Guest writer

Good for all

Roads’ economic impact great

National studies have successfully measured infrastructure projects' effects on employment and economic growth in the U.S. economy. But research on highway spending and its economic impact on the Arkansas economy are sparse.

In an effort to better understand the return Arkansans experience when their tax dollars are invested in highway projects, the Arkansas Good Roads Foundation commissioned a study, in partnership with the Clinton School of Public Service, to measure the economic impact of highway spending in Arkansas.

The results were developed from a 2014 data set, which stated that roughly $1.43 billion was spent in the state on the construction of new roadways, and the construction, maintenance and repair of local highways, roads, streets, and bridges.

The study found that this level of investment led to the creation or support of 15,538 private-sector jobs. There was a direct creation of 8,655 jobs in the highway construction and maintenance industry sector. An additional 3,834 private-sector jobs were created or supported by the indirect effects from these projects, as products of the highway construction contractors' interaction with other Arkansas business and industry (such as purchasing equipment or requiring other non-government resources).

Finally, 3,049 private-sector jobs were sustained from the induced effect of highway construction and maintenance. Induced effects are the changes that occur because of local spending that are a result of highway project investment. An example of this would be the jobs at a restaurant that fed highway construction workers, a motel that housed these on-location workers, or spending at local retailers where the highway project was located.

Additionally, for every $1 spent on highway construction, 10.7 private-sector jobs are supported in the Arkansas economy. For every $1 spent on maintenance of highways, roads, streets, and bridges, 11.85 private-sector jobs are supported in the Arkansas economy. For every direct construction job created, there are 0.8 private-sector jobs created somewhere else in the Arkansas economy. And for every direct highway maintenance job, there are 0.79 private-sector jobs created.

The study found that the $1.43 billion invested in highway construction and maintenance led to $2.47 billion in overall economic output, increasing output in 449 of the 528 business and industry categories identified and located in Arkansas. The data also showed that for every dollar spent on highway construction, $1.75 is generated in economic output. And for every $1 spent on highway maintenance, $1.71 is generated.

This means that an investment in highway construction would lead to a 75 percent return on investment, and a 71 percent return on investment for spending on maintenance and repair.

The 2014 level of investment in highway construction and maintenance would also mean that $665 million would be generated in private-labor income for Arkansas workers. Roughly half of this income would be paid to road crews and others directly employed or under contract with the Arkansas Highway and Transportation Department to create highways, with the other half paid out to employees from resulting business transactions within the state economy.

It is important to note that this project only measures the economic impact of actual construction or maintenance of Arkansas highways and quantifies the effects from purchasing materials, hiring employees, and the spending that occurs during a given construction or maintenance project. This study does not account for the long-term impacts of constructed or improved Arkansas highways, which have proven to lead to cost savings for consumers, reduction in automobile fatalities, and increases in state and local economic activity long after initial construction and maintenance is completed.

The Arkansas Good Roads Foun-dation is a nonprofit corporation which underwrites research of the local and statewide benefits resulting from adequate funding for highway maintenance and construction. The foundation also measures and promotes the impact of improved highways on business-to-business and consumer-related activity; quantifies statewide safety and private-sector job creation and retention; measures the positive impact on state revenue from increased highway-improvement activity; and assesses political viability of funding strategies.

In addition, the foundation works to promote to opinion leaders and the public the results of research findings by the organization, the state Highway and Transportation Department, and secondary national highway-related research findings. The foundation communicates and disseminates information regarding the benefits to Arkansas individuals, businesses, industries and institutions from adequate funding for safe and efficient highways, roads, streets and bridges.

The Arkansas Good Roads Foundation's partnership with the Clinton School of Public Service for this economic impact study is but one example of its activity on behalf of enhanced economic development and private-sector job creation, leading to a better Arkansas, proving good roads are good for all.

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Craig Douglass is a Little Rock-based marketing communications consultant and executive director of the Arkansas Good Roads Foundation. Nathan Watson is a 2016 graduate of the Clinton School of Public Service and an MBA candidate at the University of Arkansas at Fayetteville.

Editorial on 10/28/2016

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