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Transit investment increases U.S. growth potential, study shows

Posted on May 16, 2014

Based on a new study, public transportation investment powers significant productivity gains.

The study, “Economic Impact of Public Transportation Investment,” which measured investment in public transit for the first time, according to the American Public Transportation Association (APTA), demonstrates that this investment will lead to 50,700 jobs per $1 billion invested, with 28,900 jobs per $1 billion attributed to the productivity gains enjoyed by households and businesses.

This methodology goes beyond the traditional measurement of public transit operations and capital investments and calculates the economic impacts of creating more efficient local transportation systems. Overall, investment in public transportation offers an economic return of $4 for every $1 invested.

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The study was conducted for APTA by the Economic Development Research Group Inc. The report was discussed at an event on Capitol Hill on Thursday in conjunction with APTA, the National League of Cities, the U.S. Travel Association and the Environment and Energy Study Institute. The event was part of Infrastructure Week 2014.

"In Salt Lake City, rail transit has catalyzed vibrant development,” said Salt Lake City Mayor Ralph Becker, who serves as First Vice President of the National League of Cities. “It has been a key to achieving mobility and prosperity goals in our city."

“The data are clear: one of the strongest tools to create a vital and productive national economy and build strong communities is investment in public transportation,” said APTA President and CEO Michael Melaniphy. “This study breaks new ground in calculating the significant productivity gains of public transportation investment.”

“A robust and user-friendly public transportation system is crucial to making it easy and inexpensive to get around the metro D.C. area, both for visitors to the city but also for those of us who call the District our home,” said Elliott L. Ferguson, president and CEO of Destination DC. “We are committed to supporting the expansion of public transportation in and around the city and therefore continuing to create jobs and strengthen our local economy.”

Public transportation investment provides increased productivity in two areas, according to the study. First, the savings achieved to households, from reduced congestion and less reliance on automobile use. This changes purchasing power, by at least $18.4 billion per year. Second, savings to businesses, by improving employers’ access to the labor market with more efficient commutes for its current and potential employees, along with reducing congestion costs and logistics, results in contributing an additional $10.1 billion to the U.S. economy.

In addition, this enhanced productivity and access results in $3.3 billion per year in increased tax revenue for the federal government and $1.1 billion for state and local governments, the study shows. An additional $6 billion in tax revenue, annually, comes from the traditional impact of spending, with $2.2 billion going to state and local governments and $3.8 billion going to the federal government. Total tax receipts are estimated at $10.4 billion per year.

The organizations highlighted that the current federal surface transportation authorization expires September 30, 2014. The Highway Trust Fund, which provides the federal share for both highways and public transportation, will begin running short of liquidity in August.

To that end, in mid-March APTA released to Congress its recommendations for funding public transportation, which calls for a $100.4 billion investment in the federal transit program over a six-year period, grow the $10.7 billion annual program to $22.2 billion in 2020 and establish a dedicated Trust Fund to ensure the long-term sustainability of growing the federal public transit and highway program.

“Based on this new ground-breaking research, our investment plan will generate 2.4 million jobs,” said Melaniphy. “Because of this tremendous return on investment to our local communities, we are committed to working with Congress and the Administration to invest in America and to help our communities grow.”

The coalition also offered real-world examples of the economic impact of public transportation investment in Salt Lake City, Utah; Washington, D.C. and various other communities around the country.

To read the full report, go to www.apta.com.




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