Encouraging Transportation Investment

Saginaw County Chamber of CommercePercolator BreakfastMay 2, 2013Horizons Conference Center

Rich Studley, President & CEOMichigan Chamber of Commerce

By:

Michigan Chamber2013-14 Legislative Priorities:

Transportation

GOAL: Encourage Transportation Investment

Chamber Members Advocate:

• Increasing state & local investment in roads and public transportation by at least $1.6 billion per year by revising and modernizing the method of funding in a way that ensures costs are borne primarily by users of the system.

Transportation Is The Backbone of Michigan’s Economy

35% of US/Canada trade flows through Michigan

$520 billion 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

Operation of bus transit systems contribute an estimated $740 million to the economy each year

Passenger rail is expected to generate between $1.0-1.5 billion in net economic benefit annually

Aviation contributes more than $20 billion/year

80% of Michigan tourism isauto-based - $17.7 billion in total visitor spending in 2011

Transportation Is The Backbone of Michigan’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 bonding and process improvements

– $4M/year using electronic signatures for construction documents

– $22M in 2012 & 2013 by partnering with businesses & local governments & improving maintenance practices

– $4M/year in energy savings

$160

$180

$305

$326

$362

$444

$410

$518

$521

$610

$658

$624

$572

$667

$551

$442

$471

64%

67%

69%

73%71%

75% 75%

78%

82%

86%

89%

92% 92% 91%91%

89%

87%

55%

60%

65%

70%

75%

80%

85%

90%

95%

100%

$0

$100

$200

$300

$400

$500

$600

$700

$800

$900

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Perc

ent

Pave

men

t in

Goo

d &

Fair

Cond

ition

Inve

stm

ent

Leve

l in

Mill

ions

Investment Condition (percent good and fair)

Trunkline Pavement Condition has Peaked

Transportation Funding Roads and Bridges

Federal funds: $1 billion Includes $250 m to local agencies

State motor fuel taxes: $946 million State registration fees: $876 million

FEDERAL FUNDS $1B

STATE REGISTRATION

FEES $876M

STATE MOTOR FUEL TAX $946M

Conditions are Getting Worse

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/year investment will generate:– Over $10 billion in real personal income– More than $24 billion in Gross State Product

• PLUS, better roads & transit, greater efficiency, improved safety

12

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 eager to do the work– MDOT’s program and lettings are 1/3 less in 2013 than

what they were 4-5 years ago ($650M vs. $930M)

• Making investments to improve our state’s roads and bridges is sound economic policy.

• The conditions of Michigan’s roads and bridges continue to deteriorate.

• There is not enough money being generated to support our infrastructure system.

• The average Michigan citizen pays $357 annually in unnecessary repairs to their vehicles due to poor roads.

• If we fix the roads, 1,000 lives over the next 10 years could be saved.

• Investing in our roads now benefits everyone in the state.

Leading businesses. Moving Michigan forward.

www.michamber.com

Any Questions?