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Study: Transportation Investment Could Have $10B Payback

A study commissioned by the Itasca Project examined the return on investment for fully funding the regional transportation plan—which includes roads, buses and two more light rail lines by 2030.

A study commissioned by a group of Twin Cities business leaders estimates that the region could more than double the return on its investment by fully funding the Metropolitan Council’s transportation plan—which includes road and bus upgrades and the addition of two more light rail lines by 2030.

“The Regional Transit Project Return on Investment Assessment” was commissioned by the Itasca Project—a group of more than 50 people that is made up mainly of private sector CEOs, with a small number of public and nonprofit leaders.

Cambridge Systematics, the Massachusetts-based firm that did the analysis, estimates that implementing the Met Council’s plan would generate between $6.6 billion and $10.1 billion in direct benefits between 2030 and 2045 at a cost of $4.4 billion.

If the region accelerated the transportation build-out to a 2023 completion date, it would see between $10.8 billion and $16.5 billion in benefits between 2023 and 2045 at a cost of $5.3 billion.

“Our region needs an aligned, integrated and comprehensive transportation system to drive economic competitiveness and quality of life,” a Minneapolis Regional Chamber Commerce release quoted Jay Cowles, co-chair of the Itasca Project Transportation Task Force and president of Unity Avenue Associates. “This report shows that investing in transit will provide strong returns for our community and our ability to grow jobs.”

Click on the PDF to the right to read the executive summary of the report.

Transit discussions have largely been reduced to a debate over roads versus rail. Over the past year, business groups, including the Minneapolis chamber and TwinWest, have been encouraging legislators and voters to support the Southwest Light Rail Transit line. More recently, many Golden Valley residents urged their City Council to oppose the Bottineau Transitway.

The Met Council’s 2030 Transportation Policy Plan, which the analysis was based on, does recommend two more light rail lines by 2030, in addition to the Central Corridor project already under construction.

But the plan covers all methods of transportation—highways, public transit, airports, freight, bikes and pedestrians. It calls for upgrading highways with cost-effective improvements that allow them to handle more traffic, growing bus ridership and expanding the network of bus and rail routes—among other recommendations.

Click here to read the full Transportation Policy Plan.

The Itasca report tallied the costs and benefits in six areas:

  • Travel times and reliability
  • Vehicle operating costs
  • Shippers and logistics costs
  • Emissions
  • Safety costs
  • Road pavement conditions

Savings in travel time accounted for the biggest projected benefits, with $4.6 billion to $11.4 billion in direct benefits. Vehicle operating costs followed, with $1.5 billion to $4.7 billion in savings.

Cambridge expects the forecast to be conservative because the benefits were only calculated for the relatively short period of 15 year and because of the assumptions in the model.

“Businesses support transportation options that will position our region’s economy for growth,” the release quoted Minneapolis Regional Chamber President Todd Klingel.  “Our members are telling us that improved transit is critical to attracting employees.  This report provides a strong quantitative analysis that investment in transit pays off.”

That’s still a case they’ll have to make to the state Legislature, though. Transportation promises to feature heavily in the 2013 session. Just last week, a task force appointed by Gov. Mark Dayton, who’s also a member of the Itasca Project, recommended higher gas taxes and tab fees in response to a projected $50 billion shortfall in transportation funding.

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Where would the region see benefits?

  • Travel time savings: $4.6 billion to $11.4 billion
  • Vehicle operating cost savings: $1.5 billion to $4.7 billion
  • Shipper and logistics cost savings: $185 million to $270 million
  • Reduction in emissions: $185 to $395 million
  • Safety benefits: $53 million to $88 million
  • Pavement maintenance savings: $26 million to $54 million

 

Projected Direct Impacts

Compared to base scenario Investment cost Total Direct Impacts Internal Rate of Return Scenario Low High 2030 regional plan $4.4 billion $6.6 billion $10.1 billion 7.8-14.8 % Accelerated regional plan $5.3 billion $10.8 billion $16.5 billion 11.2-18.0 % Plan with more growth near stations $4.4 billion $9.1 billion $13.9 billion 13.0-20.9 %

Note: The "2030 regional plan" is based on the Metropolitan Council's plan. The "accelerated regional plan" is the same as the 2030 plan but accelerates completion to 2023. "Plan with more growth near stations" assumes the same amount of regionwide growth but reallocates 25 percent of projected development and community growth in communities close to station areas.

Elaine Wynne December 04, 2012 at 06:12 PM
I really support light rail. Just think. If it ran from Maple Grove, along l69 (or possibly Douglas Drive) and down Hgy. 55, it could have a stop at the GV City Center and a stop at Penn and Hwy. 55 and run to the hub, making two stops, accessible to North Mpls. A light rail on 55 would potentially lighten the traffic on 55 and provide the environmental pluses. Maybe there could be spurs from Brooklyn Center and Robbinsdale, connecting with Hwy. 55 (that could mean another stop at 55 and 100.) The current plans are seriously cobbled up by which political agenda is in place. At the Envision series in GV there was overwhelming support for light rail. Let's get a fair useable route. I'd like to see electric buses connect with the light rail stops. I like Mayor Harris' pro-active leadership. We needed this at an earlier time in the process -- pro-active and assertive to keep GV in the process to know what was being planned.
Kasia December 04, 2012 at 06:50 PM
The equation used to calculate the cost/benefit of proposed routes for the Federal Transit Administration clearly does not consider the effects to park land. I think if the feds realized Minnesota would use that calculation to plow through ALL of our main parks, they might have modified the equation. Let,s use common sense, pay a little more to build a route that will actually serve the community (like the routes suggested in Elaine's comment), not just the "cheapest" routes which go through the Grand Rounds National Scenic Byways. saveminneapolisparks.wordpress.com

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