EconWorks Evaluation /
Illinois Department of Transportation, Office of Planning and Programming
11/26/2015
Final Report
EconWorksCase Studies
Table of Contents
EconWorks Study Purpose ……………………………………………………………………………………………………………………………………………3
IDOT Program Planning Process Background………………………………………………………………………………………………………………. 3
Economic Impact Analysis of Highways During System Planning Phase……………………………………………………………………….. 5
Economic Impact Analysis of Highways During Project Programming Phase…………………………………………………………………10
MAP-21………………………………………………………………………………………………………………………………………………………………………..12
IDOT Experience Using EconWorks……………………………………………………………………………………………………………………………….13
APPENDIX A – Data Repository Containing Case Study and Planned Projects Information:
Past Projects for Case Study Inclusion:
- I-80/Ridge Road Interchange, Minooka, (IDOT District 1)
- IL-255/Gateway Commerce Center Interchange, Edwardsville (IDOT District 8)
- I-57/Veteran’s Memorial Drive Interchange, Mt. Vernon (IDOT District 9)
Planned/Current Projects Used to Evaluate EconWorks "Assess My Project" Tool:
- I-57 at Curtis Road Interchange in Champaign (IDOT District 5)
- Olympian Drive Extension East in Urbana (IDOT District 5)
- I-255 Interchange at Davis Street/Ferry Road, Dupo (IDOT District 8)
- Herrin Road & Reed Station Road Extension, Carbondale (IDOT District 9)
- US 150 (EB) War Memorial/McCluggage Bridge, Peoria (IDOT District 4)
- Stanford Avenue, Springfield (IDOT District 6)
- I-90 Corridor Reconstruction, Rockford (IDOT District 2)
- IL 336 Bypass, Macomb (IDOT District 4)
APPENDIX B – Illinois Case Studies for Inclusion in EconWorks:
- I-80/Ridge Road Interchange, Minooka, (IDOT District 1)
- IL-255/Gateway Commerce Center Interchange, Edwardsville (IDOT District 8)
- I-57/Veteran’s Memorial Drive Interchange, Mt. Vernon (IDOT District 9)
SHRP EconWorks Study Purpose
ThesecondStrategicHighwayResearchProgram (SHRP 2) was authorized in 2005 aspartoftheSafe,Accountable,Flexible,EfficientTransportationEquityAct:ALegacyforUsers(SAFETEA-LU). The program is administeredbytheFederalHighwayAdministration (FHWA)incooperationwiththeAmericanAssociationofStateHighwayandTransportationOfficials (AASHTO), and theTransportationResearchBoardoftheNationalAcademies (TRB).The programis modeledafterthefirstStrategicHighwayResearchProgram (SHRP), and isa “focused,time-constrained,management-drivenprogramdesignedtocomplementexistinghighwayresearchprograms,”[1]and focusesonappliedresearchinfourareas:
- Safety,topreventorreducetheseverityofhighwaycrashesbyunderstandingdriverbehavior,
- Renewal,toaddresstheaginginfrastructurethroughrapiddesignandconstructionmethodsthatcauseminimaldisruptionsandproducelastingfacilities;
- Reliability,toreducecongestionthroughincidentreduction,management,response,andmitigation;and
- Capacity,tointegratemobility,economic,environmental,and communityneeds in the planning anddesigningofnewtransportationcapacity.
The SHRP 2 Capacity focus area is “broadly based on the concept that better consideration of the social, environmental, and economic effects of highway projects as they are planned, programmed, and carried out will result in improved projects. Capacity Project EconWorks was designed to create a large database of case studies and a web-based tool that allow for more rapid assessment of the long-term economic impacts of highway capacity projects. The main result of the project is that economic impacts can be considered for a greater number of potential projects, and this step can take place earlier in the planning process.”[2] The web-based tool that was developed is called EconWorks.
To strengthen economic impact analyses of highway projects, FHWA has granted funds to the Illinois Department of Transportation (IDOT) to participate in the development and deployment of the EconWorks economic analysis tool. As part of this project, IDOT is exploring options for the integrationof economic analysis into its policy and procedures. IDOT will be using its experience to facilitate discussions and advance efforts to integrate the use of economic analysis in transportation planning, particularly in the program development phase of transportation planning. This report provides background on the historic and existing use of economic impact analysis in the system planning and project planning phases of IDOT’s transportation programming process. It also documents the potential of the EconWorks tool to provide economic impact analysis for projects prior to their inclusion in the program development phase.
IDOT Program Planning ProcessBackground
Report Definitions Describing Project Programming Phases
Each project programming agency or Metropolitan Planning Organization (MPO) may use different terminology to describe the various phases of project programming. At IDOT, the transportation program planning process is broken into four key phases:
- The Systems Planning phase involves highway network condition surveys for pavement, bridges and safety performance to determine existing system physical needs. Traffic congestion and travel demand are utilized to determine the need for system modernization and capacity expansion. Public and political initiatives might also identify potential projects for program consideration.
- The Program Development phase involves the selection of projects to address the needs identified in the Systems Planning phase and schedules those into a multi-year and annual program.
- The Project Planning phase, sometimes referred to as Preliminary Engineering, involves the engineering and environmental studies needed to properly plan for, mitigate impacts from, and design the overall project.
- The Implementation phase refers to actual project construction.
Economic Activity, Economic Impacts, and Economic Development Related to Transportation Projects
Transportation investments are traditionally motivated by the need to improve safety, alleviate congestion, enhance mobility and accessibility, and increase reliability of transportation networks. However,in addition to transportation-related considerations, the promotion of economic activity and economic development are regional goals. Traditionally, transportation investments are viewed as a mechanism to promote economic activity and development in a region.
Economic activity refers to the production, distribution and consumption of goods and services by businesses and end users. All transportation investments bring about economic activity, but not all transportation investments result in economic development of a region. Transportation investments bring about economic activity primarily by improving mobility, increasing accessibility, alleviating costs, and increasing reliability. Transportation investmentsmay result in economic activities by reducing costs, improving quality and quantity of labor pools, increasing the size of consumer markets, improving efficiency and productivity, increasing competitiveness, and altering location patterns.[3]
Economic impacts can be classified as direct, indirect, and induced impacts. Direct impacts refer to economic activities that result from improving the economic efficiency of end users caused by the transportation investment. Indirect impacts result from economic activity that is needed to support the direct economic impacts. Induced impacts involve economic activity that results from additional income afforded to employees, and wealth accumulated by businesses; and they also include other tertiary and perpetuity economic activity resulting from market access changes, increased competitiveness and attractiveness of the region and due to changes in economic structure.
Economic development refers to a sustained change in economic activity leading to improvement in the jobs, wealth, tax base, and well-being of a neighborhood, city, region, or state. Principal measures of economic development are Gross Domestic Product(GDP) at the national scale,Gross Regional Product (GRP), or Gross State Product (GSP). GDP is defined as the monetary value of the output of all goods and services within a country during a certain period of time.[4] A transportation system facilitates the economic development activity in a region by influencing the movement of people, activities, goods, and services. However, a transportation system is one of several factors causing economic development in a region, including land use, policy, and legal structures.
Typically, there are five specific factors at the root of economic development and transportation projects.[5] Measures used in the analysis can include:
- Reduced costs for freight shipping and for business–related travel,
- Expanded market reach, such as, increased choices of freight shipping methods and routes,
- Reduction in household travel costs, which increases disposable income,
- Improved job access,
- Improved quality of life due to less traffic noise
There may not be a direct translation between economic benefits and new development because other factors, such as labor, land and housing costs, taxes, regulatory environment, market characteristics, and resources[6] are important independent variables. However, most transportation improvements have a relatively small impact on total production costs. An example of a roadway project with potential to generate substantial economic development might be a new or greatly improved connection to an industrial district, port, or airport where traffic congestion or lack of access has been an impediment to growth.
Economic Impact Analysis of Highways During the System Planning Phase
Historically, IDOT has not used projections of potential economic growth to justify transportation improvements. This conservative investment perspective derives from a long period of insufficient funding for transportation programs and increasing needs to improve safety, maintain systems, and address increased travel demand. The roots of this conservative perspective grew from a series of events that occurred in the late 1960s and early 1970s, including the publication of an Illinois Supplemental Highway Plan to extend four-lane highways across the state, an interstate highway improvement built primarily to support an industrial development along the Illinois River that failed, and the negative impacts of the OPEC oil embargo that raised gasoline prices and led to an economic downturn in the 1970s.
Background
Economic impact analysis of IDOT projects prior to their inclusion in multi-year highway programs is limited. In the late 1960s, the Hennepin I-180 extension was built for a Jones & Laughlin steel plant that closed soon after construction was completed. This investment included the construction of an interchange on I-80 near Princeton, Illinois, a major bridge crossing the Illinois River, and thirteen miles of interstate to the Hennepin site. A 1970 General Accounting Office (GAO) report on the I-180 project noted, “no other interstate spur route has been constructed primarily to serve a private manufacturing company, and no other interstate spur route serves such a small population.”[7] While the facility subsequently went through a series of owners, periodically opening and closing, it shut down permanently in 2009 and this road segment continues to be lightly used. This project, which failed to generate the economic benefits promoted by local interests, had a significant negative impact on IDOT management’s view of using potential economic benefits to measure the need for highway projects.[8]
In the 1970s, IDOT operated in a fiscal environment that was flush with highway fund revenues. Many believed that new road construction would be easily financed by the growing fuel consumption that America was experiencing. However, this fiscal outlook changed dramatically in the next decade. The OPEC oil embargo of the 1970s raised gasoline prices significantly throughout the nation resulting in demand for fuel-efficient vehicles, political sensitivity to gas tax increases, and ultimately a reduction in fuel consumption and highway fund revenues. Ultimately, only selected segments of the Supplemental Freeway System that was proposed to expand the network of four-lane highways across the state prior to 1970 were retained for potential construction.[9]
During the hyperinflation period of the 1970s, the slowing growth in gasoline tax revenues contributed to IDOT’s view of the future. To address the growing tension created by problems on the highway system and the limited availability of funding, IDOT began limiting its support for system expansion projects. Eventually, the Illinois State Highway System’s pavements were at what IDOT considered dire backlog levels[10], needing immediate resurfacing or reconstruction. As a result of dire conditions, IDOT initiated a conservative preservation approach to project selection limiting programs to projects that demonstrated existing safety or travel demand needs that would last over the next four decades. Projects proposed solely for potential economic reasons were only considered and programmed by IDOT when they demonstrated public and political support and the ability to generate new or dedicated funding from the legislature.[11]
Some projects that may not have been warranted by existing travel demand did get built based on other factors. For example, the construction of I-72 between Springfield and Quincy was not supported by IDOT but was built after local proponents gained political support and funding became a reality.[12] Today, the section of I-72 between the US 67 interchange near Jacksonville and the I-172 interchange near Quincy averages 5,800 to 7,800 vehicles per day -- the lowest on the Illinois Interstate System except for the previously mentioned I-180.[13] There are many other examples of transportation investments throughout the state that did not result in significant economic development despite local expectations of growth.
In some cases, IDOT responded to intense public pressure by conducting “feasibility studies” to determine the appropriateness of funding construction. These feasibility studies evaluated proposed highway corridors, estimated project construction costs, and identified travel demand needs, environmental issues and economic impacts. Since these projects were often developed with different parameters, the character of the economic assessments would be framed to the specifics of each particular project. Some studies determined what level of improvement, if any, was the best transportation investment. Several studies considered alternatives for road improvement, while others considered tolling viability for proposed projects.
Economic Development Program
In response to economic downturn of the 1970s, IDOT began its Economic Development Program (EDP) to consider immediate development opportunities.[14] To reduce risk, IDOT began requiring letters of commitment from private-sector participants and required local government sponsors to repay the State if a facility that utilized the program closed within five years.[15] Program funding was typically limited to $10 million per year and individual projects were limited to $2 million. Improvement projects funded through this program often required stakeholders to prepare intersection design studies and meet standard traffic warrants. IDOT limited projects to industrial development that created jobs, but was eventually expanded supported research and development or high volume tourism attraction.
Economic Impact Analysis Tools
IDOT’s feasibility studies for limited access highway corridors are the best fit for assessing how economic growth prospects were considered by the agency in the past. IDOT feasibility studies conducted since 1980 involving the Office of Planning & Programming (OP&P) include the Economic Development Strategy for Southwestern Illinois (1986), the U.S. Route 51: Decatur to I-64 Planning Study (1987), and the Heart of Illinois Highway Feasibility Study (1995). Common themes in these studies include a lack of adequate funding to construct the highway facility, limited transportation benefits, and the strong assertion from local proponents that the facility was needed to spur economic development.
Economic Development Strategy for Southwestern Illinois (1986)[16]
The Economic Development Strategy for Southwestern Illinois was a response to 1984 legislation that provided IDOT funding for a preliminary engineering study of a limited access four-lane highway between Belleville to Carbondale, Illinois. Since traffic volumes in the region did not indicate that there was an immediate need for the construction of a major highway corridor, it sought and received Governor James R. Thompson’s support for a multi-agency effort to consider the economic development opportunities of the region and match public infrastructure investments to support those opportunities.
The study area was defined as a nine-county region bounded by the Mississippi River to the west, Illinois Route 51 to the east, Interstate 64 to the north, and Illinois Route 13 to the south. The study identified various development opportunities for the region, assessed the implications of growth forecasts and set forth development options and strategies. Over 12,000 direct jobs were projected by 2005. Largest among these opportunities were distribution services (7,000), integrated poultry processing (2,100), and fresh vegetable production and processing (1,400). As many as 45,000 new employees would ultimately locate to the region by 2005.
Of the various options considered to support the region’s development opportunities and best guide state highway investment over the next twenty years, the multi-agency study advanced a Concentration of Opportunity Option in which infrastructure investments would either be encouraged or would naturally concentrate in nodes or clusters of development to accommodate development opportunities.
The study concluded thatinvestments by local communities and regional groups would be concentrated generally in areas of larger populations making those investments more affordable and impactful. Furthermore, development around the St. Louis and Carbondale-Murphysboro-Marion areas would be enhanced because of improving access to those metropolitan regions and concentration of investment and employment would set the stage for increased economic development due to better infrastructure, services, and other supporting economic activity in the area. The study also concluded that highway improvements would lead to development of a high-type highway corridor by concentrating improvements at the ends of the corridors. If the pace of development exceeded the forecast in the report, steps could be taken to develop the corridor earlier. However, immediate construction of a high-type highway was not justified as the study could not demonstrate need and highlighted a reliance on intangible benefits as justification.
A four-lane segment of Illinois 127 now runs north from Murphysboro to outside the city limits and a four lane-segment of Illinois 3 has been built from the I-255 interchange near Dupo, south through Columbia, and ending at the north side of Waterloo.
U.S. Route 51: Decatur to I-64 Planning Study (1987)[17]
In 1986, state legislators, local elected officials, and community leaders met with IDOT to request that the US 51 Decatur to I-64 corridor be upgraded to a four-lane facility. A 1980 IDOT study determined that four-lane construction was not warranted based on traffic volumes and existing capacity; however, the delegation argued that traveler safety and the area’s economic potential could be enhanced by this upgrading. IDOT agreed to conduct a planning study to determine the appropriate nature of a four-lane highway facility to connect the US 51 bypass south of Decatur to the US 51/I-64 interchange south of Centralia.
The study identified engineering and environmental issues along the corridor, established priorities for implementing segments of the corridor based on economic development potential, and determined appropriate interim actions to be pursued by IDOT. The report was conducted internally by IDOT, led by the Division of Highways (engineering) and supported by OP&P (economic analysis and planning coordination).