EconWorks - IDOT Report to FHWA on the Use of Economic ...



EconWorks - IDOT Report to FHWA on the Use of Economic Impact Analyses in Transportation PlanningEconWorks EvaluationIllinois Department of Transportation, Office of Planning and Programming11/26/2015Final Report EconWorks Case Studies Table of ContentsEconWorks Study Purpose …………………………………………………………………………………………………………………………………………… 3IDOT Program Planning Process Background………………………………………………………………………………………………………………. 3Economic Impact Analysis of Highways During System Planning Phase……………………………………………………………………….. 5Economic Impact Analysis of Highways During Project Programming Phase…………………………………………………………………10MAP-21………………………………………………………………………………………………………………………………………………………………………..12IDOT Experience Using EconWorks……………………………………………………………………………………………………………………………….13 TOC \o "1-3" \h \z \u 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 The second Strategic Highway Research Program (SHRP 2) was authorized in 2005 as part of the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU). The program is administered by the Federal Highway Administration (FHWA) in cooperation with the American Association of State Highway and Transportation Officials (AASHTO), and the Transportation Research Board of the National Academies (TRB). The program is modeled after the first Strategic Highway Research Program (SHRP), and is a “focused, time-constrained, management-driven program designed to complement existing highway research programs,” and focuses on applied research in four areas: Safety, to prevent or reduce the severity of highway crashes by understanding driver behavior,Renewal, to address the aging infrastructure through rapid design and construction methods that cause minimal disruptions and produce lasting facilities; Reliability, to reduce congestion through incident reduction, management, response, and mitigation; and Capacity, to integrate mobility, economic, environmental, and community needs in the planning and designing of new transportation capacity.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.” 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 integration of 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 Process BackgroundReport Definitions Describing Project Programming PhasesEach 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 ProjectsTransportation 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 investments may 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. 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. 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. 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 noiseThere 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 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 PhaseHistorically, 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.” 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. 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.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, 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.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. 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. 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 ProgramIn response to economic downturn of the 1970s, IDOT began its Economic Development Program (EDP) to consider immediate development opportunities. 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. 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 ToolsIDOT’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)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 that investments 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)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).From a strategic economic development perspective, the construction of a four-lane US 51 facility in this corridor intended to provide a direct north-south connection to facilitate improved commercial traffic flow between northern Illinois and markets in southern states. The US 51 upgrade would be the final four-lane link for I-55/I-39 to I-57 south via US 51/I-64. For local economic development, the enhanced access to developable land would improve land values and potentially lead to industrial jobs along the corridor. The potential for economic development was assessed based on: Strengths of organized economic development programsExisting water and sewer infrastructure capacity to support economic developmentAvailability of registered industrial sites and buildingsHistory of business retention and jobsPotential of the corridor to attract growth industries identified by Governor James R. Thompson’s Office.At the time of the study, the four largest communities along the corridor included Decatur, Pana, Vandalia and Centralia. These cities were considered to have the greatest economic development potential. Major employers along the corridor included Caterpillar, ADM, and Staley (now Tate & Lyle) in Decatur; Essex Wire in Pana; Brockway Plastics in Vandalia; and Rockwell International and Swan in Centralia. Other towns along the corridor were primarily agri-business centers. Grain Systems Inc. in Assumption, Illinois, was the largest employer among these communities.The study was to determine which segments provided the best opportunity for economic development and should be prioritized for construction if a four-lane facility was constructed along the corridor. Economic priority was to be assigned even though traffic volumes did not justify construction. Four segments – Decatur to Pana, Pana to Vandalia, Vandalia to Centralia and Centralia to I-64 – were identified with criteria used to assess which segment would contribute the greatest benefit, including existing four-lane access, economic retention, and highway usage by existing industry. Although not cited as a priority criterion, utility preparedness was also a factor in evaluating the potential for each segment. The study concluded that the Centralia to I-64 segment should proceed first due to the location of an industrial park along US 51 on the south side of Centralia, the clustering of plastics manufacturers in this industrial park, and the heavy existing use of the segment by plastic-related chemical trucking. In addition, the plastics industries needed quick access to Lambert Airport in St. Louis for some “just-in-time” deliveries. Recommendations from the study also included:Construction of a new four-lane facility through and around Pana,Construction of a four-lane facility from the south end of the Decatur bypass at Elwin to north of Pana,Construction of a four-lane facility from I-70 to north of the Vandalia Correction Center, Construction of a four-lane facility from the south end of the existing four-lanes in Vandalia south to the abandoned railroad, then southeasterly to the existing alignment.Subsequently, the Centralia to I-64 segment was constructed to four-lanes. The benefit of this facility was reported to IDOT by the Centralia Economic Development Office, which noted a significant increase in jobs in the community and the industrial park. Other segments have also been upgraded to four-lane improvements including: a segment from Elwin south to Assumption, segments in the Pana area and a Vandalia segment from I-70 north to an uncertain point. The section of US 51 between Elwin and Assumption has been programmed and is being constructed as funding allows. An Environmental Impact Study (EIS) has been completed for the section from Assumption to south of Pana, and an on-going EIS for the section from south of Pana to Centralia is underway. The recommended bypass of Vandalia is significantly different than envisioned in the feasibility study. The gap between Assumption and Centralia currently is not funded for construction. Heart of Illinois Highway Feasibility Study (1995)This feasibility study was initiated to determine if a new direct highway corridor between Chicago and Peoria was warranted. The study was not intended “to select a preferred corridor but to determine if there were corridors that were physically, environmentally and economically feasible.” Support for an improved connection between Chicago and Peoria grew from government and public leadership in the Peoria region. In 1992, the need for an improved connection was identified as the region’s top transportation priority. IDOT agreed to conduct a feasibility study that began in 1993 that addressed engineering, environmental, and economic feasibilities. The study was complicated by public interest in a circumferential road around the Peoria metropolitan area, as well as the location of a new bridge crossing over the Illinois River located somewhere north of Peoria.The economic feasibility component of this study attempted to address several questions:In what ways would the new highway affect the national, statewide, and local economies?What magnitude of each type of economic benefit can be expected if the highway is built?Which of the economic impacts are net economic benefits, and which are merely “transfers” from one place to another?How do the various options compare, in terms of their ability to help the economy?What are the economic pros and cons for each corridor alternative?These questions led to a complex economic assessment that factored in travel efficiency, improved competitive position, industrial attractions, agriculture, travel and tourism, roadside business, and the act of road construction itself. The REMI model was utilized to assess economic impacts.The economic assessments were presented as national, statewide, and local economic impacts significantly different results for each geographic parameter. The national perspective provided the least impact, while the local perspective provided the greatest benefit for the study area. The local perspective also represented economic activity shifts from other parts of the state to the study region making it unacceptable for the state; however, when a state perspective bias became evident providing disproportionate benefits to other area rather than projects in the Heart of Illinois region, local proponents raised concerns and desired that the local perspective be used.The industrial attraction factor was a key focal point for the study. Utilizing the Forte model, the study identified specific industry groups that would potentially locate at sites in the study region. The model utilized characteristics of the region’s economic base, labor force, and potential accessibility improvement to identify five industry groups that could benefit from the roadway’s construction, including commercial printing and lithography, plastics, metalworking, electronics and medical instruments. The economic analysis concluded that the Heart of Illinois region had significant economic growth opportunities to diversify the local economy beyond its existing heavy industrial manufacturing base. Funding availability for corridor construction became the key issue to implementation. Funding was provided for the most environmentally sensitive corridor along the west side of the Illinois River, utilizing a new alignment and existing IL 29, but work was halted after the preliminary engineering (PE) work was completed.Economic Impact Analysis of Highways During the Project Planning Phase Once a project is included in a multi-year program, IDOT begins project planning by performing a study, which often follows federal guidelines set forth in the National Environmental Policy Act (NEPA). Environmental studies that reach a Categorical Exclusion (CE) or higher designation, or projects that add new capacity to the system are required to undergo economic analysis. The type of economic analysis utilized in transportation project planning studies is context dependent. The key issues to be considered in determining the appropriate level and type of analysis include the type of project, the project’s purpose and need, the size and scale of the project, and the physical location and environment of the project. Population, employment, and annual daily traffic (ADT) projections are the minimum analyses performed on projects that indicate an economic and social change.Benefit-Cost Analysis The standard economic modeling for transportation projects is benefit-cost analyses (BCA) that focus on measurements of transportation system efficiency - represented in terms of direct effects on travel time, vehicle operating costs, and collision incident costs - collectively referred to as traveler or user benefits. A transportation improvement project can benefit other parties besides just the traveler. In particular, the direct effects on travelers can subsequently lead to broader indirect effects on the economy. For instance, savings in business delivery costs may allow businesses to generate greater income or products to be offered at lower prices leading to economic growth. Savings in household transportation costs may allow households to buy more local goods and services, which can also lead to economic growth. Economic growth can be viewed in terms of added jobs, wages, or value added (GDP); however, transportation improvement projects can also lead directly to wider economic benefits that are not captured by the previously mentioned traveler benefits and their indirect effects. These are impacts on business productivity factors that enable businesses to gain efficiency by reorganizing their operations or changing the mix of inputs used to generate products and services. These effects are sometimes referred to as technology change. Reliability, market access and intermodal connectivity are three classes of transportation system impacts that can directly lead to wider economic benefits for business organization and operation.USDOT’s Economic Analysis Primer provides guidance on the categories of benefits and costs that should be considered in a typical BCA for transportation investments. The benefit and cost categories identified are all related to the direct economic impacts of the transportation investment. According to the primer, BCA is limited to only direct economic impacts based on the viewpoint that economists hold that “the direct benefits and costs of transportation improvements measured using BCA are converted into wider, indirect, economic impacts through the operation of the marketplace. These converted, indirect effects are assumed to have the same net monetary value as the BCA-measured direct effects.” A preference for the more narrow view of benefits in a BCA is partly due to the risk, uncertainty, and difficulty associated with estimating the more long-term and downstream indirect and induced economic impacts of transportation investments.BCA is limited because it does not consider factors such as, financial, political, environmental, social, and welfare impacts and value of the investment in these areas. As Greg Mason noted in his presentation to the Saskatchewan Chapter of the Canadian Evaluation Society, “cost-benefit and cost-effectiveness analysis are decision aids; they are not the decision. These methods can help organize and may reveal both hidden benefits and hidden costs, but the outputs from this method must not be the only input into a policy decision. Any decision on a program, policy, or investment will always involve questions of ethics, intrinsic values, political considerations, etc.”Economic and Social Impact AnalysisAn economic and social impact analysis (also known as a Community Impact Assessment or Community Profile)?is a process for evaluating the effects of proposed transportation projects on a community and its quality of life. The assessment should include all items of importance to people, such as mobility, safety, employment effects, relocation, isolation, and other community issues. The process defines the geographical area for the proposed transportation project, which is a subjective process and requires input from local leaders and professional experience. A variety of demographic data is collected on the applicable tract, as well as city, county, and state levels. The U.S. Census Bureau collects demographic data from the public every 10 years including population characteristics such as race, ethnicity, age, income, poverty, housing type, educational attainment, occupation, and travel patterns. The statistical standard for published data enjoys a ninety percent confidence level. Beginning in 2010, the American Community Survey (ACS) – a nationwide, continuous survey with intervals of one, three, and five years – collects similar information continuously, nearly every day of the year, and then aggregates the results over a specific time period. Environmental Justice and Community Cohesion Environmental Justice (EJ) is the review of distributive effects – analyzing who gets the benefits and who gets the potential negative impacts from a transportation project. For example, even if, there is no direct noise and visual impacts to an EJ area, White House Council on Environmental Quality (CEQ) guidance requires that a cumulative impact analysis be part of the written document. FHWA defines adverse effects as, “the totality of significant individual or cumulative human health or environmental effects, including interrelated social and economic effects.” The term community cohesion describes patterns of social networking within a community. An adverse effect to community cohesion as a result of a transportation project could be the isolation of a portion of a neighborhood or an ethnic group. The negative impact of a new road could create a physical barrier between residents and community facilities; where prior to the transportation change, the facility could be accessed easily. Increased or decreased noise and dust are also considered a traffic-related barrier. Conversely, a transportation project, such as a new pedestrian facility or new bikeway, can improve connections between residents and community facilities. Transportation effects on community cohesion do not necessarily lend themselves to quantitative measures; nevertheless, non-quantitative effects should be documented in the EIS. Economic Analysis Models Economic impact analyses are conducted for the purpose of either estimating the economic impacts or evaluating the value of economic impacts. To estimate economic impacts, a Regional Economic Model (REM) may be used. REM models that are founded on economic theory are the most comprehensive and may be used for analysis of large-scale transportation investments. Three methodologies are at the core of most REM implementations, including input-output models, computable general equilibrium models (CGE), and econometric models.There is a subtle but important difference between estimating and evaluating economic impacts. Analyses aimed at estimating economic impacts attempt to answer the question: What is the overall impact on the regional economy from the proposed transportation project? Estimating economic impact analyses employ methods that estimate changes in economic indicators of interest (e.g. wages, jobs, outputs, GDP, and GRP) by modeling the economy with or without a transportation investment. Evaluating economic impact analyses show the net benefit or value of the change in an economic indicator. For example, a transportation investment may lead to an addition of 100 jobs due to various economic impacts; however, individuals at the same wage rate filled 25 of the new jobs as they had at their previous positions. In a study aimed at estimating economic impacts, a positive impact of 100 jobs will be reported, whereas in a study aimed at evaluating the net benefit, a positive impact of only 75 jobs will be reported. Evaluation of the net benefit should be utilized for justifying transportation investments.MAP-21 Emphasis on Performance Based Planning and ProgrammingUnder Moving Ahead for Progress in the 21st Century (MAP-21), U.S. DOT will establish performance measures and state DOTs will develop performance targets in consultation with MPOs and other stakeholders. State investments must make progress toward these performance targets, and MPOs must incorporate these performance measures and targets into their Transportation Improvement Programs (TIPs) and Long Range Transportation Plans. MAP-21 identifies the creation of jobs and the support of economic growth as key goals of transportation investments. Estimating and evaluating the economic impacts of transportation investments has received increased interest by transportation agencies in recent years, for the following reasons:A decline in the availability of funding for transportation projects has led to increased competition for limited federal and state resources.An increased need for transportation agencies to justify the economic value of transportation projects in comparison with other priorities for competing financing.A growing call at the federal and state levels to fund projects based on performance-based criteria, such as the potential for investment in a project to result in economic development.Investing in transportation to promote economic development of a region.IDOT Experience Using EconWorks During the fall season of each year IDOT hosts an annual planning conference that is attended by staff from IDOT, FHWA, MPO’s, local Councils of Government, counties, municipalities, consulting firms and others in the planning field from Illinois. During the 2015 conference, a session was dedicated to introducing EconWorks to conference attendees. The presentation given during the session was organized so that it could later be used as an EconWorks training template. As part of the conference session, use of the EconWorks tool was demonstrated and approximately 8 projects that are currently in the early planning phase from various MPO regions in Illinois were tested using the “Assess My Project” portion of the tool. The list of projects used to demonstrate the tool and test its effectiveness from the perspective of the attendees, are included in Appendix A of this report. These projects along with a brief description of the reaction to the EconWorks outputs for each are as follows:I-57 at Curtis Road Interchange in Champaign, IDOT District 5(see the EconWorks Case Studies screenshot below)-There was immediate skepticism regarding the tool outputs because it stated a $0 cost for the project when in reality it is a $13 million project. The sliding scale also could not be adjusted to reflect a $13 million interchange project as there were no similar project case studies within the database. Similar projects within the case studies database were either significantly more or less expensive than this particular project.Olympian Drive Extension East in Urbana, IDOT District 5 (see the EconWorks Case Studies screenshot below)-This project had a similar reaction as the one above for the same reasons, except this project also did not list a single project as being remotely similar within the database of case studies, therefore there was nothing to compare it to.I-255 Interchange at Davis Street/Ferry Road, Dupo, IDOT District 8 (see the EconWorks Case Studies screenshot below)- There was immediate skepticism regarding the tool outputs because it stated a $0 cost for the project when in reality it is a $34 million project. The sliding scale also could not be adjusted to reflect a $34 million interchange project as there were no similar project case studies within the database. Similar projects within the case studies database were either significantly more or less expensive than this particular project.Herrin Road & Reed Station Road Extension, Carbondale, IDOT District 9 (see the EconWorks Case Studies screenshot below, the second one was ran as access road)-This project did not pull any similar projects from the case studies database. We ran the project as both a connector which resulted in a tool output cost much higher than the projects $13 million cots and as an access road which resulted in a project cost that was half of the actual project cost. US 150 (EB) War Memorial/McCluggage Bridge, Peoria, IDOT District 4 (see the EconWorks Case Studies screenshot below)-The tool outputs were not credible due to no similar case studies being generated by the tool, as well as a much lower estimated cost for bridge projects being shown between $13 million and $91 million. This projects actual estimated cost is $170 million. Stanford Avenue, Springfield, IDOT District (see the EconWorks Case Studies screenshot below)-The reaction to the outputs for this project were favorable mainly because even though there were no matching case studies in the database, the projected AADT, Wages and overall project cost were within an acceptable range for this particular project. I-90 Corridor Reconstruction, Rockford, IDOT District 2 (see the EconWorks Case Studies screenshot below)-Outputs did not match up well for this project seemingly because it is a reconstruction project and similar major highway projects in urban areas in the database were projects that added lanes or had other features that added significant capacity to the system. IL 336 Bypass, Macomb, IDOT District 4 (see the EconWorks Case Studies screenshot below)-There was skepticism regarding the outputs for this project primarily due to the database containing only one similar type of project which has much lower AADT, is less than half the length and costs less than half of the IL 336 bypass project.Attendees of the EconWorks training session included many of the project planners and sponsors. As each project was used to demonstrate use of the “Assess My Project” portion of the tool and test the validity of its outputs, the attendees’ reactions were mixed. Overall, in working with the EconWorks tool, the ease of use made it an attractive option for use by transportation planners in developing quick estimates of potential economic impacts of projects. In addition, the library of project case studies has the potential of providing background on like-type projects from within the region or from other parts of the nation. While certainly positives, these benefits and the potential use of EconWorks are significantly overshadowed by the severe limitations of the tool due to the current lack of adequate project case studies that comprise the library database used to calculate impacts.Key shortcomings of the data base include the small number of case studies that currently create the background information used to develop the tools outputs when assessing other projects, the limited geographic distribution of specific project types, and a lack of diversity in the levels of success that projects in the database have had in terms of economic impacts. Simply put, there is a need for greater database robustness to assure EconWorks users that they are getting the best possible results via access to a diverse array of comparison projects. The use of sliding scales for filters and actions were also a concern. For the most part, more precision was desired and concerns over potentially sensitive factors requiring self-assessment action elements were raised. The concern is that the scales are not quantifiable. It is hard to assess how a user can adequately gauge and set their land use policies without a) definition by what is meant b) a quantifiable number to approximate where the user should place the needle. Additionally, concerns were raised about how often the case study information would be updated so that the tool outputs would consistently reflect the best information available to date; including updated cost information (i.e. 2008 construction dollars are already out of date). Based on these observations, the Illinois study provides five recommendations:Expanded Project Case Study Library and DatabaseWhen employing the EconWorks tool, the economic impact data seemed to represent different project scales. In particular, the available information for some project categories resulted in either exaggerated or diminished impact results. This might appear in the form of excessively expensive project costs or no costs at all. Whether or not the particular input data for the project could be adjusted, these types of project estimates raise questions as to the reliability or suitability of the underlying database for current project application. The database currently contains 105 case studies that feed the outputs of the tool. Based on our experience, we recommend that the database contain a minimum of 500 case studies in order for it to be viewed as a reliable tool capable of producing trustworthy results for assessing new projects based on past projects experiences. IDOT appreciates that FHWA is providing funding to states to continue adding to the case study library database.As part of this study, IDOT has conducted 3 case studies which will be added to the EconWorks database. Specific data and information regarding these projects can be found in Appendix B of this report: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) Enhanced Geographic Distribution of Like-typed Project Case StudiesAnother limitation when using the tool related to the limited number of matches that resulted within a geographic region. Often, the use of the filter would result in no matches. Expanding the number of projects within the regions is a key next step to make the tool more usable. Within this concern is also a concern about projects included in the case studies. In Illinois, four projects were included in the original case study library, but these were all skewed toward intermodal projects (freight and passenger) and all were in Northern Illinois. While a wide variety of projects were included in the region, it was felt that IDOT district offices (including District 1 for NE Illinois) would more likely be considering requests for interchanges, bypasses and limited access roads that impact economic development than intermodal terminals. In addition, Illinois’ experience has been that projects undertaken primarily for economic development potential have varying degrees of success and might include some failures. This is particularly true in rural settings were pressures for economic development investments are not always matched by the availability of adequately skilled workforce, utilities and national market access. Still, requests for rural interchanges and limited access road improvements are among the most frequent projects promoted to IDOT for economic development. It is crucial that additional projects for rural locations are included and that a wider variety of outcomes be included in the database. Adding greater Project Outcome Diversity in Economic OutcomesAs stated above, a key observation of the current library is limited to very successful projects. From the state DOT’s point of view, many proposals are brought to their agency every year concerning projects to enhance economic development. This is important for all urban/rural/mixed categories. If the tool is going to be used on a broad array of projects, it must also be robust enough to produce legitimate results that predict a lack of potential economic impacts when appropriate. It is possible that the use of more stringent filters related to the lack of work force and other key infrastructure variables might succeed in achieving this outcome.More Precise Filter and Action Scales for Adjusting Influencing FactorsA key concern both from the state DOT and the MPO participants is the use of filter scales in both the Case Study Search and the Assess My Project components that are imprecise. Per the comments received, it was recommended at the MPO training session that the scales should allow digital inputs of appropriate data instead of a sliding scale and a brief dictionary of current planning terms that can be used to describe land uses around projects that are generally accepted by planning practitioners to be either supportive or prohibitive of development. In addition, specific concerns arose over politically sensitive inputs in the Actions component of “Assess My Project”. Specifically, it was felt that allowing users to self-assess the Land Use Policies and Business Climate without definitions, could and probably would, lead to skewed results. ................
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