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Two-Thirds of the Economic Benefits and Jobs Created By Road & Transit Investment Occur in Non-Construction Sectors, New Study Finds

Two-thirds of the economic benefits and jobs created by federal highway and transit investment occur in non-construction sectors, according to a new analysis from IHS Inc. (NYSE: IHS), a leading global source of critical information and insight. The study also finds that every dollar invested through the federal Highway Trust Fund (HTF) in state highway, bridge and public transit infrastructure programs returns 74 cents in tax revenue.

The report, “Transportation Infrastructure Investment: Macroeconomic and Industry Contribution of Federal Highway and Mass Transit Program,” reveals that 70 percent of the economic benefits, or value- added, of federal HTF investments in transportation improvements occur in non-construction sectors of the economy. Among the sectors that benefit the most are service industries such as business, education, health and leisure, and hospitality.

The study also finds that 62 percent of the jobs created from federal highway and mass transit investments are outside the construction industry. Over one-third of all jobs created are also in service industries like business, education, health and leisure, and hospitality.

“The study shows that investment in transportation infrastructure has a positive impact on every major sector of the U.S. economy. These far reaching economic benefits contribute to economic growth by improving the nation’s capital stock, which enables increased economic activity,” said Karen Campbell, a senior consultant at IHS, who produced the report with Bob Brodesky, a transportation expert and senior manager in the IHS Industry Consulting Group.

Current federal highway and public transit investment, which is about $50 billion annually, generates an average $31 billion in personal income tax receipts per year and $6 billion in federal corporate tax receipts per year due to increased economic activity, according to the analysis. This amounts to 74 cents returned on every dollar invested 

IHS notes that current levels of federal investment on highway and public transit spending contribute nearly one percent to the U.S Gross Domestic Product (GDP), the measure of goods and services produced by the economy. Among the other economic benefits:

  • Every $1 in federal highway and mass transit investment increases the nation’s GDP between $1.80-$2.00
  • Current federal transportation spending contributes on average $410 to real income per household each year

IHS also studied the resulting impacts from five percent annual increases in federal highway and transit investment from 2014-2019, and found the added investment would create:

  • Between 78,000 and 122,000 new jobs by 2019 (includes direct, indirect, and induced jobs);
  • An annual average increase of $40 in real household income each year;
  • An additional $9.6 billion in real GDP for the U.S. economy by 2019; and
  • On average an additional $4.9 billion per year in federal, state and local government

“Federal transportation spending expands the capital stock of the U.S. economy, drives the production and delivery of goods and services, and positively affects business and household incomes,” the study’s authors write. “It also enhances the transportation system’s operational capacity by reducing travel times and costs. This results in greater accessibility for individuals, households and businesses, more efficient delivery of goods and services, improved lifestyles, and standards of living, and safer roadways.”

The members of the Transportation Construction Coalition (TCC), which commissioned the study, said they would send it to all congressional offices to help them better understand the urgency for a permanent solution for the Highway Trust Fund well before May 2015, when funding for the highway and transit program will once again be in jeopardy for the sixth time since 2008. The TCC is issuing this report ahead of the upcoming congressional recess, when many coalition members will be meeting with their elected officials at home. 

Select Comments & Reactions to the Dec. 10 IHS Study:

Transportation Infrastructure Investment: Macroeconomic and Industry Contribution of Federal Highway and Mass Transit Projects

“The TCC study is a wake-up call to lawmakers who have had their heads in the sand on this issue for far too long. The evidence is clear; the condition of our roads, bridges and transit systems significantly impacts every sector of our economy. We call on Congress to summon the political courage necessary to strengthen the Highway Trust Fund in a way that delivers long-term certainty to transportation planning and opens on ramps to job creation in this country.

Tens of thousands of Operating Engineers depend on these investments for their livelihoods. It is time for Congress to do its work, so that we can do our work building America’s transportation system.”

James T. Callahan, general president, International Union of Operating Engineers

“Our nation’s surface transportation network is in distress, and this study confirms that fact. Chronic underinvestment plagues every mode of transportation and is having a detrimental impact on our ability to compete globally. Congress must get to work and enact a robustly-funded, long-term surface transportation bill – and base the funding on a user-fee principle indexed for inflation. This may be the best way to resolve once and for all the devastating economic impacts that inadequate funding has had on our economy, jobs and the safety of our roads and bridges.”

Thomas J. Gibson, president & CEO, American Iron and Steel Institute

“This report echoes what civil engineers have been warning for years: if we fail to make the investment in our aging transportation infrastructure, our economy will suffer. Our transportation system is the backbone of the economy, and it drives growth in sectors beyond construction. Roads and transit received D grades and bridges received a C+ in the 2013 Report Card for America’s Infrastructure. The low grades are holding our economy back. This report should serve as further incentive for our Congressional leaders to fix the Trust Fund.”

Robert D. Stevens, P.E., Ph.D., president, American Society of Civil Engineers

“The new study echoes what Congress, stakeholders and the American people already know—surface transportation investment drives economic growth and job creation. The time is long overdue for policymakers to put aside partisan differences and provide the resources to rebuild our crumbling infrastructure. Congress must use the TCC study, as well as the countless other reports detailing highway and transit infrastructure investment’s broad economic impact, to build support for immediate and decisive action to invest in surface transportation projects.”

Brian P. McGuire, president & CEO, Associated Equipment Distributors

“A strong transportation network benefits every sector of our economy, and is essential to the prosperity of businesses and households. NECA urges members of Congress to heed the findings of this report, and to make a sound investment in our nation by enacting a robust, long-term transportation bill.”

John Grau, chief executive officer, National Electrical Contractors Association

“This report demonstrates how the benefits from investments in transportation infrastructure extend well beyond the equipment manufacturing sector. For many Americans, this is a pocketbook issue; today’s report shows that federal highway and transit investment supports hundreds of thousands of jobs and contributes $410 per year on average to every household’s real income. That’s why AEM is so proud to join with the TCC coalition to support continued, sustainable investment in our highway and transit infrastructure to help create shared opportunity.”

Dennis Slater, president, Association of Equipment Manufacturers 

“The importance of a long-term, robust and dedicated funding stream not only will keep our economy growing, but will provide the needed transportation infrastructure for businesses to be competitive and for American citizens the quality of roads and bridges they deserve. The Concrete Reinforcing Steel Institute firmly believes in the federal government’s role in planning and delivering transportation services and projects for a 21st transportation system. CRSI supports the passage of a comprehensive, visionary, multi-year reauthorization of surface transportation programs to improve our bridges and pavements, increase mobility and reliability, safety and sustainability.

Bob Risser, president & CEO, Concrete Reinforcing Steel Institute

“While there is strong bipartisan support for the crucial infrastructure upgrades, stopgap measures are not a cost- effective way to improve our most valuable national assets – our roads, highways and bridges. Our nation’s surface transportation infrastructure underpins the economy is essential to growth and prosperity. Congress must come up with a long-term funding solution as states and localities are hesitant to start new projects or finish existing ones out of fear that the federal government won’t meet its funding obligations.”

Mike Johnson, president & CEO, National Stone, Sand and Gravel Association

“What this report makes clear is that our entire economy benefits from federal investments in highway and transit projects. But that economic activity and those jobs are at risk if Congress and the Obama administration can’t figure out a way to pay to get our roads, bridges and transit systems back up to a state of good repair and to meet future travel and shipping needs.”

Stephen E. Sandherr, chief executive officer, Associated General Contractors of America & co-chair of the Transportation Construction Coalition

“What makes this study different is that it focuses on the outcomes of federal-level highway and transit investment and measures its significant impact on every sector of the U.S. economy. This is one policy area where Congress’ involvement could actually yield meaningful and long-lasting economic results for hundreds of industries and millions of households. Our message for the new Congress is simple: Find a permanent solution for the Highway Trust Fund early next year so that state governments have the resources they need to make strategic and economically-beneficial transportation investments.”

Pete Ruane, president & CEO, American Road & Transportation Builders Association & co-chair of the Transportation Construction Coalition

“Good infrastructure is exceedingly important to manufacturers and as the condition of infrastructure has deteriorated over time and spending levels have dipped – awareness has increased among manufacturers and concern over the quality and condition of infrastructure is mounting. Infrastructure is deteriorating due to age and we are not keeping up with the demands placed on the system. Status quo funding levels will not even begin to tackle the problems and address backlogs. The TCC study offers yet another well-researched body of evidence that current approaches are not enough to grow our economy at home and go head-to-head with our competitors abroad.”

Chad Moutray, chief economist, National Association of Manufacturers

 For a copy of the IHS report, Transportation Infrastructure Investment: Macroeconomic and Industry Contribution of Federal Highway and Mass Transit Program, go to www.transportationconstructioncoalition.org.

EXECUTIVE SUMMARY

Federal transportation spending expands the capital stock of the US economy, drives the production and delivery of goods and services, and positively affects business and household incomes. It also enhances the transportation system’s operational capacity by reducing travel times and costs. This results in greater accessibility for individuals, households and businesses, more efficient delivery of goods and services, improved life styles and standards of living, and safer roadways.

IHS used two models to evaluate the macro and micro economic effects of Highway Trust Fund spending. Both showed the availability of funds delivered to state and local governments have far-reaching indirect effects – for every $1 of federal transportation investment returns between $1.80 – $2.00 of additional real goods and services produced in the economy.

Macroeconomic results revealed that current levels of federal spending on highway and mass transit contributes nearly 1% to the US production of goods and services. The current level of funding contributes on average 614,000 jobs per year over the 2014-2019 time period and adds an average of $410 to each US household’s real income each year. A 5% increase in annual spending through 2019 would result in an average of 59,400 additional jobs per year and an annual average increase of $40 in real household income. Federal spending also produces indirect benefits and induces growth in key economic sectors. The sector that experiences the largest benefit, in terms of jobs created, is the Business and Professional Services sector. The Trade, Transportation and Utilities sector, which includes wholesale and retail companies, is a close second.

In summary, over the 2014 to 2019 time frame:

 Infrastructure spending has an amplified impact on the economy. It leads to overall productivity enhancements and creates jobs.

 Every $1 in federal highway and mass transit investment returns between $1.80 – $2.00 in goods and services produced.

 Current federal transportation spending contributes on average $410 to real income per households each year (which is comparable to a month’s worth of groceries).1

 Current federal transportation spending supports an average of 614,000 employees each year in all sectors of the economy. It catalyzes dynamic effects of greater productivity, more efficient delivery of goods and services, and higher wages and salaries.

 For every 3 construction job created, 5 jobs are created in other sectors of the economy.

 Current federal transportation spending generates $31 billion in federal personal tax receipts per year and $6 billion in federal corporate tax receipts per year on average. Current federal spending also generates higher revenue for state and local budgets, which are, on average, $21.7 billion higher each year than they would be without the Federal Highway Program.

 Five percent annual increases in federal spending would create:

o Between 78,000 and 122,000 new jobs by 2019 (includes direct, indirect, and induced jobs).

o An additional $40 in real household income each year.

o An additional $9.6 billion in real value to the US economy by 2019.

o On average an additional $4.9 billion per year in federal, state and local government revenue, which covers more than 50% of the annual spending needed to cover the backlog in highway and bridge capital expenditures.2

Clearly, transportation infrastructure investment is critical to the economic wellbeing of the US.

For a copy of the IHS report, Transportation Infrastructure Investment: Macroeconomic and Industry Contribution of Federal Highway and Mass Transit Program, go to www.transportationconstructioncoalition.org

ARTBA Reports: Another Big Election Winner: Transportation Funding Initiatives

Nearly 70% Approved by Voters Across the Nation, ARTBA Report Shows  

Voters across the nation again demonstrated they strongly support increased investment in transportation improvements, approving 60 of 90 (67 percent) transportation-related initiatives that were on the November ballot, according to a report from the American Road & Transportation Builders Association’s Transportation Investment Advocacy Center (ARTBA-TIAC).

The measures will provide nearly $21 billion in additional in revenue for transportation projects, the ARTBA-TIAC’s post-election analysis finds.

“These election results show, once again, the public wants our government to invest in our mobility and safety and are willing to pay for it,” ARTBA President & CEO Pete Ruane said.  “It doesn’t make a difference whether it is a Republican- or Democratic-leaning state.   The newly-elected Congress and the White House must take note and do their job and permanently fix the Highway Trust Fund.  Transportation funding cannot remain frozen in the ice of political inertia and partisanship.  The states rely on federal funds for, on average, 52 percent of their highway and bridge capital investments.”

Texans approved the largest state funding initiative, redirecting nearly $1.2 billion in oil and gas revenues from the state’s rainy day fund for transportation.  Voters in Maryland (81 percent) and Wisconsin (80 percent) overwhelmingly approved measures to ensure that transportation-related revenues are used exclusively for their intended purpose, and not diverted to non-transportation programs.  With support of 60 percent of voters, Rhode Island voters also approved a statewide $35 million bond proposal.  A Louisiana proposal to approve creation of a state constitutional amendment establishing a state infrastructure bank was defeated.

Of the county and local initiatives:

  • 20 of the 32 measures (63 percent) to increase a gasoline or general sales tax for transportation investment were approved.
  • 13 of the 14 measures (93 percent) to issue local bonds for transportation investment were approved.
  • 23 of the 35 measures (66 percent) to increase property taxes for transportation investment were approved.

Historically, voters have approved ballot measures to increase transportation revenues, including 86 percent of initiatives in 2013, 68 percent in 2012, 55 percent in 2011, 61 percent in 2010, 78 percent in 2008, 63 percent in 2007, 77 percent in 2006, 83 percent in 2005, and 76 percent in 2004.  In sum, over the past 10 years, voters have approved an average of 72 percent of the measures.

TIAC, which was launched by ARTBA in March, is an online educational platform that features detailed case studies of recent transportation funding campaigns—both successful and unsuccessful—mounted in numerous states.  It includes television, radio and print ads, polling, an overview of state and local funding and finance mechanisms, and an ongoing blog detailing new developments across the nation.

Established in 1902 and headquartered today in the Nation’s Capital, ARTBA is the “consensus voice” of the U.S. transportation design and construction industry.

ABC Reports: Nonresidential Construction Spending Slips for Second Consecutive Month

CEU2“September’s drop in nonresidential construction spending is disappointing given the growing momentum in the broader economy and the generally positive signals being sent by industry-specific leading economic indicators.”—ABC Chief Economist Anirban Basu.

Construction Spending Nov 2014Nonresidential construction spending slipped 1 percent in September but has still managed to expand 4.2 percent on a year-over-year basis, according to the Nov. 1 release from the U.S. Census Bureau. Spending for the month totaled $596.1 billion on a seasonally adjusted, annualized basis while the government slightly revised the August spending figure from $603.7 billion to $601.9 billion.

“September’s drop in nonresidential construction spending is disappointing given the growing momentum in the broader economy and the generally positive signals being sent by industry-specific leading economic indicators,” said Associated Builders and Contractors (ABC) Chief Economist Anirban Basu. “Based on a combination of these leading indicators—including ABC’s own Construction Backlog Indicator and the Architecture Billings Index—and the anticipated performance of the U.S. economy, nonresidential construction spending should re-establish an upward trajectory on a seasonally adjusted basis going forward.

“With national job creation accelerating recently and interest rates remaining ultra low, one would expect private construction to perform well during the quarters ahead, while growth in publicly funded spending will be much softer,” said Basu. “The industry should be further buoyed by the economy’s two consecutive quarters of respectable economic growth, something the U.S. economy has rarely achieved during the current recovery.”

Only five of 16 nonresidential construction subsectors posted increases in spending in September on a monthly basis.

  • Office-related construction spending grew 2.4 percent in September and is up 15.7 percent from the same time one year ago.
  • Lodging construction spending is up 4.7 percent on a monthly basis and is up 14.7 percent on a year-over-year basis.
  • Conservation and development-related construction spending grew 4.1 percent for the month and is up 31.7 percent on a yearly basis.
  • Commercial construction spending gained 1.3 percent for the month and has grown 12.3 percent on a year-over-year basis.
  • Spending in the water supply category expanded 1.1 percent on a monthly basis, but is down 1.6 percent for the year.

Spending in 11 nonresidential construction subsectors declined in September.

  • Amusement and recreation-related construction spending lost 0.8 percent in September, but is up 0.6 percent from the same time last year.
  • Manufacturing-related spending fell 1.3 percent on a monthly basis, but is up 16.4 percent on a year-over-year basis.
  • Communication construction spending declined 0.7 percent for the month and is down 12.8 percent from the same time last year.
  • Religious spending fell 3.1 percent for the month, but is up 2.6 percent from the same time last year.
  • Sewage and waste disposal-related construction spending declined 2.4 percent for the month, but has expanded 1.1 percent on a 12-month basis.
  • Health care-related construction spending fell 0.9 percent for the month and is down 7.5 percent on a yearly basis.
  • Education-related construction spending fell 0.1 percent for the month, but is up 7.1 percent on a year-over-year basis.
  • Construction spending in the transportation category fell 1.1 percent on a monthly basis, but has expanded by 1.2 percent on an annual basis.
  • Highway and street-related construction spending fell 3.6 percent in September and is down 1.7 percent compared to the same time last year.
  • Public safety-related construction spending lost 2.3 percent on a monthly basis and is down 11.1 percent on a year-over-year basis.
  • Power construction spending fell 3.1 percent for the month, but is 2 percent higher than at the same time one year ago.

To view the previous spending report, click here.

Dire States – A Transportation Vote in Wisconsin

The Dire States team interviews Craig Thompson, the executive director of the Transportation Development Association of Wisconsin. Thompson details a constitutional amendment in Wisconsin that, if approved by voters, will dedicate funds generated by transportation for road and bridge maintenance and construction in the state.

For more on the ballot initiative, visit: ‪http://bit.ly/1y85g4y

For more on Dire States, visit: ‪http://bit.ly/19eJ2AM

 

TRIP Reports: Deficient Roadways Cost Massachusetts Drivers $8.3 Billion Annually, As Much As $1,900 Per Driver. Costs Will Rise And Transportation Woes Will Worsen Without Significant And Reliable Level Of Funding

TRIPRoads and bridges that are deficient, congested or lack desirable safety features cost Massachusetts motorists a total of $8.3 billion statewide annually – as much as  $1,900 per driver – due to higher vehicle operating costs, traffic crashes and congestion-related delays. Significant investment in transportation improvements at the local, state and federal levels could relieve traffic congestion, improve road and bridge conditions, boost safety, and support long-term economic growth in Massachusetts, according to a new report released today by TRIP, a Washington, DC based national transportation organization.

The TRIP report, Massachusetts Transportation by the Numbers: Meeting the State’s Need for Safe and Efficient Mobility finds that throughout Massachusetts, approximately one-fifth of major roads and highways are in poor condition and more than Deficient-roads-cost-Massachusetts-four-citieshalf of Massachusetts’ bridges are structurally deficient or functionally obsolete. The state’s major urban roads have high levels of congestion, with drivers wasting significant amounts of time and fuel each year. And, Massachusetts’ rural non-interstate traffic fatality rate is more than three-and-a-half times higher than the fatality rate on all other roads in the state.

Driving on deficient roads costs each driver as much as $1,913 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 financial cost of traffic crashes. The TRIP report calculated the cost to motorists of insufficient roads in Massachusetts’ largest urban areas: Boston, South Coast, Springfield and Worcester. A breakdown of the costs per motorist in each area and a statewide total is below.

The TRIP report finds 19 percent of Massachusetts’ major roads and highways have pavements in poor condition, while an additional 64 percent of the state’s major roads are rated in mediocre or fair condition and the remaining 17 percent are rated in in good condition. Driving on deteriorated roads costs the state’s motorists $2.3 billion each year in extra vehicle operating costs, including accelerated vehicle depreciation, additional repair costs, and increased fuel consumption and tire wear.

A total of 52 percent of Massachusetts’ bridges show significant deterioration or do not meet modern design standards.  Nine percent of Massachusetts’ bridges are structurally deficient, with significant deterioration to the bridge deck, supports or other major components. An additional 43 percent of the state’s bridges are functionally obsolete, which means they no longer meet modern design standards, often because of narrow lanes, inadequate clearances or poor alignment. 

Traffic congestion is mounting across the state, costing each driver as much as $1,147 annually in lost time and wasted fuel, a total of $3.9 billion statewide.

“Improvements to our infrastructure are an investment in public safety – whether it be for drivers, cyclists or pedestrians,” said Mary Maguire, director of public and government affairs for AAA Southern New England.

Traffic crashes in Massachusetts claimed the lives of 1,697 people between 2008 and 2012. Traffic crashes on Massachusetts’ non-Interstate rural roads are particularly deadly, with a fatality rate in 2012 of 2.07 traffic fatalities per 100 million vehicle miles of travel, more than three-and-a-half times the fatality rate of 0.58 on all other roads and highways in the state.

The efficiency of Massachusetts’ transportation system, particularly its highways, is critical to the health of the state’s economy.  A 2007 analysis by the Federal Highway Administration found that every $1 billion invested in highway construction would support approximately 27,800 jobs.

In 2013 the Massachusetts legislature passed the Transportation Finance Act of 2013 that is projected to raise an estimated $600 million annually.  However, this much-needed infusion of additional funding falls $400 million short of fully addressing additional funding needs – estimated at $1 billion per year over the next 20 years – for Massachusetts’ roads, rails, and public transit systems. A report released earlier this year by Transportation for Massachusetts found that the 2013 state funding package has been very helpful in providing additional funds for the state’s public transit agencies as well as more than 75 additional road and bridge projects in the state, including the I-91 Viaduct in Springfield. 

 “Improving these conditions in Massachusetts and reducing transportation costs to the public will require significant and reliable funding at the state and federal levels,” said Will Wilkins, TRIP’s executive director.

Executive Summary

Ten Key Transportation Numbers in Massachusetts

 

$8.3 billion

Driving on deficient roads costs Massachusetts motorists a total of $8.3 billion annually in the form of additional vehicle operating costs (VOC), congestion-related delays and traffic crashes.

$1,913

$1,608

$1,642

$1,733

 

TRIP has calculated the cost to the average motorist in Massachusetts’ largest urban areas in the form of additional VOC, congestion-related delays and traffic crashes. The average Boston driver loses $1,913 each year; each South Coast area motorist loses $1,608 annually; each Springfield motorist loses $1,642 annually; and each Worcester driver loses $1,733.

339

1,697

On average 339 people were killed annually in Massachusetts traffic crashes from 2008 to 2012, a total of 1,697 fatalities over the five year period.

 

3.5X

The fatality rate on Massachusetts’ non-interstate rural roads is more than three and a half times higher than that on all other roads in the state (2.07 fatalities per 100 million vehicle miles of travel vs. 0.58).

$212 billion

$196 billion

Annually, $212 billion in goods are shipped from sites in Massachusetts and another $196 billion in goods are shipped to sites in Massachusetts, mostly by truck.

 

52 %

A total of 52 percent of Massachusetts bridges are in need of repair, improvement or replacement. Nine percent of the state’s bridges are structurally deficient and 43 percent are functionally obsolete.

53 hours

22 hours

28 hours

33 hours

 

The average driver in the Boston urban area loses 53 hours each year as a result of traffic congestion; each South Coast area driver loses 22 hours annually; each Springfield area driver loses 28 hours annually; and each Worcester area motorist loses 33 hours each year.

 

$1 billion=

27,800 jobs

An analysis by the Federal Highway Administration found that every $1 billion invested in highway construction would support approximately 27,800 jobs.

 

$400 million

 

Last year the Massachusetts legislature approved the Transportation Finance Act of 2013 which provides an additional $600 million annually for improvements to the state’s roads, bridges, rails and public transit systems, which still falls $400 million short of the $1 billion needed annually in additional state transportation funding.  

 

 

$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.

 

Massachusetts’ extensive system of roads, bridges, highways and public transit provides the state’s residents, visitors and businesses with a high level of mobility. This transportation system, which also includes pedestrian and bicycle facilities, forms the backbone that supports the state’s economy. Massachusetts’ surface transportation system enables the state’s residents and visitors to travel to work and school, visit family and friends, and frequent tourist and recreation attractions while providing its businesses with reliable access to customers, materials, suppliers and employees.

            As Massachusetts looks to retain its businesses, maintain its level of economic competitiveness and achieve further economic growth, the state will need to maintain and modernize its roads, highways and bridges by improving the physical condition of its transportation network and enhancing the system’s ability to provide efficient and reliable mobility for motorists and businesses.  Making needed improvements to Massachusetts’ roads, highways and bridges could also provide a significant boost to the state’s economy by creating jobs in the short term and stimulating long term economic growth as a result of enhanced mobility and access.

Massachusetts must improve its system of roads, highways and bridges to foster economic growth and keep businesses in the state. In addition to economic growth, transportation improvements are needed to ensure safe, reliable mobility and quality of life for all residents.  Meeting Massachusetts’ need to modernize and maintain its system of roads, highways and bridges will require a significant boost in local, state and federal funding.     

Last year the Massachusetts legislature approved the Transportation Finance Act of 2013 which is anticipated to provide an additional $600 million annually for improvements to the state’s roads, bridges, rails and public transit systems.  This infusion of additional funding has allowed the Bay State to move forward with numerous projects for improvements to the state’s roads, highways, bridges, rail lines and public transit systems, but falls $400 million short of the estimated $1 billion in additional annual transportation investment needed in the state. 

The federal government is another critical source of funding for Massachusetts’ surface transportation system.  Congress recently approved an eight-month extension of the federal surface transportation program, MAP-21 (Moving Ahead for Progress in the 21st Century Act), which provides the state with road, highway, bridge and transit funding through May 31, 2015.

Meeting Massachusetts’ need to further improve and modernize its system of roads, rails and public transit will for require that the recent state funding boost is maintained and that a long-term, reliably funded, federal surface transportation program is approved. 

An inadequate transportation system costs Massachusetts residents a total of $8.3 billion every year in the form of additional vehicle operating costs (VOC), congestion-related delays and traffic crashes.

·      TRIP estimates that Massachusetts roadways that lack some desirable safety features, have inadequate capacity to meet travel demands or have poor pavement conditions cost the state’s residents approximately $8.3 billion annually in the form of additional vehicle operating costs (including accelerated vehicle depreciation, additional repair costs, and increased fuel consumption and tire wear), the cost of lost time and wasted fuel due to traffic congestion, and the financial cost of traffic crashes.

·      TRIP has calculated the average cost to drivers in the state’s largest urban areas as a result of driving on roads that are deteriorated, congested and lacking some desirable safety features. The chart below details the costs to drivers in the Boston, Springfield and Worcester urban areas.

Mass1

Population and economic growth in Massachusetts have resulted in increased demands on the state’s major roads and highways, leading to increased wear and tear of the transportation system. 

·      Massachusetts’ population reached approximately 6.6 million residents in 2012, a ten percent increase since 1990. Massachusetts had 4,733,936 licensed drivers in 2012.

·      Vehicle miles traveled (VMT) in Massachusetts increased by 21 percent from 1990 to 2012 – from 46.1 billion VMT in 1990 to 55.9 billion VMT in 2012.

·      By 2030, vehicle travel in Massachusetts is projected to increase by another 15 percent.

·      From 1990 to 2012, Massachusetts’ gross domestic product, a measure of the state’s economic output, increased by 45 percent, when adjusted for inflation.

A lack of adequate state and local funding has resulted in one-fifth of major roads and highways in Massachusetts having pavement surfaces in poor condition, providing a rough ride and costing motorist in the form of additional vehicle operating costs (VOC). 

  • Nineteen percent of Massachusetts’ major roads and highways have pavements in poor condition, while an additional 64 percent of the state’s major roads are rated in mediocre or fair condition and the remaining 17 percent are rated in in good condition.
  • Roads rated in poor condition may show signs of deterioration, including rutting, cracks and potholes.  In some cases, poor roads can be resurfaced, but often are too deteriorated and must be reconstructed.

·      Driving on rough roads costs all Massachusetts motorists a total of $2.3 billion annually in extra VOC. Costs include accelerated vehicle depreciation, additional repair costs, and increased fuel consumption and tire wear.

·      The chart below details the percentage of major roads in poor, mediocre, fair and good condition in the state’s major urban areas:

 Mass 2

More than half of locally and state-maintained bridges in Massachusetts show significant deterioration or do not meet current design standards often because of narrow lanes, inadequate clearances or poor alignment. This includes all bridges that are 20 feet or more in length. 

  • Nine percent of Massachusetts’ 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. 
  • Forty-three percent of Massachusetts’ bridges are functionally obsolete.  Bridges that are functionally obsolete no longer meet current highway design standards, often because of narrow lanes, inadequate clearances or poor alignment.
  • In the Boston urban area, ten percent of bridges are structurally deficient and 54 percent are functionally obsolete. Eleven percent of bridges in the South Coast area are structurally deficient and 40 percent are functionally obsolete; eight percent of bridges in the Springfield urban area are structurally deficient, while 47 percent are functionally obsolete. In the Worcester urban area, seven percent of bridges are structurally deficient and an additional 40 percent are functionally obsolete.

Improving safety features on Massachusetts’ 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. 

·      Between 2008 and 2012 a total of 1,697 people were killed in traffic crashes in Massachusetts, an average of 339 fatalities per year.

·      The chart below details the average number of fatalities in each of Massachusetts’ largest urban areas from 2010 to 2012 as well as the annual cost of traffic crashes to the average motorist in each area.

Mass 3

·      Massachusetts’ overall traffic fatality rate of 0.62 fatalities per 100 million vehicle miles of travel in 2012 is lower than the national traffic fatality rate of 1.13.

·      The fatality rate on Massachusetts’ rural non-Interstate roads was 2.07 fatalities per 100 million vehicle miles of travel in 2012, more than three and a half times the 0.58 fatality rate on all other roads and highways in the state. 

·      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 the next 20 years.

Increasing levels of traffic congestion cause significant delays in Massachusetts, 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.

·      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 to consider expansion or even 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.

·      The chart below details the average annual number of hours lost to congestion by each motorist in Massachusetts’ largest urban areas, as well as the annual congestion cost per driver in the form of lost time and wasted fuel.

Mass 4

The efficiency of Massachusetts’ transportation system, particularly its highways, is critical to the health of the state’s economy.  Businesses are increasingly reliant 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, $212 billion in goods are shipped from sites in Massachusetts and another $196 billion in goods are shipped to sites in Massachusetts, mostly by truck.

·      Seventy percent of the goods shipped annually from sites in Massachusetts are carried by trucks and another 23 percent are carried by courier services or multiple mode deliveries, which include trucking. 

  • Businesses have responded to improved communications and greater competition by moving from a push-style distribution system, which relies on low-cost movement of bulk commodities and large-scale warehousing, to a pull-style distribution system, which relies on smaller, more strategic and time-sensitive movement of goods.

·      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 one site selection factor in a 2011 survey of corporate executives by Area Development Magazine.

  • A 2007 analysis by the Federal Highway Administration found that every $1 billion invested in highway construction would support approximately 27,800 jobs, including approximately 9,500 in the construction sector, approximately 4,300 jobs in industries supporting the construction sector, and approximately 14,000 other jobs induced in non-construction related sectors of the economy.

·      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.

Massachusetts’ roads, highways, bridges and public transit systems are funded by local, state and federal governments.  The 2013 boost in state funding helped close the gap in state transportation funding needs.  But improving the state’s transportation system will require a continued strong state transportation program and approval of a long-term, reliably funded federal transportation program. 

·      In 2013 the Massachusetts legislature passed the Transportation Finance Act of 2013 which is projected to raise an estimated $600 million annually.  However, this much-needed infusion of additional funding falls $400 million short of fully addressing additional funding needs – estimated at $1 billion per year over the next 20 years – for Massachusetts’ roads, rails, and public transit systems.

·      A report released earlier this year by Transportation for Massachusetts found that the 2013 state funding package has been very helpful in providing additional funds for the state’s public transit agencies as well as more than 75 additional road and bridge projects in the state, including the I-91 Viaduct in Springfield. 

·      Signed into law in July 2012, MAP-21 (Moving Ahead for Progress in the 21st Century Act), has improved several procedures that in the past had delayed projects, MAP-21 does not address long-term funding challenges facing the federal surface transportation program.

·      Congress recently approved an eight-month extension of the federal surface transportation program, on which states rely for road, highway, bridge and transit funding. The program, initially set to expire on September 30, 2014, will now run through May 31, 2015.

Sources of information for this report include the Federal Highway Administration (FHWA), the Bureau of Transportation Statistics (BTS), the U.S. Census Bureau, the American Association of State Highway and Transportation Officials (AASHTO), the Texas Transportation Institute (TTI) and the National Highway Traffic Safety Administration (NHTSA). All data used in the report is the latest available.