George A. Fulton
Published: 2008
Total Pages: 0
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A well-maintained and efficient transportation system provides the backbone for all economic activity within Michigan. Included in the economic effects are transportation-related benefits in the form of time savings for households and businesses, as well as the beneficial effect of an increase in construction and engineering activity. Each transportation investment decision MDOT implements has direct implications for Michigan's economy. The purpose of this study is to measure the differences in the effects of alternative highway investment mixes on Michigan's economy. We estimate the differences in economic effects on Michigan of alternative investment mixes by reducing road-bridge rehabilitation and repair (R & R) priorities as increased capacity/new roads (IC/NR) investments are increased. This report identifies the effect on Michigan's economy of each mix, and then identifies the portfolio that best stimulates the economy. The alternatives reflect different priority choices, shifting emphasis between R & R and IC/NR. The analysis of the economic effects of alternative investment mixes includes estimates of the spin-off benefits, as generated by the REMI (Regional Economic Models, Inc.) model of the Michigan economy. The projects to be included in each alternative investment bundle were identified based on their ranking within the model and their cost to complete. Four alternative investment bundles were compared against the baseline condition, which reflects the current strategy of devoting 10 percent of highway program funding to IC/NR. As more investment shifts toward IC/NR there is less reliance on MDOT staff for P/E activities and, even more significant, zero reliance on MDOT staff for construction. Any of the investment alternatives representing a shifting of funding toward increased capacity is superior to the heavy preservation spending associated with the baseline.
