Truck traffic is hugely important to Michigan’s economy. The state trunkline system is how we deliver about two-thirds of the goods we sell to bring money into the state.NOTE: In recent presentations, it was stated that over $1 trillion in freight is moved each year…that’s a 1993 number. The updated number is from 2009 and is what was used in the SLRP update, Michigan Freight Profile White Paper. Sources:35% of US/Canada trade flows through Michigan – Hugh McNichol, Trans-Border Freight Database, maintained by the Bureau of Transportation Statistics in the USDOT$520B in freight is moved each year on Michigan’s highways, rail and water ports Trucking accounts for 67% of all freight tonnage moved in Michigan – Larry Karnes/Jesse Gwilliams, Michigan Freight Profile White Paper: 2035 MI Transportation Plan, SLRP
Increasing train speeds along the entire Chicago-Detroit-Pontiac corridor to 110 mph will reduce the Chicago-Detroit travel time by one hour and 52 minutes. This investment will increase ridership by an estimated 15.8% and generate between $1.0 and $1.5B in net economic benefit to the State of Michigan. For passenger rail: Michigan is estimated to receive $1.0 – 1.5B in net economic benefit. This economic benefit can be directly translated into job creation, household income, and property value increases. Generally, this would be realized via: $680M in increased urban development, 6,970 new jobs, $138M in new household income, and $628M in increased property value. Sources:Operation of bus transit systems contribute an estimated $738.5M to the economy each year -- Sharon Edgar (using an economic model that generates the economic benefits of total investment in transit operations)Passenger rail is expected to generate between $1.0-1.5B in net economic benefit annually – Sara Moore, Chicago-Detroit HSR Corridor Business Plan Aviation contributes more than $20B/year – TF2 Report, Pauline Misjack80% of Michigan tourism is auto-based -- 2010 Michigan Visitor Profile, produced by MEDC
How has MDOT Responded to the Decline in Transportation Revenues, Federal Uncertainty/Stagnation of Funding? MDOT is taking significant action to maximizing its effectiveness with existing revenue sources. Efficiencies and InnovationsMDOT has been undertaking numerous innovative efforts to produce cost savings in order to operate more efficiently and use every available dollar in its budget for infrastructure. The savings and efficiencies listed reflect the Department’s dedication to improving the state’s transportation conditions in an era of declining revenues.
You’ve seen this graph before also. It shows just how true it is that if we don’t invest now, we will need to invest more later. As revenue and investment fall, so does pavement condition.Although the state trunkline system is still in good condition today, it requires constant, steady reinvestment to prevent a steep, expensive decline.(Includes ARRA in 2009 and 2010.)Source: Statewide Planning
Just to refresh people’s memories – these are the primary sources of road funding – state fuel taxes, state registration fees and federal funds.Funding flows through the department, but a large percentage goes to contractors.State taxes on fuel and vehicles are restricted to road construction and public transportation by Michigan’s Constitution. General Fund revenues are not used for transportation except for 4.65% of vehicle-related sales tax, which is used for public transit…$98 million.The $12.1 million for aero is state funding only. NOTE: Data is for FY 2012 (Oct 2011-Sept 2012).
Of course, there are costs we all must pay as a result of an inadequate road system. The 2012 Trip Report details the following costs due to Michigan’s bad roads:$11.6 billion annually is spent in lost time, wasted fuel, crashes, etc. This equates to a cost of $3,014 annually per driver. In the Detroit metro area, drivers, on average, waste 33 hours each year being delayed by congestion. (Source: 2010 Texas Transportation Institute Urban Mobility Report)Udpated 2011 safety statistics from Mark Bott (MSP and UMTRI)
These numbers are based on state trunkline only; however, the local system benefits too.The numbers reflect the statewide impacts of investing an additional $1.2 billion in transportation. Source: Susan Gorski’s REMI model
Review Michigan vs Ohio --Similar Population --Similar # of Reg Vehicles --Greater investment per year and “funding per population”MDOT conducted a peer review of the neighboring states of IL, IN, MN, OH & WI. MDOT assessed each state’s investment in state transportation funding and how funding is allocated. MDOT’s findings reveal that Michigan’s investment in transportation infrastructure funding through fuel taxes and registration fees based on population and the number miles traveled on our roads (Vehicle Miles Traveled – VMT), is at the bottom when compared with our peer states. Michigan ranks 3rd in population and registered vehicles, BUTMichigan invests less per person than the other five states. Michigan is last in per capita population investment.
Saginaw county cof c 5 2-13
Encouraging Transportation InvestmentSaginaw County Chamber of CommercePercolator BreakfastMay 2, 2013Horizons Conference CenterRich Studley, President & CEOMichigan Chamber of CommerceBy:
Michigan Chamber2013-14 Legislative Priorities:TransportationGOAL: Encourage Transportation InvestmentChamber Members Advocate:• Increasing state & local investment in roads andpublic transportation by at least $1.6 billion per yearby revising and modernizing the method of fundingin a way that ensures costs are borne primarily byusers of the system.
Transportation Is The Backbone ofMichigan’s Economy 35% of US/Canada trade flowsthrough Michigan $520 billion in freight is movedeach year on Michigan’shighways, rail and water ports Trucking accounts for 67% of allfreight tonnage moved inMichigan
Operation of bus transit systemscontribute an estimated $740 million tothe economy each year Passenger rail is expected to generatebetween $1.0-1.5 billion in net economicbenefit annually Aviation contributes more than $20billion/year 80% of Michigan tourism isauto-based - $17.7 billion in total visitorspending in 2011Transportation Is The Backbone ofMichigan’s Economy
Innovation and Efficiency• MDOT has saved an average of$63M/year since 2009 on efficiencies &innovations. Examples include:– $48M: staff reductions & closed facilities– $71M in one-time savings by bondingand process improvements– $4M/year using electronic signatures forconstruction documents– $22M in 2012 & 2013 by partnering withbusinesses & local governments &improving maintenance practices– $4M/year in energy savings
The Cost of Doing Nothing• Costs of an inadequate system– $11.6 billion annually – lost time, wasted fuel, crashes, etc.• $3,014 annually per driver– $370 per driver per year for auto repairs due to poor roads• Safety impacts of an inadequate system– Total crashes in 2011: 284,049– Total cost of crashes : $8.25 billion– Total fatalities: 889– Total injuries: 71,796
Benefits of Acting Now• The economic impacts in the first two years:– 12,000 jobs each year– $1.598 B in personal income– $2.92 B in Gross State Product• In the next 10 years, this $1.2 billion/yearinvestment will generate:– Over $10 billion in real personal income– More than $24 billion in Gross State Product• PLUS, better roads & transit, greaterefficiency, improved safety
Impact Could Be Felt in 2013• If action is swift, work can begin this summer– If not, real progress will be delayed to next summer• Transportation agencies and contractors are eagerto do the work– MDOT’s program and lettings are 1/3 less in 2013 thanwhat they were 4-5 years ago ($650M vs. $930M)
• Making investments to improve our state’s roads andbridges is sound economic policy.• The conditions of Michigan’s roads and bridges continueto deteriorate.• There is not enough money being generated to support ourinfrastructure system.
• The average Michigan citizen pays $357 annually inunnecessary repairs to their vehicles due to poor roads.• If we fix the roads, 1,000 lives over the next 10 yearscould be saved.• Investing in our roads now benefits everyone in the state.
Leading businesses. Moving Michigan forward.www.michamber.comAny Questions?