do not typically require a degree compared to 34 percent of all college grads.
At the same time, wage growth among young workers embarking on a career continues to lag. Whereas teenagers have benefited from higher minimum wage laws, median weekly earnings for 20-24 year olds has trailed other age groups since the past recession (bottom chart).
The slow rate of earnings growth for young workers stands to exacerbate the student debt challenges faced by college-goers. However, while debt burdens continue to climb with each successive class (the Institute for College Access & Success estimated the average debt burden for the Class of 2015 at $30,100), there are indications that borrowers are having a slightly easier time coping. The share of federal loans currently in repayment—both in terms of dollars outstanding and number of recipients—has increased over the past year, while delinquency rates have edged lower. That may have more to do with the growth in income-based repayment plans, however, than the (slowly) improving labor market. Over the past year, the number of federal loan recipients on income-driven plans has risen by 1.37 million while falling slightly for non-income based plans.
Source: U.S. Department of Labor and Wells Fargo Securities
Company’s Power Systems headquarters at Port of Iberia will retain 130 existing jobs
Today, Gov. John Bel Edwards and General Product Support Manager Troy Matherne of Louisiana Machinery Company announced the company will add 60 jobs and expand its New Iberia operations. Known as Louisiana Cat, the company rebuilds and services engines and related equipment for marine, oil and gas, industrial and utility companies at the Port of Iberia.
Louisiana Cat’s expansion calls for the addition of 60 new direct jobs over the next five years, with the jobs carrying an average annual salary of $60,000, plus benefits. Louisiana Economic Development estimates the project also will result in 28 new indirect jobs, for a total of 88 new jobs in Iberia Parish, Acadiana and the surrounding regions. A total of 130 existing jobs at the Iberia Parish company will be retained.
“Service companies are vital to our energy industry in Louisiana, and Louisiana Cat does important work for customers across coastal Louisiana,” Gov. Edwards said. “This expansion is a signal that better times are ahead in our oilfield communities. The 60 new jobs added to an already strong company in Iberia Parish will be a welcome addition for the local economy there. I congratulate the regional and local groups that worked with the State of Louisiana to put this project together.”
To make the expansion possible, an 8-inch natural gas pipeline to the port area will be installed by Atmos Energy at a cost of $1.2 million. The pipeline lateral is being funded through a partnership of state, local and private partners.
“Our state-of-the-art, engine-rebuild facility and dynamometer test cell will enhance Louisiana Cat’s worldwide support for customers working in the oil and gas, marine, industrial and electric power industries,” Matherne said. “We are extremely excited with the efforts of multiple agencies that have come together to provide funding of this new gas line. The financial support and clearance for additional natural gas infrastructure enables us to complete this important expansion project.”
To secure the project, Louisiana Economic Development will contribute $450,000 toward the cost of the pipeline through an Economic Development Award Program payment. The performance-based award from LED is contingent on Louisiana Cat meeting required hiring and payroll benchmarks; the company would have to reimburse the state if fails to meet and retain its requirements. Louisiana Cat, the port and Iberia Parish government each will contribute $250,000 toward the cost of the pipeline installation. The company also plans to utilize Louisiana’s Quality Jobs Program.
“This expansion project will bring many new jobs and opportunities to our parish,” Iberia Parish Council Chairwoman Natalie Broussard said. “It will open the door for future economic growth with the possibilities of even more jobs and increased revenues for our community. In this day and age of economic struggles, this is great news for Iberia Parish.”
“Louisiana Economic Development was instrumental in making this important project happen,” Port of Iberia Executive Director Craig Romero said. “The expansion project at Louisiana Cat will be good for our local economy, and the addition of the new natural gas line will have the added benefit of increasing opportunities for other companies here at the port.”
About Louisiana Machinery
Louisiana Machinery Company, doing business as Louisiana Cat, has provided products, parts and service of the highest quality to its customers in Louisiana for more than 80 years, and is one of the oldest Caterpillar dealers in the U.S. The company sells the complete line of Caterpillar construction, material handling and forestry equipment statewide and rents equipment through its Louisiana Rents locations. Louisiana Cat’s Power Systems Division designs and builds customized diesel and natural gas engine packages for marine, petroleum, industrial and electric power needs, both onshore and offshore. Louisiana Cat parts and service support programs help customers maximize their uptime and minimize their cost of operations. For more information, visit www.louisianacat.com.
Kansas Motorists Lose $2.7 Billion Per Year On Roads That Are Rough, Congested & Lack Some Safety Features – As Much As $1,600 In Some Areas. Kansas’ Ability To Repair And Improve Transportation System Hampered By $2.4 Billion Transfer Of Highway Funds To State General Fund From 2011 To 2017.
Roads and bridges that are deteriorated, congested or lack some desirable safety features cost Kansas motorists a total of $2.7 billion statewide annually – as much as $1,600 in some urban areas – due to higher vehicle operating costs, traffic crashes and congestion-related delays. The ability of the Kansas Department of Transportation to repair and improve the state’s transportation system has been hampered by the transfer of $2.4 billion in state highway funds to state general funds between FY2011 and FY2017, according to a new report released today by TRIP, a Washington, DC based national transportation organization. Governor Sam Brownback’s FY 2018/FY 2019 budget proposal would increase transfers of state highway funds to state general funds and other state agencies to $3.4 billion from FY 2011 to FY 2019.
The TRIP report, “Kansas Transportation by the Numbers: Meeting the State’s Need for Safe, Smooth and Efficient Mobility,” finds that throughout Kansas, more than one-third of major, locally and state-maintained urban roads are in poor or mediocre condition and nine percent of Kansas’s locally and state-maintained bridges are structurally deficient. The state’s major urban roads are becoming increasingly congested, with drivers wasting significant amounts of time and fuel each year. Kansas’ rural roads have a traffic fatality rate four-and-a-half times higher than on all other roads.
Driving on Kansas roads costs the state’s driver $2.7 billion per year in the form of extra vehicle operating costs (VOC) as a result of driving on roads in need of repair, lost time and fuel due to congestion-related delays, and the costs of traffic crashes in which the lack of adequate roadway safety features likely were a contributing factor. The TRIP report calculates the cost to motorists of insufficient roads in the Johnson/Wyandotte County, Topeka and Wichita urban areas. A breakdown of the costs per motorist in each area along with a statewide total is below.
The TRIP report finds that 37 percent of Kansas’ major locally and state-maintained urban roads and highways have pavements in poor condition and 26 percent are rated in mediocre condition. Thirteen percent of the state’s major urban roads are in fair condition and the remaining 24 percent are rated in good condition. Driving on rough roads costs Kansas drivers an additional $1 billion each year in extra vehicle operating costs, including accelerated vehicle depreciation, additional repair costs, and increased fuel consumption and tire wear. The report found that deferring maintenance on roads and highways can greatly increase long-term repair costs, with each dollar of deferred maintenance on roads and bridges being found to cost an additional $4 to $5 in needed future repairs.
“The economic vitality of our state depends on Kansas commerce, which in turn relies on safe and well-maintained roads and bridges,” said Rodney George, senior vice president of The Benning State Bank. “Our customers, many of which are farmers who need to get their products to market, depend on good roads every day. The financial stress of an underfunded infrastructure program impacts many more businesses and people than just road and bridge construction companies. Kansas citizens deserve a well-funded and sustainable roads program.”
Traffic congestion throughout the state is worsening, costing the state’s drivers $1 billion annually in lost time and wasted fuel. Traffic congestion robs commuters of time and money and imposes increased costs on businesses, shippers and manufacturers, which are often passed along to the consumer.
Nine percent of Kansas’ bridges are structurally deficient. A bridge is structurally deficient if there is significant deterioration of the bridge deck, supports or other major components. Structurally deficient bridges are often posted for lower weight or closed to traffic, restricting or redirecting large vehicles, including commercial trucks and emergency services vehicles.
Traffic crashes in Kansas claimed the lives of 1,881 people between 2011 and 2015, an average of 376 fatalities per year. Kansas’s overall traffic fatality rate of 1.13 fatalities per 100 million vehicle miles of travel is the same as the national average.
“Our Chamber members and Johnson County voters recognize the importance of a quality, well-maintained, comprehensive transportation network of highways, roads and bridges throughout the state of Kansas,” said Tracey Osborne, president of the Overland Park Chamber of Commerce. “They understand that the speed, reliability, capacity and overall effectiveness of the state’s transportation system are crucial not only for quality of life for our residents, but also for job creation, economic development, and business retention and expansion in Kansas. We are all concerned with delays in previously approved projects as well as significant curtailment of regular maintenance of highways and bridges throughout the state as a result of the diversion of funds from the Kansas Highway Fund and the deterioration of the quality of our highways and bridges. This work will only become more expensive with time, costing us more the longer it is put off; thus, we strongly support protecting existing transportation funding sources at the state level and a federal multi-year funding plan for the nation’s surface transportation infrastructure.”
The efficiency and condition of Kansas’s transportation system, particularly its highways, is critical to the health of the state’s economy. Annually, $395 billion in goods are shipped to and from sites in Kansas, mostly by truck. Eighty-two percent of the goods shipped annually to and from sites in Kansas are carried by trucks and another 12 percent are carried by courier services or multiple mode deliveries, which include trucking.
“The condition of Kansas’s transportation system will worsen in the future as additional monies are diverted away from the highway fund, leading to even higher costs for drivers,” said Will Wilkins, TRIP’s executive director. “In order to promote economic growth, foster quality of life and get drivers safety and efficiently to their destination, Kansas will need to make transportation funding a top priority.”
KANSAS TRANSPORTATION BY THE NUMBERS:
Meeting the State’s Need for Safe, Smooth and Efficient Mobility
Ten Key Transportation Numbers in Kansas
|Driving on deficient roads costs Kansas motorists a total of $2.7 billion annually in the form of additional vehicle operating costs (VOC), congestion-related delays and traffic crashes.|
|Johnson/Wyandotte Counties – $1,596
Topeka – $1,453
Wichita – $1,597
|TRIP has calculated the cost to the average motorist in the state’s largest urban areas in the form of additional VOC, congestion-related delays and traffic crashes. Drivers in the state’s largest urban areas incur annual costs as a result of driving on deficient roads as follows: Johnson/Wyandotte Counties – $1,596; Topeka – $1,453; Wichita – $1,597.|
|The ability of the Kansas Department of Transportation (KDOT) to repair and improve the state’s transportation system has been hampered by the transfer of $2.4 billion in state highway funds to state general funds and other state agencies between fiscal year 2011 and fiscal year 2017. Governor Sam Brownback’s FY 2018/FY 2019 budget proposal would increase transfers of state highway funds to state general funds and other state agencies to $3.4 billion from FY 2011 to FY 2019.|
|Vehicle miles traveled (VMT) in Kansas increased by 14 percent from 2000 to 2016 –from 28.1 billion VMT in 2000 to 32.1 billion VMT in 2016. By 2030, vehicle travel in Kansas is projected to increase by another 15 percent.|
|4 1/2 X||The fatality rate on Kansas’ rural roads is approximately four-and-a-half times greater than the fatality rate on all other roads in the state (2.24 fatalities per 100 million VMT vs. 0.50).|
|Thirty-seven percent of Kansas’ major urban roads are in poor or mediocre condition. Eight percent are in fair condition and the remaining 56 percent are in good condition.|
|$1 = $4 to $5||Every $1 of deferred maintenance on roads and bridges has been found to cost an additional $4 to $5 in needed future repairs.|
|Nine percent of Kansas’ bridges are structurally deficient, meaning they have significant deterioration to the major components of the bridge.|
|Johnson/Wyandotte Counties – 39 hours
Topeka – 16 hours
Wichita – 35 hours
|Mounting congestion robs drivers of time and fuel. Annual time wasted in congestion for drivers in the state’s largest urban areas is as follows: Johnson/Wyandotte Counties – 39 hours, Topeka – 16 hours, Wichita- 35 hours.|
$1.00 = $5.20
|The Federal Highway Administration estimates that each dollar spent on road, highway and bridge improvements results in an average benefit of $5.20 in the form of reduced vehicle maintenance costs, reduced delays, reduced fuel consumption, improved safety, reduced road and bridge maintenance costs, and reduced emissions as a result of improved traffic flow.|
The rate of economic growth in Kansas, which is greatly impacted by the reliability and condition of the state’s transportation system, has a significant impact on quality of life in the Sunflower State. Yet, the ability of Kansans to reap the quality of life and economic benefits of a well-maintained, safe and efficient transportation system is threatened by the continued diversion of state highway funds to the state’s general fund.
An efficient, safe and well-maintained transportation system provides economic and social benefits by affording individuals access to employment, housing, healthcare, education, goods and services, recreation, entertainment, family, and social activities. It also provides businesses access to suppliers, markets and employees, all critical to a business’ level of productivity and ability to expand. Reduced accessibility and mobility – as a result of traffic congestion, a lack of adequate capacity, or deteriorated roads, highways, bridges and transit facilities – diminishes a region’s quality of life by reducing economic productivity and limiting opportunities for economic, health or social transactions and activities.
With an economy based largely on manufacturing, agriculture and natural resource extraction, the quality of Kansas’ transportation system plays a vital role in the state’s economic growth and quality of life.
In this report, TRIP looks at the top transportation numbers in Kansas as the state addresses modernizing and maintaining its system of roads, highways, bridges and transit.
COST TO KANSAS MOTORISTS OF DEFICIENT ROADS
An inadequate transportation system costs Kansas motorists a total of $2.7 billion every year in the form of additional vehicle operating costs (VOC), congestion-related delays and traffic crashes.
- Driving on rough roads costs Kansas motorists a total of $1 billion annually in extra vehicle operating costs. Costs include accelerated vehicle depreciation, additional repair costs, and increased fuel consumption and tire wear.
- Traffic crashes in which roadway design was likely a contributing factor costs Kansas motorists a total of $730 million each year in the form of lost household and workplace productivity, insurance and other financial costs.
- Traffic congestion costs Kansas motorists a total of $1 billion each year in the form of lost time and wasted fuel.
- The chart below details the average cost per driver in the state’s largest urban areas and statewide.
POPULATION, TRAVEL AND ECONOMIC TRENDS IN KANSAS
The rate of population and economic growth results in increased demands on a state’s major roads and highways, leading to increased wear and tear on the transportation system.
- Kansas’ population reached approximately 2.9 million residents in 2016, an eight percent increase since 2000. Kansas had approximately 2 million licensed drivers in 2015.
- Vehicle miles traveled (VMT) in Kansas increased by 14 percent from 2000 to 2016 –from 28.1 billion VMT in 2000 to 32.1 billion VMT in 2016. From 2013 to 2016, VMT in the state increased by six percent.
- From 2000 to 2015, Kansas’ gross domestic product, a measure of the state’s economic output, increased by 23 percent, when adjusted for inflation. U.S. GDP increased 27 percent during this time.
- By 2030, vehicle travel in Kansas is projected to increase by another 15 percent.
KANSAS ROAD CONDITIONS
A lack of adequate state and local funding has resulted in 37 percent of major roads and highways in Kansas having pavement surfaces in poor or mediocre condition, providing a rough ride and costing motorists in the form of additional vehicle operating costs. Deferring maintenance on roads and highways can greatly increase long-term repair costs.
- The pavement data in this report, which is for all arterial and collector roads and highways, is provided by the Federal Highway Administration (FHWA), based on data submitted annually by the Kansas Department of Transportation (KDOT) on the condition of major state and locally maintained roads and highways.
- Pavement data for Interstate highways and other principal arterials is collected for all system mileage, whereas pavement data for minor arterial and all collector roads and highways is based on sampling portions of roadways as prescribed by FHWA to insure that the data collected is adequate to provide an accurate assessment of pavement conditions on these roads and highways.
- Thirteen percent of Kansas’ major locally and state-maintained roads and highways have pavements in poor condition and 24 percent are rated in mediocre condition. Eight percent of the state’s major roads are in fair condition and the remaining 56 percent are rated in good condition.
- Thirty-seven percent of Kansas’ major locally and state-maintained urban roads and highways have pavements in poor condition and 26 percent are rated in mediocre condition. Thirteen percent of the state’s major urban roads are in fair condition and the remaining 24 percent are rated in good condition.
- Nine percent of Kansas’ locally and state-maintained rural roads and highways have pavements in poor condition and 23 percent are rated in mediocre condition. Seven percent of the state’s rural roads are in fair condition and the remaining 62 percent are rated in good condition.
- The chart below details the share of pavement in poor, mediocre, fair and good condition in the state’s largest urban areas.
- Roads rated in mediocre to poor condition may show signs of deterioration, including rutting, cracks and potholes. In some cases, these roads can be resurfaced, but often are too deteriorated and must be reconstructed.
- Driving on rough roads costs Kansas motorists a total of $1 billion annually in extra vehicle operating costs. Costs include accelerated vehicle depreciation, additional repair costs, and increased fuel consumption and tire wear.
- Long-term repair costs increase significantly when road and bridge maintenance is deferred, as road and bridge deterioration accelerates later in the service life of a transportation facility and requires more costly repairs. A report on maintaining pavements found that every $1 of deferred maintenance on roads and bridges costs an additional $4 to $5 in needed future repairs.
KANSAS BRIDGE CONDITIONS
Nine percent of locally and state-maintained bridges in Kansas show significant deterioration. This includes all bridges that are 20 feet or more in length.
- Nine percent of Kansas’ bridges are structurally deficient. A bridge is structurally deficient if there is significant deterioration of the bridge deck, supports or other major components. Structurally deficient bridges are often posted for lower weight or closed to traffic, restricting or redirecting large vehicles, including commercial trucks and emergency services vehicles.
- The chart below details the share of structurally deficient bridges in Johnson and Wyandotte Counties, Topeka and Wichita and statewide.
HIGHWAY SAFETY AND FATALITY RATES IN KANSAS
Improving safety features on Kansas’ roads and highways would likely result in a decrease in the state’s traffic fatalities and serious crashes. It is estimated that roadway features are likely a contributing factor in approximately one-third of all fatal and serious traffic crashes.
- A total of 1,881 people were killed in Kansas traffic crashes from 2011 to 2015, an average of 376 fatalities per year.
- Kansas’ overall traffic fatality rate of 1.13 fatalities per 100 million vehicle miles of travel in 2015 was the same as the national average of 1.13.
- The fatality rate on Kansas’ non-interstate rural roads in 2015 was approximately four-and-a-half times greater than on all other roads in the state (2.24 fatalities per 100 million vehicle miles of travel vs. 0.50).
- The chart below details the average number of people killed in traffic crashes from 2013 to 2015 in the state’s largest urban areas, as well as the cost per motorist of traffic crashes.
- Traffic crashes in Kansas imposed a total of $2.2 billion in economic costs in 2015. TRIP estimates that traffic crashes in which roadway features were likely a contributing factor imposed $730 million in economic costs in 2015.
- According to a 2015 National Highway Traffic Safety Administration (NHTSA) report, the economic costs of traffic crashes includes work and household productivity losses, property damage, medical costs, rehabilitation costs, legal and court costs, congestion costs and emergency services.
- Roadway features that impact safety include the number of lanes, lane widths, lighting, lane markings, rumble strips, shoulders, guard rails, other shielding devices, median barriers and intersection design. The cost of serious crashes includes lost productivity, lost earnings, medical costs and emergency services.
- Several factors are associated with vehicle crashes that result in fatalities, including driver behavior, vehicle characteristics and roadway features. TRIP estimates that roadway features are likely a contributing factor in approximately one-third of fatal traffic crashes.
- Where appropriate, highway improvements can reduce traffic fatalities and crashes while improving traffic flow to help relieve congestion. Such improvements include removing or shielding obstacles; adding or improving medians; improved lighting; adding rumble strips, wider lanes, wider and paved shoulders; upgrading roads from two lanes to four lanes; and better road markings and traffic signals.
- Investments in rural traffic safety have been found to result in significant reductions in serious traffic crashes. A 2012 report by the Texas Transportation Institute (TTI) found that improvements completed recently by the Texas Department of Transportation that widened lanes, improved shoulders and made other safety improvements on 1,159 miles of rural state roadways resulted in 133 fewer fatalities on these roads in the first three years after the improvements were completed (as compared to the three years prior). TTI estimates that the improvements on these roads are likely to save 880 lives over 20 years.
KANSAS TRAFFIC CONGESTION
Increasing levels of traffic congestion cause significant delays in Kansas, particularly in its larger urban areas, choking commuting and commerce. Traffic congestion robs commuters of time and money and imposes increased costs on businesses, shippers and manufacturers, which are often passed along to the consumer.
- Based on Texas Transportation Institute (TTI) estimates, the value of lost time and wasted fuel in Kansas is approximately $1 billion per year
- The chart below details the number of hours lost to congestion by the average driver in the state’s largest urban areas, as well as the annual cost of traffic congestion per driver in the form of lost time and wasted fuel
- Increasing levels of congestion add significant costs to consumers, transportation companies, manufacturers, distributors and wholesalers and can reduce the attractiveness of a location to a company when considering expansion or where to locate a new facility. Congestion costs can also increase overall operating costs for trucking and shipping companies, leading to revenue losses, lower pay for drivers and employees, and higher consumer costs.
TRANSPORTATION FUNDING IN KANSAS
Investment in Kansas’ roads, highways and bridges is funded by local, state and federal governments. The continued transfer of state highway funds to the state general fund threatens the state’s ability to provide a well-maintained, safe and efficient transportation system. The five-year federal surface transportation program includes modest funding increases and provides states with greater funding certainty, but falls far short of providing the level of funding needed to meet the nation’s highway and transit needs. The bill does not include a long-term and sustainable revenue source. The nation faces a significant shortfall in needed funding for road, highway and bridge improvements.
- The ability of the Kansas Department of Transportation to repair and improve the state’s transportation system has been hampered by the transfer of $2.4 billion in state highway funds to state general funds and other state agencies between fiscal year 2011 and fiscal year 2017.
- Governor Sam Brownback’s FY 2018/FY 2019 budget proposal would increase transfers of state highway funds to state general funds to $3.4 billion from FY 2011 to FY 2019.
- $700 million of the $2.4 billion transferred out of the state’s highway fund between FY 2011 and FY 2017 and $200 million out of the additional $1 billion of state highway funds proposed to be transferred in the Governor’s FY 2018/FY 2019 budget proposal, are part of the state’s Transportation Works for Kansas (T-Works) program.
- Signed into law in December 2015, the Fixing America’s Surface Transportation Act (FAST Act), provides modest increases in federal highway and transit spending, allows states greater long-term funding certainty and streamlines the federal project approval process. But the FAST Act does not provide adequate funding to meet the nation’s need for highway and transit improvements and does not include a long-term and sustainable funding source.
- The five-year, $305 billion FAST Act will provide a boost of approximately 15 percent in national highway funding and 18 percent in national transit funding over the duration of the program, which expires in 2020.
- According to the 2015 Status of the Nation’s Highways, Bridges and Transit: Conditions and Performance report submitted by the United States Department of Transportation (USDOT) to Congress, the nation faces an $836 billion backlog in needed repairs and improvements to the nation’s roads, highways and bridges.
- The USDOT report found that the nation’s current $105 billion investment in roads, highways and bridges by all levels of government should be increased by 35 percent to $142.5 billion annually to improve the conditions of roads, highways and bridges, relieve traffic congestion and improve traffic safety.
TRANSPORTATION AND ECONOMIC GROWTH IN KANSAS
The efficiency of Kansas’ transportation system, particularly its highways, is critical to the health of the state’s economy. Businesses rely on an efficient and dependable transportation system to move products and services. A key component in business efficiency and success is the level and ease of access to customers, markets, materials and workers.
- Annually, $395 billion in goods are shipped to and from sites in Kansas, mostly by truck.
- Eighty-two percent of the goods shipped annually to and from sites in Kansas are carried by trucks and another 12 percent are carried by courier services or multiple mode deliveries, which include trucking.
- Increasingly, companies are looking at the quality of a region’s transportation system when deciding where to re-locate or expand. Regions with congested or poorly maintained roads may see businesses relocate to areas with a smoother, more efficient and more modern transportation system.
- Highway accessibility was ranked the number two site selection factor behind only the availability of skilled labor in a 2015 survey of corporate executives by Area Development Magazine.
- The Federal Highway Administration estimates that each dollar spent on road, highway and bridge improvements results in an average benefit of $5.20 in the form of reduced vehicle maintenance costs, reduced delays, reduced fuel consumption, improved safety, reduced road and bridge maintenance costs and reduced emissions as a result of improved traffic flow.
Sources of information for this report include the Federal Highway Administration (FHWA), the American Association of State Highway and Transportation Officials (AASHTO), the Bureau of Transportation Statistics (BTS), the U.S. Census Bureau, the Texas Transportation Institute (TTI) and the National Highway Traffic Safety Administration (NHTSA).