Investment in region’s roads would pay economic benefits
Is Washoe County a community that has more memories or more dreams? Do we look to the future and fulfill those dreams by building and investing in the present, or is each day is just another 24 hours farther away from “remember when …”?
This flattened world, no matter what future we dream, is built on access and mobility. Tourism, high-tech, warehousing, and daily commerce is dependent upon the ability to move. Call it business kinetics: the faster and more efficient the better.
There is a growing trend in the country, and it affects this business kinetics. This trend is the country’s insufficient and deteriorating transportation network. It is choking many cities, hurting our economy and reducing quality of life.
Rush-hour delays rob us of time with our families, and commute times often dictate where we live and work. The impact our inadequate transportation network has on our economy is alarming, especially if we measure in the cost of fuel.
The Texas Transportation Institute annually calculates costs of traffic delay in the nation’s largest cities, and its 2005 report pegged the costs at $65 billion a year. Numerous polls show growing frustration on the part of citizens and businesses with congestion and its deleterious impacts on personal lives and commerce.
Moreover, businesses and their customers bear enormous costs associated with traffic-related logistics problems, delivery delays, poor transportation reliability, safety issues and fewer potential employees within commuting distance
Has this transportation trend become part of the Washoe County’s business landscape? Is it part of our community vision? Though we are not quite at that tipping point, the mobility and access pendulum is swinging toward inertia.
The Regional Transportation Commission of Washoe County has calculated our road miles with traffic counts and growth trends. Status quo means the current average per-person traffic delay would soar from today’s 2.1 minutes to more than 30 minutes within the next 10 years. Every minute of delay can cost a working mom or dad more than $14 in lost wages a little more for businesses which rely on the road system, according to a Nevada Department of Transportation estimate.
Congestion relief through provision of additional capacity is quite feasible, given current budgets.
Adjusting road user fees through small increments in fuel taxes (a revenue source that has seen little increase in the past 15 years). driver registration fees or automobile sales tax revenue are not business-kinetic killers.
Nearly every community in America is discussing the investments needed for continued access and mobility. It is stimulated with the knowledge that the federal government that helped to build up many local road and transit systems may not be as big a contributor, if it can contribute at all.
The benefits of an investment in additional capacity would be substantial. In addition to reduced travel time, other benefits include smoother traffic flow, reduced accidents, improved air quality through lower emissions, lower fuel use and operating costs, more reliable travel, lower logistical costs for manufacturing and delivery, more choices of jobs for workers and businesses while shoppers have a greater range of markets and products.
And there is the kinetic energy of jobs the mass and force of business. New road infrastructure and continued maintenance of our existing network keeps and creates jobs. Every $1 billion invested in transportation infrastructure results in an estimated 40,000 jobs created, according to the American Society of Civil Engineers.
The economic engine that transportation improvements bring to our business landscape creates a multiplier effect that depending on the economist can range from $1.57 to as much as $4 per dollar of investment.
Transportation funding is tied to fuel taxes, some sales tax and for new construction, developer impact fees. Unlike the sales tax, gas tax is not based on a percentage. The combination of state, local and federal gas taxes is currently 52 cents. It has not increased with the run-up in gasoline prices. And because
Americans have been driving less the number of miles traveled has dropped more than 50 billion over the past eight months funding for the various trusts and budgets has fallen.
Inflation also plays a role in the cost of new road construction and maintenance. Since the gasoline tax was last increased in Nevada in 1992, the state has lost one-third of its buying power for materials, fuel, labor and benefits.
The mechanism of investment in our local transportation network is political. Next month, RTC-5 on our local ballots will ask us if we wish to invest in access and mobility by adjusting gas and diesel tax rates (indexing) to construction inflation. This has direct connection to the cost of adding road capacity and building new roads.
Based upon the historic rates of construction inflation, the price of a gallon of gas could increase 2 cents and diesel 2.4 cents per gallon beginning in 2010. For the family driver in Reno-Sparks this would cost about 3.6 cents a day or $1.10 per month. Annual incremental adjustments would continue if inflation continues, if not, no adjustment. This would yield $250 billion over the next 32 years.
So what kind of community are we going to be: one that dares to dream and invest to make those dreams happen? Or one which falls back on old memories when it only used to take 20 minutes to get anywhere and our business kinetic was not at a standstill?
Arjun Dhingra is a banker in Reno and a board member for the Nevada Highway Users Coalition.
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