Economic Impacts of Delayed or Eliminated

TCRP & STIP Projects:

A Survey of Regional Transportation Planning Agencies

February 12, 2003

Contact Information:

Diane Nguyen Grindall

RTPA Moderator

SJCOG

6 S. El Dorado St, Suite 400

Stockton, CA 95202

Tel. (209) 468-3913

Fax. (209) 468-1084

e-mail: dgrindall@sjcog.org

Overview

STIP and TCRP projects do not simply mean keeping the traffic flow, but they are indeed one of the critical economic stimuli continuously bolstering California’s economic vitality. One out of every fourteen workers in California was employed by the transportation industry in 2001 according to U.S. Bureaus of Labor Statistics. In addition, more than 300,000 construction workers and 50,000 engineers also benefited from transportation projects, not to mention the indirect employment serving all of these people. In addition, STIP and TCRP projects improve accessibility to economic centers, enhancing the labor force’s mobility for education and employment, connecting California trading hubs with other regions and countries, reducing the economic loss associated with congestion, safety and poor air quality. STIP and TCRP are economically vital for the State of California.

Statewide Picture:

There is currently $5 billion allocated statewide for various TCRP projects and $10 billion for various STIP projects in the next five years. The funding for these projects is fundamentally vital for the overall economic wellbeing of the state. This will not only benefit the transportation sector, but also the indirect and induced services employments associated with transportation projects, such as employments in equipment manufacturing, steel, concrete, engineering, restaurants, etc. In addition, the billions in infrastructure investment also generate federal, state and local tax.

Aside from the employment and dollar figures, many of the STIP an TCRP projects play critical roles in the state, regional and local economy by improving access to economic and social capital engines, promoting greater regional integration, assuring public safety, and assisting in downtown revitalization efforts. All of these benefits will have multiplier effects advancing not only the local communities’ economy, but also the region’s and the state’s economy in a long run.

Compromises in STIP and TCRP funding could be extremely deleterious for California. First and foremost, jobs statewide created by STIP and TCRP projects will be at stake, not to mention one out of every fourteen California workers, who are working in the transportation industry, and their families will be negatively affected. In addition, billions in personal earnings, taxes and other expenditures generated through these projects will also evaporate. Matching federal funds to transportation deliver projects are subject to being lost. Traffic congestion will increase, resulting in greater loss in productivity. Air quality will suffer.

Regional Picture:

Many of the STIP and TCRP projects do not only serve the immediate locales, but they also benefit the entire region and even the country. The enormous long-term large scale benefits of STIP and TCRP projects can be partially demonstrated through the projects like:

Transportation infrastructure as economic infrastructures: STIP and TCRP fund the construction of SR-111 and other freeways designated as International Boarder Trade Corridors to improve the goods movement between California and Mexico. Also STIP and TCRP projects improving access to Orland Airport in Glenn County, Port of Huememe and other transportation facilities are the basis for enhancing local and regional economic infrastructures for future growth. The benefit of improving these economic infrastructures will expand to the entire region or even the state for years to come.

Regional Integration: Regional integration is as important as improving local transportation infrastructures, given the fact that today’s economic and social activities are rarely constrained by local boundaries. Projects enhancing regional integration are crucial for these regions to continue to grow complementarily in the future. Some of these STIP and TCRP projects include: I-205 connecting the Central Valley and San Francisco Bay Area, improvements on connecting Amtrak, Metrolink and other regional transportation services in Southern California, HW-17 commuter buses connecting Santa Cruz with the San Francisco Bay Area.

Promoting Economic Engines: The health of an economic engine certainly relies on a well-established transportation network connecting it to other economic components. It is therefore imperative to maintain and ameliorate the economic engines’ access in order to better the economy. Transportation corridors are the arteries for goods movement.

Accessing Social Capital Engines: An efficient transportation system also enhances people’s access to social capital engines, which will in return generate greater economic benefits for society in the long run. STIP and TCRP projects seeking improvements on access to social capital engines include: SR-99 and local projects linking to the new University of California, Merced campus, California State University, Channel Islands campus and other institutes.

Downtown Revitalization: A deteriorated network will usually result in a deteriorated downtown, and improving access to downtown is often the first step to witness downtown revitalization. Many STIP and TCRP projects serve this purpose well, such as Coaster Commuter rail improving City of Oceanside’s downtown access, City of Tracy downtown multi-modal station, etc.

Safety Assurance: To assure the safety the public using the transportation system is one of the primary goals of the government. STIP/TCRP projects have been playing a critical role in achieving this objective for a long time.

Preventative Maintenance: Many regions have invested the TCRF and STIP funding on preventative maintenance. Loss of revenue for local cities and counties to maintain streets will result in more streets falling into reconstruction and a backlog of deferred maintenance. A street which needs to be reconstructed can be ten times the cost compared to preventative maintenance.

The following are specific regional concerns on the economic impacts of potential cutbacks on STIP and TCRP projects:

Butte County Transportation Commission

While your request is to document the adverse economic impacts of project delays, Butte County is a rural county without a major port, regional airport or other significant “economic” generator to the state. However, at the local, rural level, the economic impacts as a result to project delays on our transportation system will be significant to a county that is already financially troubled. Butte County, and its incorporated cities do not have the means to “float” projects with local funds as a result of delays. Cash flow on existing projects is a major concern for projects under contract.

Without getting into too much rhetoric, project delays will prevent the delivery of safety and operational projects that significantly affect the movement of resources and goods to and through Butte County.

In BCAG’s opinion the following criteria should be considered in prioritizing projects:

Projects currently under contract
Safety projects
Projects requesting an allocation for construction
Proposition 35 projects where the local agency has committed resources to staff positions to manage these projects and consultants have been acquired.
Projects that leverage other federal funds with STIP funds
Grandfathered STIP projects that are nearing construction
TCRP projects are the responsibility of the respective county where the project is located – not “off the top of the STIP.”

Glenn County Transportation Commission

The Glenn County Transportation Commission has allocated and spent all its STIP funds from the prior STIP cycles in a timely manner. Two bridge projects did not proceed because of lengthy environmental review processes. The road systems in the County and the two incorporated cities have seen a dramatic upturn with the completed STIP projects, but there are still many miles of road that need rehabilitation. The County Road 27 projects are to improve a vital east-west connection between Interstate 5 and eastern California. The prospect is to designate the road a truck route to eliminate truck traffic in the city of Orland for safety reasons and to provide a quicker and safer route for large trucks. The programming of these projects was delayed to the outer years of the STIP because of the limited funding in the first years and further delay will increase the cost and safety concerns. The same is true of the County Road 200 project. This road provides access to recreational areas of Glenn and Tehama Counties. The road is in dire need to rehabilitation. Further delays will increase the cost because the road will be in worse condition and also increase safety concerns.

Glenn County is in the process of developing an industrial park near the Orland Airport. The County Road 27 and County Road P projects are lynch pins to this development. A smooth, quick access from Interstate 5 on County Road 27 to County Road P to the Industrial Park is a benefit for economic development in this area. The industrial park development would create jobs and increase the economic base of Glenn County.

Imperial County

STIP projects:

Ø New Route 7 Expressway-Construct 4 lane expressway

SR-7 is a NAFTA route and with the recent federal decision to expand the access to Mexican trucks, delaying the project will delay delivering times for trucks that need to continue to take a round-a-bout way to reach points north. Safety issues arise as we will continue to see truck traffic mix with local farm traffic. Air Quality/Environmental concerns – lands now in state ownership are going to be fallow to farming in many areas until the expressway is completed. A delay in construction will harm the region economically until the land is once again harvested.

Ø Brawley Bypass- Construct 4 lane expressway and interchange

The purpose of the Brawley Bypass is to reduce traffic impacts in the downtown area of Brawley and to accommodate increased regional and international traffic due to the North America Free Trade Agreement (NAFTA). This project is the last in a series of projects that provide a complete expressway from the U.S./Mexico Border to I-10 in Riverside County. Completion of this project will greatly enhance inter-regional and international movement of goods and services though the Imperial Valley and accommodate the growing demands of the region. Along with SR-111, this project is part of the NAFTA Network (NET) and has been designated as International Border Trade Corridors (IBTC) and Intermodal Corridors of Economic Significance (ICES). The IBTC is a transportation network in Imperial, San Diego and Riverside Counties that link the international border regions to the existing transportation system. The ICES system includes these corridors that are most essential to the California economy in terms of national and international trade.

This project would directly create approximately $14,000,000 in wage income. These wages would have an additional multiplier effect of 1.997 on service and support jobs resulting in indirect wages of approximately $28,000,000. Economic benefits from profit and materials are often seen outside of the construction area but most of the wage income benefits are likely to be utilized in the immediate area. This constitutes a substantial benefit to Imperial County’s economy.

If this project is delayed or deleted it would undoubtedly have a major impact on the economy of the region and the State.

Ø Pavement rehabilitation for SR 111 Relinquishment

The purpose of this project is to rehabilitate SR-111 prior to relinquishment to the County of Imperial. After construction of the new SR-111 (see 4-lane expressway) , existing 111 will be relinquished to the County of Imperial as a major frontage road serving local traffic and slow-moving agricultural vehicles. Delaying or deleting this project would result in further deterioration of the pavement, increased maintenance costs and safety issues.

Ø Reconstruct I-8 / Imperial Ave interchange

Elimination of this project will impede access to the existing and future development south of El Centro, along Imperial Avenue. By 2020 traffic on this section of I-8 is projected to increase by 50 percent. Delaying or eliminating this project will contribute to the increased congestion and operational deficiencies of the existing interchange.

Ø 4 lane expressway, Keystone to Route 78

This project is the third in a series of projects that provide a complete expressway from the U.S./Mexico Border to I-10 in Riverside County.

Along with the Brawley Bypass, this project is part of the NAFTA Network (NET) and has been designated as International Border Trade Corridors (IBTC) and Intermodal Corridors of Economic Significance (ICES). The IBTC is a transportation network in Imperial, San Diego and Riverside Counties that link the international border regions to the existing transportation system. The ICES system includes these corridors that are most essential to the California economy in terms of national and international trade.

The project would directly create approximately $4,000,000 in wage income. These wages would have an additional multiplier effect of 1.997 on service and support jobs resulting in indirect wages of approximately $8,000,000. Economic benefits from profit and materials are often seen outside of the construction area but most of the wage income benefits are likely to be utilized in the immediate area.

If this project is delayed or deleted it would undoubtedly have a major impact on the economy of the region and the State.

Ø Route 98 Widening (West of Route 111)

Elimination of this project will impede international and interregional movement of people, goods and services between Mexico, Calexico and beyond due to of increased congestion within the City of Calexico. Elimination of this project will not address the concerns of the community regarding pedestrian and motorist safety due to the conflicts associated with the high truck volumes within the project limits.

Ø Widen State Route 98 (Near Calexico - Route 111 to Rood Rd)

Elimination of this project will impede the accommodation of NAFTA, interregional and local traffic by not allowing for improved access between the new Calexico East Federal Port of Entry to SR 11 and beyond.

Ø Brawley Bypass- Ross to Worthington - Construct 4 lane expressway

The construction of this project was completed in December 2002 and therefore it cannot be delayed or deleted.

This project is the first in a series of projects that provide a complete expressway from the U.S./Mexico Border to I-10 in Riverside County.

Ø 4 lane expressway, Worthington to Keystone

This project is the second in a series of projects that provide a complete expressway from the U.S./Mexico Border to I-10 in Riverside County. Construction of this project is about 75% complete. Terminating this contract would leave the corridor incomplete and would create liabilities with the contractor performing the work and with the traveling public.

Ø Mitigation work for 4 lane expressway, Keystone to Route 78

Project can not be deleted as it is required mitigation work for SR-111.

TCRP projects:

Ø TCRP # 148.1 Widen State Route 98 (Near Calexico - Route 111 to Rood Rd). Elimination of this project will impede the accommodation of NAFTA, interregional and local traffic by not allowing for improved access between the new Calexico East Federal Port of Entry to SR 11 and beyond.

Ø TCRP # 148.2 Route 98 widening between Route 111 and Route 7.

Project has been completed. No lost economic opportunities.

Los Angeles County Metropolitan Transportation Agency

Economic Impacts of Delayed or Eliminated Projects

February 7, 2003

The MTA has studied the economic impacts of suspending $8.4 billion in highway and transit capital investments contemplated by the financially constrained Long Range Transportation Plan for Los Angeles County. The study covered the period between FY 2003 and FY 2009 that corresponds with the terminus of the next Federal transportation reauthorization and the next State Transportation Improvement Program.

The State of California General Fund deficit crisis could cause the loss of one third or more of the $8.4 billion program in Los Angeles County due to the impact of the deficit upon the Traffic Congestion Relief Program. The study results reveal that the suspension of one third of the $8.4 billion program would cause a large number of job losses, substantial negative effects to economic productivity, and the loss of tax revenues stemming from the negative effects on the economy due to increased traffic congestion.

Using the Regional Economic Models, Inc. (REMI) forecasting methodology, the MTA estimates negative impacts in Los Angeles County in 2009 if the entire program were to be suspended. About one third of these impacts are forecasted to arise from the State’s General Fund deficit crisis as shown in Table 1, below, unless solutions are found.

Major Economic Impacts of the State General Fund Deficit on

Los Angeles County*

Table 1

Economic Indicators	Cumulative Amount 2003-2009	Annual Amount in 2009
Loss of Full Time Equivalent Jobs	38,987	8,567
Loss in Business Output	$ 4.0 Billion	$ 975 Million
Loss in Personal Income	$ 2.3 Billion	$ 537 Million
Loss in State Government Revenues	$ 271 Million	$ 61 Million

*Assumes structural deficit in State General Fund prevents all TCRP project funding through FY 2009.

Madera County

The following table summarizes impacts to Madera County in the event that STIP projects are delayed or eliminated:

Project Name & Description	Description of Impact	Estimated Dollar Value of Loss ($ in thousands)	Potential Jobs Lost
SR99/145 Upgrade: s/o Gateway Drive off ramp to n/o South Madera Overcrossing, Rte 145/99 Separation – modify interchanges	Delay relief of congestion. It is critically important to the community that this project be completed to provide direct access to the Madera Community Hospital from Fwy 99.	$8,550	110
Various local rehab projects in the City of Madera	Construction is complete. The loss to the City of Madera would equal the construction cost for all projects.	$1,281 CTC Allocation & prog supplement executed	0
Planning, Programming & Monitoring	Would seriously impact the ability to perform planning functions including those functions necessary to comply with regulatory requirements.	$150	1-2
Cleveland Ave – widen street to provide shoulders and parking, construct median, pavement rehab.	Contract is awarded. Loss of jobs would result if construction is delayed/eliminated. It is undesirable to delay the safety improvements that this project will provide.	$746 CTC Allocation & prog supplement executed	30
CMAQ match reserve	Funds are match to three alternative fuel vehicle projects and the Fresno River Trail project. Each project is intended to reduce emissions in Madera County. Delay will affect timely implementation of TCMs.	$67	0
Various rehab projects	Implementation has already been delayed as a result of the recent re-spreading of STIP funds. Work is urgently needed to prevent further deterioration of roads.	$2,000	22
Olive Ave from Q St. to I St; reconstruct and widen to 4 lanes w/ median	Project was already delayed as a result of the recent STIP respreading. Project is greatly needed to reduce congestion and improve safety at and near the Madera High School – North campus.	$750	18
Almond Ave. new connector and RR crossing, from Schnoor Ave to Pine St.	Delay of project would impact circulation of traffic in a growth area.	$500	8
Madera Amtrak Station relocation (STIP-IIP)	Delay of project would prevent timely implementation of safety improvements and adversely affect ridership.	$800	1
Fairmead Interchange & 6-lane freeway (STIP-IIP)	Funding delay would delay important safety improvements: elimination of the last existing “at grade” SR 99 access points within Madera County.	unavailable	unavailable
Robertson Blvd, widen and construct sidewalks	Would experience loss of construction and engineering jobs.	$500	3
Rehab: Ventura Ave from 3^rd to 4^th St and from 4^th to 9^th St.	Would experience loss of construction and engineering jobs.	$100	2-3

Merced County

STIP Projects

All of the Highway 99 Projects in Merced County

Upgrading Highway 99 from expressway to freeway status within Merced County is a statewide priority. The at-grade crossings create a major safety concern for all who travel on this road. The unsafe conditions of this major state facility are exasperated because of the adjacent railroad tracks and the fog.

Highway 152 Bypass

The Highway 152 Bypass has been Merced County’s number one priority project since 1992. This project provides a bypass around the City of Los Banos- the fastest growing city in the County.

Campus Parkway

Campus Parkway provides access to North Merced, the New UC Campus and the Santa Fe Industrial Park from Highway 99. If the TCRP funding was eliminated this project would be not be constructed. The project was fortunate to received TEA-21 demonstration funding in the amount of $11 million and these funds would be lost to the State if the project was eliminated. Plus funds already expended would need to be returned.

YARTS Staging Areas

The YARTS project supports an alternative means of transportation the 4 million visitors a year to Yosemite National Park. YARTS is a unique coalition of local, state and federal governments providing an alternative means of transportation to one of the most famous national parks, Yosemite. The economies of Mariposa, Merced, and Mono Counties are dependent on the visitors that come into the region each year, and by providing and supporting this service allows the counties to guarantee access to Yosemite National Park.

Highway 140 Bradley Overhead

This project replaces an antiquated two-lane bridge over the Santa Fe Rail Road Tracks. The STIP funding supplements SHOPP funding by increasing the capacity of the bridge. The coordination of these two funding sources saves approximately $25 million in STIP funding by constructing one project instead of two.

Existing Highway 59 Project

This project remedies Merced County’s existing “Level of Service F” congestion problem that has been a problem for many years. It provides a vital connection from North Merced to Highway 99 and South Merced.

Castle Highway Project

The programmed RIP funding initiates a 10-year environmental process to realign the existing Highway 59 to connect 99 and 140. Delaying the environmental review will increase the cost of construction.

Freeway Planting Project

Is a very small project to beatify Highway 99 in Delhi and Livingston. This project is under construction at the present time.

Metropolitan Transportation Commission

(Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Solano, Sonoma Counties)

Economic Loss Summary for the Bay Area

STIP

The MTC region has $0.56 billion in outstanding STIP fund allocations representing significant infrastructure enhancement projects such as Route 87 Freeway Corridor, Route 29/37 Interchange, and I-680 HOV Lanes. In addition, there is roughly $1.07 billion in committed STIP funding that has not yet been allocated. In total, this $1.64 billion in STIP funding would create roughly 27,250 construction jobs and 54,500 in related service jobs. The associated wage earnings – or potential loss should these projects be delayed – is $4.09 billion. The related state, local and federal tax income is $1.43 billion.

TCRP

The MTC region has $0.51 billion in outstanding funding allocations for TCRP projects, including funding for Muni Third Street Light Rail Extension and Caltrain Express. These projects sponsors have, in most cases, entered contracts for project work and any delays in fund availability will have immediate effects on construction jobs. The $0.51 billion in allocated funding creates 8,500 construction jobs and 17,000 in related service jobs. Somewhat less immediate but just as important for the economy in the long-term, the Bay Area has $0.94 billion in unallocated TCRP funding. Among the projects funded with these monies are BART to San Jose, Route 4 widening, and Caltrain expanded service to Gilroy. The unallocated TCRP funding commitments are associated with 48,000 total construction and service jobs. All jobs that could be created by the TCRP projects would generate roughly $3.63 billion in wage earnings and $1.27 billion in taxes income for federal, state and local governments.

Table A summarizes Bay Area STIP and TCRP job and economic losses and outlines MTC underlying assumptions. While the above factors have been taken into consideration to evaluate the Bay Area economic loss as a result of proposed transportation funding cuts, there are still more impacts, such as the sales and other tax revenue loss as well as the travel time loss, which could be significant but are difficult to quantify.