linkedin 2 twitter 2

Economic Development Research Group Blog

  • Home
    Home This is where you can find all the blog posts throughout the site.
  • Categories
    Categories Displays a list of categories from this blog.
  • Tags
    Tags Displays a list of tags that have been used in the blog.
  • Bloggers
    Bloggers Search for your favorite blogger from this site.
  • Login
    Login Login form

Chandler Duncan

Chandler Duncan has not set their biography yet
Posted by on in Infrastructure

The President’s federal budget proposal proposes $2.4 Billion in transportation spending reductions – including significant cuts in federal transit programs. Meanwhile, states from Georgia to Oregon and places in-between have looked to increase state transit funding and there is growing discussion about the role of public-private-partnerships (PPP)’s in funding transit improvements. These changes create an environment in which transit systems and proponents must make a more compelling case than ever before to business and economically savvy audiences demonstrating their economic role.

It is time for states and regions to take stock of what is really at stake in transit investment. A State or Regional Transit Economic Blueprint can be understood as a regional study showing the role of transit in the economy, and mapping out the rationale for future investment strategies.

Areas like Hampton Roads, Virginia, Fairbanks Alaska and Austin Texas in the last year have undertaken significant efforts to define the role of transit in regional economies and assess the return on investment for continuing and expanding transit capabilities. Furthermore in recent years the American Public Transportation Association (APTA) has undertaken significant studies on the role of transit in both the overall US national economy and its regional and state economies.

Without such blue-prints, most stakeholders and decision makers either under-estimate or have difficulty locating the true economic role and benefit of transit. It is easy to overlook critical economic opportunities if looking only at the ridership in the transit market, or only thinking of transit’s role in terms of congestion relief. Even when a very small percentage of trips are carried by transit on an uncongested system, transit can be central to the engine of a region’s transportation economy because:

(1) Transit plays a special role in industry value-chains: A good study of the economic role of transit can demonstrate the industry value chains in the economy where transit is particularly important. For example, many citizens may believe that if they or their customers do not use transit directly, they are economically independent of transit services. However, in reality more businesses depend on transit than even typical employees or customers realize. For example, in a hospital even if only 5% of workers use transit – and these are certified medical assistants, custodial and food service staff, the entire operation of the hospital, ranging from routine appointments to million dollar surgeries would be unsustainable without this transit-dependent aspect of the operation. In the same way, resort, hotels and tourist establishments that bring millions of dollars of revenue into local economies often depend on transit for key occupations without which entire establishments or even industries would be in-viable at existing locations. Understanding the value-chain role of transit in the economy is vital to developing (and building consensus around) a responsible transit investment strategy.

(2) Transit creates productivity by enhancing workforce accessibility: Transit does more than simply moving people efficiently. If you are a business manager or owner, there are cases where transit can expand the potential pool of applicants for any given job, enabling your business to be more productive. Imagine that you opened an engineering firm, and needed a mechanical engineer. Imagine 5 people apply. Suppose another 5 would have applied, but were unable to make it to your location within a reasonable commuting time? Would a firm with 10 applicants to choose from find a better engineer, or the firm with only 5? In cases where BRT, rail transit and other options expand the accessible labor pool, businesses can be more productive. In this way, even if relatively few people ride transit, the impact of the access it provides can have a profound effect on the business environment. This is such a powerful benefit that private firms like Google actually operate some of the largest transit fleets in America. APTA conducted a study in 2014 demonstrating how this effect plays out in multiple cities throughout America. Understanding the role of transit access in the productivity of the business environment is another key advantage to having a transit economic blueprint.

(3) Transit reduces the amount of money spent to move people: The “modal efficiency” of transit has long been understood in terms of attracting riders who would otherwise drive cars - (thus reducing the cost of operating and accommodating a separate vehicle for every commuter). However, the greatest efficiency may well be riders who do not own cars at all. For many transit riders (especially in cities with small and medium-sized transit systems), the absence of transit could mean either (1) foregoing employment and other activities entirely or (2) imposing costs on friends, neighbors or others to share rides by adding additional travel time and cost to other commuting trips above and beyond the cost of congestion. Hence the efficiency of offering transit service is not simply the idealistic desire to attract drivers to a more efficient mode – but in many cases affects employers, co-workers, friends family and an the entire support system of a transit user.

A Transit Economic Blueprint can readily identify and quantify (in terms of dollars, jobs, business sales and household income) how and where these and other critical economic efficiencies of transit occur. Furthermore, a good blueprint can compare investment strategies, assess the efficiency of the transit-land use relationship and identify emerging occupational, consumer and even new business-attraction segments for transit. Investing in this type of planning and market intelligence may be among the most responsible actions a state, metropolitan planning organization or transit authority can take.

Tagged in: #TRBAM
Hits: 142
0

Blog_graphic.jpg

Changes in the administration, debates in Washington, and  ongoing developments in technology, climate change and infrastructure costs make it harder than ever to undertake meaningful transportation plans, corridor studies and prioritize public investments.

 

Choosing between different mixes of long-term transportation infrastructure investments for such an uncertain future is a bit like trying to walk ashore in a rising tide. As soon as you find your path, it disappears! 

The cost of over-build on an asset or transportation system can have life cycle costs that jeopardize an agency’s ability to respond to new challenges. However the societal costs of under-build in terms of safety, congestion and environmental loss can be even more taxing. It is time for transportation planners and engineers to consider the implications of different economic trajectories when assessing future traffic volumes and investment needs. 

What if energy prices (including motor fuel) rise at triple the price currently anticipated? What if foreign trade policies or changes in exchange rates significantly alter the purchasing power of the US dollar and the sourcing of American freight? What if the economy faces another major recession, or changes in trade volumes overwhelm the capacity of US ports? Changes of this type can alter the fundamental assumptions that transportation plans hold about commuting levels, freight traffic, trip patterns, highway and inter-modal capacity and overall system performance.

New tools and data sources are being developed to enable planners to build such considerations into their forecasting and scenario planning. It is increasingly possible to consider aggressive, moderate and conservative estimates of transportation needs, as well as to create investment scenarios that balance and account for different economic possibilities. Incorporating economic possibilities into planning can transform the planning process by:

(1) Adding a level of credibility and relevance to salient economic issues

(2) Responding to tough questions from business stakeholders and elected officials

(3) Enabling plans to account for up-side and down-side risk of proposed projects

(4) Demonstrating how the rationale for prioritization may change with the economy

(5) Clarifying the appropriate overall size of transportation programs

(6) Showing ways to “Right-Size” the life-cycle preservation cost for existing assets

It’s time for a conversation about serious ways to integrate economic uncertainty into the transportation planning and decision making process. 

Tagged in: #TRBAM
Hits: 318
0

To secure funding for projects through the federal TIGER or FASTLANE grant programs, it is critical to demonstrate not only a great project in terms of benefit-cost ratio, but also why the project has economic consequences. Successful TIGER grants for highway or bridge projects have tended to go to applicants who can show community or regional benefits. The new FASTLANE grant program seeks applications that can demonstrate national freight significance and visible economic outcomes.

Rural and freight projects can easily be overlooked if the sources of benefits are not understood to go beyond the regular travel time, reliability and mileage savings. In rural areas, where traffic volumes are often low – a strong accessibility and livability case can be essential to a strong application. In 2014 EDR Group performed the Benefit-Cost analysis for the largest TIGER award given that year – the Kentucky Mountain Parkway Extension. Access to state parks, health care and other amenities supporting livability and quality of life was an important consideration that may have been overlooked without going beyond typical engineering measures. In writing other winning applications, such as the 2013 Rhode Island Apponaug Bypass and the 2015 Mississippi River Bridge in Missouri, we also relied on important considerations about how projects would affect business operations on the ground and community quality of life.

When it comes to freight projects where generalized models of travel demand tell only a sliver of the story, it becomes important to also demonstrate downstream supply chain effects or business productivity, using freight data.

The deadline for the newest round of TIGER Grant applications is April 29, 2016 (see: https://www.transportation.gov/tiger  ). The deadline for the new FASTLANE grant program is April 14, 2016 (see https://www.transportation.gov/fastlanegrants/fastlane-nofo  ). EDR Group provides consulting service support for both grant programs. Read more about these past awards on EDR Group’s web site at: www.edrgroup/TIGER .

To develop a grant application for your project, please contact Chandler Duncan (cduncan@edrgroup.com ), tel +1.617.338.6775 x203

Tagged in: #TRBAM
Hits: 1159
0

When funds are short, agencies are often challenged to justify decisions about which projects to do and not to do. One way that agencies address this situation is by conducting cost-benefit analysis, which quantifies all of the potential benefits of projects relative to their costs and compares which investments seem to offer the best outcomes for the money. Agencies may use cost-benefit analysis to justify a particular project (showing its benefits are more than its costs) or to rank projects based on which ones offer the most benefits per dollar spent (often regarded as a ‘prioritization’ process). Using economic methods to compare the benefits of projects can be an extremely useful and powerful tool both for decision making and for explaining choices to stakeholders. However, challenges arise when agencies find that there are “intangible” (or difficult to quantify) outcomes which are known to be important.

Hits: 5078
0

Increasingly, agencies are interested in understanding the benefits of their investments in terms of the "triple bottom line" or (TBL).  TBL is often presented as a new and important type of analysis in transportation and economics.  It is important for planners, economists, and others involved in transportation decisions to understand what this means, and how it relates to the current state of the practice in transportation economics.

Hits: 3999
0