Highway System Key to Growing Economy

Posted June 12, 2008 at 1:47pm

Few things are as vital to economic development as our nation’s transportation infrastructure.

After all, businesses must have an avenue to efficiently receive raw materials and ship their products, while consumers inherently seek out goods to which they have easy access.

Yet many regions throughout the United States continue to suffer from a transportation infrastructure that lacks capacity and provides inadequate opportunities for growth.

With this in mind, a new highway bill could not be more important — particularly at a time when our nation’s economy is experiencing a well-documented slow-down. For those of us from Appalachia, the prospect of new investment in our nation’s highway systems is a welcome one.

The findings of a recently released Appalachian Regional Commission study highlight not only the obvious need, but also the economic benefits and financial feasibility of these infrastructure upgrades. ARC researchers, for example, project that the region stands to see tens of billions of dollars in total economic benefits from a completed highway system.

Consider my home state of West Virginia. Our state is mountainous and the terrain is difficult. As a result, the transportation challenges for businesses and residents are many — though the potential impact of transportation upgrades are exponentially large.

ARC evidence suggests that the completion of highway systems in certain parts of the state have led to increased economic activity, and the areas surrounding new highways are showing signs of “new commercial investment, new housing starts, and positive employment trends.”

Yet the largest obstacle to more substantive economic growth is that many of these highways are not yet complete. Without the completed highway, local businesses are forced to traverse slow and dangerous highways or travel longer distances to circumvent difficult terrain.

This is certainly the case in two West Virginia counties just west of the capital in Charleston. U.S. Route 35 runs directly through these counties and is a central travel route for trucking and other transportation needs, but it is historically dangerous and notorious for accidents and travel delays.

For years, I’ve worked with local and state leaders to advance upgrades that promote safety and travel efficiency, but 13 miles of highway are still incomplete and estimates suggest it will take another $325 million of investment to finally complete this high- priority project.

Other parts of West Virginia face similar challenges. In one case, the lack of a completed highway system in the north-central section of the state adds as many as 300 miles to transportation routes for local businesses looking to export their products overseas. In total, our state faces $19 billion in incomplete highway and transportation needs.

The increased travel cost associated with many of these incomplete projects directly impacts pricing and diminishes the competitive advantage of local businesses. As the price of energy continues to rise, these challenges will become even more apparent.

Of course, the economic benefits of a new highway bill are in no way restricted to the West Virginia economy, but naturally extend nationwide. New York’s Corridor T provides another obvious example. Without substantial investment, the ARC suggests that the region would have lost 25 percent to 40 percent of its manufacturing base and hampered potential growth.

Similar examples can be found throughout Appalachia and the nation.

In fact, approximately 225 of 410 Appalachian counties would see increased access to buyer and supplier markets with a completed highway system, thus laying the groundwork for increased economic expansion.

Furthermore, ARC estimates suggest that a completed highway system in Appalachia stands to create $10.1 billion in additional business sales, $4.9 billion in added economic value, nearly 80,500 new jobs and $3.19 billion in higher wages.

With such obvious economic benefits to increased investment, the next question is obviously one of cost — though research indicates the benefits of investment far outweigh the upfront costs, the price tag is not necessarily as ominous as one might predict.

Taking future operations and maintenance costs into account, estimates suggest the total cost for completing the entire Appalachian Development Highway System is approximately $12.2 billion.

In turn, the total economic benefits associated with such a project are estimated to be $31 billion. When adjusted, this means that the total economic benefit of completing the system is nearly 3.1 times the estimated cost.

Such a ratio strikes me as a rather extensive return on our investment.

Moreover, we do ourselves a disservice by not completing these highway systems. We’ve already taken the first step to create such a comprehensive web of highways. With past legislation we’ve provided the resources to upgrade and modernize segments of those highways, yet such upgrades will only meet their full economic potential when they are completed.

Essentially, to not complete these projects is to squander past investment.

As we start work on the next highway bill later this summer, we must remember the ripple effect a modern transportation infrastructure can have on our nation’s economy.

With gasoline prices above $4 per gallon, efficient transportation corridors have never been more important — both to businesses and to consumers. We have an obligation to be forward-thinking when it comes to developing our infrastructure needs, and a new highway bill presents us with an opportunity to do just that.

Rep. Shelley Moore Capito (R-W.Va.) is a member of the Transportation and Infrastructure Subcommittee on Highways and Transit.