Miley Report on Richland County Transportation Plan

7/31/2019 Miley Report on Richland County Transportation Plan

1/8

THE ECONOMIC IMPACTS of the

RICHLAND COUNTY TRANSPORTATION PLANP R E P A R E D F O R C I T I Z E N S F O R A G R E A T E R M I D L A N D S

PREPARED BY MILEY & ASSOCIATES COLUMBIA, SC OCTOBER 2012


2/8

This study is an update o our October 2010 reportThe

Economic Impacts o the Richland County Transportation

Plan. This updated report is an analysis o the economic

impacts o the latest transportation plan proposed in

Richland County or the unding o new transportation

inrastructure. The new Transportation Plan as approved

by Richland County Council in the summer o 2012 is

similar in size and scope o the 2010 Plan. As such,

this report is similar in its content and approach as our

2010 analysis.

As did the 2010 analysis, this report highlights the

substantial economic benefts to the Midlands rom the

Transportation Plan. In summary, these benefts are:

TheTransportationPlanshouldgenerateover$1.2billiondollars o total economic activity in the Midlands area.

Whentheeconomicdevelopmentimpactsarecombinedwith the construction and transit impacts, more than

16,500 new jobs created.

The implementation of the Transportation Plan willsignifcantly broaden the property tax base in Richland

County,generatingover$28milliondollarsayearinnew property taxes within the frst 10 years.

It is estimated that 42% of the collections fromthe penny will come rom those who do not live in

Richland County.

Itisestimatedthattheaveragehouseholdwillspend

lessthan$100moreayeartosupporttheplan.Thiscostwill be more than oset by signifcant improvements in

saety, signifcantly reduced commuting times and a

reduction in vehicle operating costs that are estimated

tobe$281ayear.

WithRichlandCountyimplementingalocallycontrolledand managed process to select contractors and

associated frms, the vast majority o the construction

work should be accomplished by local frms.

EXECUTIVE SUMMARY


3/8

This study is an update o our October 2010 reportThe Economic

Impacts o the Richland County Transportation Plan. This updated report

is an analysis o the economic impacts o the latest transportation plan

(Transportation Plan) proposed in Richland County or the unding

o new transportation inrastructure. The new Transportation Plan as

approved by Richland County Council in the summer o 2012 is similar

in size and scope o the 2010 Plan. As such, this report is similar in its

content and approach as our 2010 analysis.

As did the 2010 report, this report highlights three major

categories of these impacts:

Permanentnew economicdevelopmentstimulated bynewandimproved roadways.

Economic activity generated by the construction of theinrastructure and operations o the transit system.

ReducedtraveltimeandtherelatedbenetstoRichlandCountyresidents due to new and improved roads.

In addition to these quantifable benefts rom the proposed

Transportation Plan, there are many other benefts rom the

Transportation Plan that are not addressed directly in this report

Foremost among these are the improvements in vehicle and

pedestrian saety. Richland County continues to be one o themore dangerous road systems in the State. As stated in the State

Newspaper in 2010:

According to the S.C. Department o Public Saety, Richland

County ranked second statewide in the number o pedestrians

injured by vehicles in 2009, and third in the number o bicyclists

hurt. The countys ranking was not as high or deaths.

Still, in the past fve years, 846 people on oot or on bicycle were

hit by cars in Richland County. O those, 140 were badly injured.

Thirty-eight people died.1

While the benets of reducing this level of accidents would be

substantial, they are not included in the impacts outlined in this study.

Other benefts are that the road improvements will reduce costs

to resident drivers. It is estimated that roads that are in disrepair

costtheaverageRichlandCountymotorist$281ayearinadditionalvehicle operating costs.2 There will be over $656 million in newroad improvements completed once the plan is ully implemented.

These improvements will help keep motorists operating costs rom

increasing due to poor road conditions.

ThePlancallsforover$300milliontobeallocatedtoCMRTAoverthe22-year period to stabilize, improve and expand the transit system.

The Transportation Plan will allow the CMRTA to expand its current

routes and improve operations o CMRTA. These improvements will

not only beneft the riders and users o CMRTA, but it also generates

additional economic activity in the Midlands area. In addition, the

transit improvements have additional benefts by reducing the

demand or motorists within the transportation system.

And fnally, there are numerous quality o lie benefts that will

result rom the Transportation Plan. The Plan calls or more than

$80milliontobeinvestedinnewsidewalks,newwalkingandbikepaths and greenways. These quality o lie benefts are valuable to

the community as well as having a positive impact upon attracting

commercial investment with the resulting job creation in RichlandCounty. In addition, these improvements also have indirect benefts

by reducing the demand or motorists within the transportation

system.

The components o the Transportation Plan are summarized in this

report but the complete details o the Transportation Plan are available

rom the Richland County website: http://www.richlandonline.com/

TransportationPenny/index.asp. The Transportation Plan is to und

the transportation improvements with a penny sales tax on sales in

Richland County over the next 22 years. This unding method or new

roads and other transportation inrastructure has been implemented

successully across the nation. More importantly, due to limited

transportation unding resources available to communities in SouthCarolina, several other counties in South Carolina such as Newberry,

York, Charleston and Horry have successully implemented a penny

sales tax to help their communities meet the growing transportation

needs o the residents.

TheTransportationPlanwillgenerateover $1.1billion dollars inrevenuesoverthe22-yearlifeofthePlan.Ofthatamount,$656millionis earmarked fortransportation constructionimprovements;$301million is earmarked or the public transit system and approximately

$81millioninbikepaths,sidewalksandgreenways.Thepennysalestaxisestimatedtogenerateapproximately$54millionayearintheinitial years and increase annually during the 22-year period.3

It is important to note that an estimated 42% of these sales taxes

will be paid by non-residents of Richland County.4

The proposed Transportation Plan is analyzed here using two primary

economic impact methods: IMPLAN (MIG Inc., 2010) or construction

impacts rom road improvements and transit operations; and

TREDIS (TREDIS, 2010) or economic impacts o transportation

inrastructure improvements that aect travelersboth business

and personalwho use the system.

INTRODUCTION


4/8

The economic impacts rom the transportation improvements can be

separated into two major categories:

NewandExpandedEconomicDevelopment

EconomicActivityfromroadconstructionandtransitoperations

The frst category is composed o the new and expanded economic

development that will be stimulated by new and improved roads. These

economic impacts will be permanent impacts that aect the entire

county in terms o new capital investment, new jobs and new tax base.

These tax base benefts will not only beneft Richland County but will

also have positive impacts on the City o Columbia and Richland OneandRichland Twos tax base. While there areover30 separate roadand intersection improvement projects in the Transportation Plan that

will have meaningul economic and job creation impacts, there are two

projects that will have immediate and ar reaching impacts once the

roadimprovementsarecompletedTheWilliamsStreetExtensionandthe Shop Road Extension.

WILLIAMS STREET EXTENSION AND

RELATED IMPROVEMENTS

This project is one o the most potent components in the Transportation

Plan in terms o potential ongoing economic development impacts. It will

open up previously undevelopable properties in and near the downtown

area. Based on estimates rom Sasaki Associates and the Schunk Report,

itestimatedthattheWilliamsStreetextensionandrelatedimprovementswill generate direct impacts in the Columbia area o over 1.1 million

square eet o ofce and commercial development within the frst 10

years once the Williams Street extension and related improvementsare completed.5Thisdevelopmentequatestoover$117milliondollarsin capital investment. This $117million in capital investment doesnot include the capital investment that will occur as properties in the

surroundingareaarealsodeveloped.Within10yearsfromthecompletiono this component o the Transportation Plan project, it is estimated that

therewillbeover1,400newjobscreatedinthedowntownarea.Theproperty taxes generated by this capital investment are estimated to be

over$3.4millionperyear.

SHOP ROAD EXTENSION

This project is perhaps the most potent component in the Transportation

Plan in terms o potential ongoing economic impact. It will open up

previously undevelopable lands near the industrial corridor along Garners

FerryRoad,BluffRoadandI-77.Thisroadprojectisestimatedtoopenupover3,600acres oflandtomajoreconomicdevelopmentprojects.Perhaps more importantly, the areas that this road project will open up

or development include large tracts o land with more than 100 acres

that have adequate utilities and interstate access. These large tracts

are relatively scarce in Richland County and would be very attractive

to large manuacturing and distribution acilities that now by-pass the

County due to the lack o such tracts. These areas would also enhancethe potential or Richland County to increase the number and variety

o Certifed Sites in the County (See South Carolina Department o

Commerce or inormation on the Certifcation Process).6 As o 2012, the

County has one Certifed Site. The improved access to the Shop Road

area could potentially lead to more Certifed Sites in the County and

substantially enhance the Countys economic development eorts.

Based on these new sites or development, it is estimated that within

tenyearsoftheprojectscompletion,therecouldbeover3.75millionsquare eet o distribution and industrial development in this area. This

developmentwouldstimulateanestimated4,000newjobsandrepresentacapitalinvestmentofover$1.0billion.Thepropertytaxesgeneratedby

thiscapitalinvestmentwillbeover$25.1millionperyear.

As seen in Table 1, together these two projects could generate almost

$1.2billion innew capitalinvestment,morethan 5,500newjobs inRichlandCountyandgenerateover$28millioninnewpropertytaxesonan annual basis. Based on the estimated project costs, these two projects

will pay or themselves several times over within the frst ten years ater

they are completed.

And it is important to note again that while these are the two projects that

are most likely to directly stimulate economic development in Richland

County, there are 12 other road projects and 19 intersection improvements

in the Transportation Plan. These other road projects and intersection

improvements will stimulate capital investment and job creation aswell. The estimates provided herein thereore, should be considered as

minimum levels o impacts rom the entire Transportation Plan.

ECONOMIC IMPACTS

ESTIMATED

PROJECT COSTS

WilliamsStreet&RelatedImprovements $50.0Mil

$71.8Mil

$117.3Mil

$1,039.9Mil

1,445

4,063

$3.4Mil

$25.1MilShop Road Extension

CAPTIAL

INVESTMENT

NEW

JOBS

ANNUAL

PROPERTY TAXES

Total Impacts From Two Projects

TABLE 1: ECONOMIC DEVELOPMENT IMPACTS FROM WILLIAMS STREET AND SHOP ROAD EXTENSIONS

$121.8Mil $1,157.2Mil 5,508 $28.5Mil


5/8

The second major category o economic impacts are those that will be

generated directly rom the construction o the road and pathway projects

themselves, as well as the operations o the transit system. This category

iscomprisedofthedirectimpactsfromthe$737millionofconstructionand construction related activities such as building the new roads,

intersections, bike paths, trails, etc. This group o impacts also includes

thepositiveeconomicimpactsofthe$301millioninoperationsofthepublictransportationsystemforatotalofover$1.1billionofincreasedeconomic activity generated directly rom the Transportation Plan.

However, it must be noted that the positive impacts generated by the

spending outlined above will be partially oset by a partial reduction

in local consumption spending by Richland County residents due to the

penny sales tax. This is estimated to reduce spending in Richland County

byabout$280millionduringthe22-yearlifeoftheTransportationPlan.

The Plan is projected to cost the average household in the County

approximately$96ayearinadditionalsalestaxes.7 This estimated costper household includes the beneft o two recent actions by Richland

County and the City o Columbia. The City reduced the ranchise ee on

electricitythatwillsavetheaveragehousehold$19peryear.TheCountyeliminatedthe$7.50vehiclefeeonCountyResidents.Combined,thesetwo actions will reduce the annual cost o the Transportation Plan.

The net eect o the Transportation Plan is a direct economic impact o

over$874millionoverthedurationoftheplan.This$874millionwillhave multiplied impacts throughout the Midlands and will have a major

impact on the Midlands.

The impacts o these expenditures are outlined in Table 2 below. As

the construction dollars are spent and re-spent in the Midlands area,additional economic activity is created or those companies and

individuals that supply goods and services to the construction o the

transportation projects. The recipients o this income will spend this

income on other goods and services.

Each time, some o the purchases will be or goods and services within

the Midlands area and some will be or goods and services rom outside

the area (reerred to as leakages). The well-known multiplier eect

estimates the aggregate amount o local buying and selling that occurs.8

The multipliers used in this analysis estimate three components o total

change within the local area:

Directeffectsrepresenttheinitialchangeintheindustryinquestion.Indirect eects are changes in inter-industry transactions as

supplying industries respond to increased demands rom the

directly aected industries.

Induced effects reect changesin localspendingthat result fromincome changes in the directly and indirectly aected industry sectors.

This cycle o spending continues until leakages rom the region (spending

on goods and services outside the area) stop the cycle. Due to thesemultiplier eects, the initial, direct expenditures on these transportation

projects results in indirect and induced impacts o many more dollars.

As seen in Table 2 below, this direct impact o the road construction and

transit operations will have indirect and induced impacts in the Midlands

areaforatotalofalmost$1.2billionimpactontotaleconomicactivityinthe Midlands area.

The direct impacts o the construction and transit operations will create

and support thousands o jobs in the Midlands. As seen in Table 2, there

willbeover4,100jobscreatedandsupportedbythesedirectactivities.Inadditiontothesedirectemployees,therewillbeanother7,400jobs

supported by the indirect and induced eects or a total o more than11,500 jobs supported in the Midlands as a result o the penny sales

tax plan. These impacts will begin to occur immediately and continue

through the lie o the Transportation Plan.

Andnally, therewill bealmost$162million ofdirect labor incomegenerated in the Midlands area as a result o the transportation plan.

These direct impacts will then have indirect and induced impacts o

another$265millioninlaborincomeforatotalofover$426millionimpact on labor income in the Midlands.

It is important to note that these multiplied impacts could be higher than

those estimated here. The size o the multiplied impacts will depend

on how much spending is done with local contractors. In general, the

more local contractorsthe higher the multiplied impacts will be.

Richland County has approved an approach to utilize private sector

program managers to oversee the majority o road construction work. In

addition, Richland County Council is developing a procurement process

to assure the involvement o local, small and minority frms. Given these

actions, it is more likely that the vast majority o the Transportation Plan

expenditures will be to the beneft o local frms.

Whilemanyofthesejobswillbeconcentratedintheconstructionandrelated

sectors, jobs will also be created in many other sectors in the Midlands

economy. For example, jobs will be created in a dozen or more sectors

including the architectural, engineering, real estate, accounting, legal,

employment services, security and ood and drinking establishment sectors.

ECONOMIC IMPACTS (continued)

EMPLOYMENTIMPACT TYPE

Direct Eect

Indirect Eect

Induced Eect

4,170

809

6,536

$161,543,945

$41,562,342

$223,623,715

$389,509,246

$98,327,294

$666,500,931

LABOR INCOME OUTPUT

Total Eect 11,514 $426,730,002 $1,154,337,471

TABLE 2: ECONOMIC IMPACTS OF THE TRANSPORTATION PLAN CONSTRUCTION AND OPERATIONS, YEARS 1-22


6/8


7/8

ECONOMIC IMPACTS

Both IMPLAN and TREDIS calculate the economic impacts o a penny

tax on retail sales that fnances the Transportation Plan. Nonresidents

ofRichlandCountypay42percentofthesalestaxbecausetheyaccountfor42percentofretailsales.Asarule,householdspurchaseor fnal consumption and constitute the single largest component

o fnal demand (Miller, 2009). Income largely dictates consumer

consumption, an assumption that is the oundation o apportionment

o the tax burden, whether local or nonlocal. Estimates o new and

expanded development are based on estimates rom the Greater

Columbia Chamber o Commerce, Sasaki Associates, and theSchunk Report, April 2006. Dollar values or investment per square

oot, tax value, and job creation are based on these reports. The

WilliamsStreetandrelatedroadwaysprojectassumes28%of thedevelopment projected by Sasaki Associates. Millage rates are

those that exist as o October 2012 and are provided in the millage

rate sheet on the Richland County Auditors website: http://www.

richlandonline.com/departments/auditor/orms/2009Millage.pd

Investment in the Shop Road area is assumed to be 10,000 square

feetofdevelopmentperacreandassumes50%ofthedevelopmentisdistributionand50%industrial.Industrialisassumedtogenerateemployees at 600 square eet per employee and distribution assumes

2,000 square eet per employee. Capital investment is equal to theSouth Carolina statewide average per South Carolina Department o

Commerce2011data,$255,834peremployee.

CONSTRUCTION IMPACTS

Construction impacts are calculated using three activities; 1)

State and Local road construction, 2) State and Local government

expendituresgeneral,and3)StateandLocalpublictransportation.Estimates are made to determine which portion o tax is paid by

local and non-local residents (Impact DataSource, 2010). Economic

impacts are aggregated, resulting in a fnal construction impact or

the study year. Estimate o sales taxes paid per household based

onBLSdata,ConsumerExpenditureSurvey.Itisassumed20%ofconsumer expenditures are made outside Richland County.

TRANSIT

Transit operations arereclassiedas sector430,stateandlocalgovernment passenger transit. The sector is modifed by zeroing

the Proprietor Income and Other Property Type Income. Once this is

completed, labor cost is estimated by using a ratio o Intermediate

ExpenditurestoOutput.Laboris57%oftotalbudget,withotherbudgetitemsbeingthebalance,43%.

GEOGRAPHY

Richland County is the primary study area. Linked counties aected

by Richland County projects include Calhoun, Fairfeld, Kershaw,

Lexington, Newberry and Sumter.

TIME PERIOD

Transportation estimates are for 2035. They are based on 2005Travel Demand Model (TDM) trafc data. Economic estimates are

in 2012 dollars.

METHOD


8/8

MILEY & ASSOCIATES

ENDNOTES

Miley&AssociatesisoneoftheSoutheastsleadingeconomicandfnancial consulting frms. The frm specializes in economic impact

analyses, fscal impact analyses, easibility reports, impact eestudies and beneft/cost modeling. Our clients include national

and prominent local real estate developers, school districts, local

governments, regional development agencies, and other private

sector development rms. Miley & Associates partners appearregularly beore decision-makers at all levels o government

and understand the values, needs and desires o the clients they

represent. With ofces located in Columbia, South Carolina, thefrm is well positioned to provide clients with hands-on service or

projects throughout the entire Southeast region.

Miley&Associatesappreciatesthateveryresearchprojectisuniqueand deserves a custom solution. Public policy decisions are not

made overnight, and we excel at providing advice and counsel alongtheway.Werepresentourclients.Ourbusinessplanissimple:weocus on exceeding our clients expectations and building long-term

relationships.

Miley& Associates, Inc. was founded in1993 byHarry W. Miley,Jr. Ph. D. The Company is an economic and fnancial consulting

frm providing a range o analytical services to public and private

sector clients. Miley & Associates conducts scal and economicimpact analyses o proposed new developments and has extensive

experience in assisting clients with their economic development andcommunity revitalization projects.

Dr. Miley served as Chairman o the South Carolina Board o Economic

Advisors (BEA) under two Governors. The BEA is responsible or

estimating the States revenues or the Governor and the General

Assembly to use in ormulating the States annual budget. Dr. Miley

was originally appointed as Chairman by Governor Carroll Campbell

and continued to serve as Chairman or Governor David Beasley.

Dr. Miley was the Senior Executive Assistant or Economic

Development to Governor Campbell from 1987 to 1989. Dr. Mileyserved as principal advisor to Governor Carroll Campbell on the

states policies or economic development, employment and

training, work orce and adult illiteracy, technical education and

transportation issues.

Prior to joining the Governors Ofce, Dr. Miley was on the aculty o

the Moore School o Business at the University o South Carolina and

Associate Director o the Division o Research at the School.

1 http://www.thestate.com/2010/10/03/1494224/richland-tax-plan-includes-trails.html#ixzz11KMvF9U32 Future Mobility inSouth Carolina: Meeting the States Need or Sae and Efcient

Mobility, TRIP, May 2009. Adjusted by Consumer Price Index to

reect2012prices.3TransportationStudy2012RevisionRichlandCountyOn-CallServices-TaskOrder#4,RichlandCounty,June11,2012.4AnalysisofaLocalSalesTaxintheCityofMilwaukee,C.Hoback,et.al.,WorkshopinPolicyAnalysis,DomesticIssuesPublicAffairs#869,RobertM.LaFolletteSchoolofPublicAffairsUniversityofWisconsin-Madison,Spring2005.

2 Future Mobility in South Carolina: Meeting the States Need orSae and Efcient Mobility, TRIP, May 2009. Adjusted by Consumer

PriceIndextoreect2012prices.

3Transportation Study 2012 Revision Richland County On-CallServices-TaskOrder#4,RichlandCounty,June11,2012.

4AnalysisofaLocalSalesTaxintheCityofMilwaukee,C.Hoback,et.al.,WorkshopinPolicyAnalysis,DomesticIssuesPublicAffairs#869,RobertM.LaFolletteSchoolofPublicAffairsUniversityofWisconsin-Madison,Spring2005.

5 5 Sasaki Associates and Economic and Fiscal Benefts o

Innovista, Donald L. Schunk, April 2006.

6 South Carolina Department o Commerce 2012 Industrial Site

Certifcation Program, http://sccommerce.com/sites/deault/fles/

document_directory/2012_scdoc_program_manual.pd

7Based on BLS Consumer Expenditure data, Richland CountyHousehold income (see. http://quickacts.census.gov/qd/

states/45/45079.html)andoffsetstohouseholds

8Theimpactsfromconstructionexpenditurescanvarydepending

on how much o the activity is contracted locally. The more localcontractors involved in the process, the higher the economic

impacts will be in the local economy. The estimates incorporated

in this analysis are based on the standard trade coefcients o the

IMPLAN model or the Midlands area.

Miley Report on Richland County Transportation Plan

Documents

Transcript of Miley Report on Richland County Transportation Plan