Economic Implications of the State of Poor Repair of Highways : US Case Studies
Paula Dowell, PhD, Cambridge Systematics, Isabel Victoria, PhD, Cambridge Systematics
To better understand the economic costs and return of worsening state of repair of the nation's highway network, an economic analysis of the impact of changes in pavement and bridge conditions and congestion levels was conducted.
A state's transportation system is vital to its economic health. Transportation serves key industries and economic development assets in the state, provides for emergency routing, serves local commuters, and is the gateway for millions of visitors each year. Funding for transportation at the Federal and state levels has not kept up with growing demand and needs. Under the current funding stream, it is projected that the nation will fall even further behind in terms of maintenance, preservation and expansion of the roadway system. Deteriorating pavement and bridges and increased congestion have a direct impact on transportation costs for US businesses and residents. As transportation costs increase, a country's and state's ability to compete in a global market decreases. To better understand the economic costs and return of worsening state of repair of the nation's highway network, an economic analysis of the impact of changes in pavement and bridge conditions and congestion levels was conducted. This study examines and is organized around the economic implications of two alternatives including:
• The economic implications of continuing with business as usual with current funding sources and levels.
• The economic returns of increasing funding to adequately meet the needs of the state's highways.
The study examines two US states- Georgia and Mississippi. This paper discusses the potential costs to Georgia's and Mississippi’s highway users of deteriorating pavement, bridge and capacity conditions over the next 25 years and the effect infrastructure preservation has on the economies of the states. The performance metric to assess the pavement condition is the International Roughness Index (IRI). For capacity, it is level-of-service (LOS) and for bridges, it is weight posted bridges. The estimation of the direct and total economic impacts over the 2016-2040 timeframe is based on two level of investments in each state's highway system: one consistent with current revenue forecasts (“Current Spending” Scenario) and an alternative, higher level of investment that is expected to maintain current system performance (“Increased Spending” Scenario).
For Mississippi, the analysis indicates that over the 25-year timeframe, the impacts of worsening roadway conditions under the current spending scenario are equivalent to $42.7 billion in transportations costs comprised of increases in vehicle operating costs, travel time costs and motor vehicle crashes. This equates to about $650 in additional maintenance and operating costs for each driver in the state. The additional transportation costs are estimated to lead to 51,800 fewer jobs and a reduction in Gross State Product of near $80 billion by 2040. Increasing funding to meet minimum pavement and bridge performance targets results in a reduction in transportation costs of $62.5 billion and an increase in employment of 77,500 jobs and $123 billion in GSP. For Georgia, deteriorating pavement and bridges are estimated to lead to an increase of $12.5 billion in vehicle operating and safety costs by 2040 under the current funding scenario. This is estimated to lead to 16,000 fewer jobs and a loss of $17.8 billion in GSP. Increased funding is projected to give rise to an additional 21,000 jobs and $22.5 billion in GSP.
Association for European Transport