Transportation Funding: How it Works and Why It Matters to - - PowerPoint PPT Presentation

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Transportation Funding: How it Works and Why It Matters to - - PowerPoint PPT Presentation

Nov 25, 2023 149 likes •1.08k views

Transportation Funding: How it Works and Why It Matters to Agriculture David R. Ellis, Ph.D. Senior Research Scientist Infrastructure Investment Analysis Program Texas A&M Transportation Institute The Texas A&M University System

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SLIDE 1

David R. Ellis, Ph.D.

Senior Research Scientist Infrastructure Investment Analysis Program Texas A&M Transportation Institute The Texas A&M University System

Transportation Funding: How it Works and Why It Matters to Agriculture

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SLIDE 2

The Bigger Picture

Transportation Funding: How it Works and Why It Matters to Agriculture

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SLIDE 3

Accepted Truths

  • Once upon a time

the U.S. had the most efficient transportation systems in the world

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SLIDE 4

Accepted Truths ?

  • Once upon a time

the U.S. had the most efficient transportation systems in the world.

  • Arizona had one of the

most efficient transportation system in the U.S.

  • Is this still true?
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SLIDE 5

So…what happened? U.S. World Ranking

  • 25th in Overall Infrastructure
  • 20th in Quality of Roads
  • 19th in Quality of Port Infrastructure
  • 30th in Air Transport Infrastructure
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SLIDE 6

Sampling of Countries Ahead of the United States

  • France
  • UAE
  • Portugal
  • Oman
  • Switzerland
  • Austria
  • Hong Kong
  • Finland
  • Germany
  • Netherlands
  • Spain
  • Japan
  • Canada
  • Denmark
  • South Korea
  • Saudi Arabia
  • Bahrain
  • Singapore
  • Iceland
  • South Africa
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SLIDE 7

So…what happened? So…what happened?

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SLIDE 8

125% 172% 238% 19%

0% 50% 100% 150% 200% 250%

Population Registered Vehicles Vehicle Miles Traveled State-Maintained Lane Miles

Annual Percent Increase

Percent Annual Increase: 1970 to 2015 Demand Supply

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SLIDE 9

Where does the money come from?

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SLIDE 10

Where does the money come from?

  • State/Local Motor Fuel Taxes
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SLIDE 11

Where does the money come from?

  • State/Local Motor Fuel Taxes
  • Reimbursement of Federal Motor Fuel Taxes
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SLIDE 12

Where does the money come from?

  • State/Local Motor Fuel Taxes
  • Reimbursement of Federal Motor Fuel Taxes
  • Vehicle Registration Fees
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SLIDE 13

Where does the money come from?

  • State/Local Motor Fuel Taxes
  • Reimbursement of Federal Motor Fuel Taxes
  • Vehicle Registration Fees
  • Debt
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SLIDE 14

Where does the money come from?

  • State/Local Motor Fuel Taxes
  • Reimbursement of Federal Motor Fuel Taxes
  • Vehicle Registration Fees
  • Debt
  • General Revenue
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SLIDE 15

Where does the money come from?

  • State/Local Motor Fuel Taxes
  • Reimbursement of Federal Motor Fuel Taxes
  • Vehicle Registration Fees
  • Debt
  • General Revenue
  • Others?
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SLIDE 16

5 10 15 20 25 30 35 40 45 50 Fuel Taxes Vehicle Registration Fees Cost of Vehicle Ownership 36th 50th 30th

How Arizona Ranks

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SLIDE 17

14.1 13.3 18.4 16.2 15.7 15.3 14.8 13.6 12.8 12.8 12.1 12.5 12.4 11.0 8.8 7.7 7.9 7.0 8.9 9.1 8.5 7.2 6.6 20.0 18.9 18.1 17.6 17.1 16.6 16.1 14.8 13.9 13.9 13.1 13.6 13.5 12.0 9.6 8.4 8.5 7.6 9.6 9.9 9.2 7.8 7.2 5 10 15 20 25 30 35 40 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13

Effective State Tax Rate Effective Federal Tax Rate

Cents Per Gallon

Purchasing Power of the Gasoline Tax

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Downside of Increased Fuel Efficiency

500 550 600 650 700 750 14 16 18 20 22 24

'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13

Gallons of Gasoline Fuel Efficiency (Miles per Gallon)

Fuel Efficiency (in MPG) Gallons of Gasoline Used

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What Do We Know?

  • Transportation funding has

not kept pace with demand

  • Mobility will get worse

–How much worse? Depends

  • n how much effort to

address the problem

  • Failure has consequences
  • The Cost of “No” is High!
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1 Hour

Labor Markets and Consumer Markets Shrink

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1 Hour

Labor Markets and Consumer Markets Shrink

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What Can We Do?

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SLIDE 23

What Can We Do?

  • Increase Funding
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SLIDE 24

What Can We Do?

  • Increase Funding
  • Be Smarter
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Benefit-Cost Analysis

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Benefits to Calculate

Vehicle Operating Cost savings Business Time & Reliability Cost Savings Personal Time & Reliability Cost Savings Safety Reduction Value Shipper Logistics Productivity Social & Environmental Value

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SLIDE 27

What Can We Do?

  • Increase Funding
  • Be Smarter
  • Be Innovative
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SLIDE 28
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SLIDE 29

What Can We Do?

  • Increase Funding
  • Be Smarter
  • Be Innovative
  • Get Started
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SLIDE 30
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SLIDE 31

How Do You Eat an Elephant?

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SLIDE 32

How Do You Eat an Elephant?

One Bite at a Time

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You think the world isn’t changing? Ask:

Has the World Changed?

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SLIDE 34

You think the world isn’t changing? Ask:

  • Blockbuster

Has the World Changed?

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SLIDE 35

You think the world isn’t changing? Ask:

  • Blockbuster
  • Kodak

Has the World Changed?

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SLIDE 36

You think the world isn’t changing? Ask:

  • Blockbuster
  • Kodak
  • Borders

Has the World Changed?

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SLIDE 37

You think the world isn’t changing? Ask:

  • Blockbuster
  • Kodak
  • Borders
  • Radio Shack

Has the World Changed?

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SLIDE 38

You think the world isn’t changing? Ask:

  • Blockbuster
  • Kodak
  • Borders
  • Radio Shack
  • RIM (Blackberry)

Has the World Changed?

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SLIDE 39

You think the world isn’t changing? Ask:

  • Blockbuster
  • Kodak
  • Borders
  • Radio Shack
  • RIM (Blackberry)
  • Polaroid

Has the World Changed?

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SLIDE 40

You think the world isn’t changing? Ask:

  • Blockbuster
  • Kodak
  • Borders
  • Radio Shack
  • RIM (Blackberry)
  • Polaroid
  • Newspapers

Has the World Changed?

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SLIDE 41

The Current Funding System

Transportation Funding: How it Works and Why It Matters to Agriculture

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SLIDE 42

Where does the money come from?

  • State/Local Motor Fuel Taxes
  • Reimbursement of Federal Motor Fuel Taxes
  • Vehicle Registration Fees
  • Debt
  • General Revenue
  • Others?
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SLIDE 43

14.1 13.3 18.4 16.2 15.7 15.3 14.8 13.6 12.8 12.8 12.1 12.5 12.4 11.0 8.8 7.7 7.9 7.0 8.9 9.1 8.5 7.2 6.6 20.0 18.9 18.1 17.6 17.1 16.6 16.1 14.8 13.9 13.9 13.1 13.6 13.5 12.0 9.6 8.4 8.5 7.6 9.6 9.9 9.2 7.8 7.2 5 10 15 20 25 30 35 40 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13

Effective State Tax Rate Effective Federal Tax Rate

Cents Per Gallon

Purchasing Power of the Gasoline Tax

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SLIDE 44

Downside of Increased Fuel Efficiency

500 550 600 650 700 750 14 16 18 20 22 24

'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12 '13

Gallons of Gasoline Fuel Efficiency (Miles per Gallon)

Fuel Efficiency (in MPG) Gallons of Gasoline Used

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SLIDE 45

5 10 15 20 25 30 35 40 45 50 Fuel Taxes Vehicle Registration Fees Cost of Vehicle Ownership 36th 50th 30th

How Arizona Ranks

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What Does it All Mean?

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What Does it All Mean?

Three Things

  • The current system of funding is not sufficient
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What Does it All Mean?

Three Things

  • The current system of funding is not sufficient
  • A new system will need to replace it – probably

a mileage based fee or some sort

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SLIDE 49

What Does it All Mean?

Three Things

  • The current system of funding is not sufficient
  • A new system will need to replace it – probably

a mileage based fee or some sort

  • Private money will be used – public-private

partnerships

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SLIDE 50

The Future

  • f Funding

Transportation Funding: How it Works and Why It Matters to Agriculture

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“The Trump Infrastructure Plan”

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“The Trump Infrastructure Plan”

The Basic Elements

  • $1.5 trillion in infrastructure investment over

the next 10 years

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SLIDE 53

“The Trump Infrastructure Plan”

The Basic Elements

  • $1.5 trillion in infrastructure investment over

the next 10 years

  • Of the $1.5 trillion, $200 billion would be

federal funds

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SLIDE 54

“The Trump Infrastructure Plan”

The Basic Elements

  • $1.5 trillion in infrastructure investment over

the next 10 years

  • Of the $1.5 trillion, $200 billion would be

federal funds

  • $1.3 trillion would come from states, cities,

counties, the private sector, and other sources

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“The Trump Infrastructure Plan”

The Basic Elements

  • $1.5 trillion in infrastructure investment over

the next 10 years

  • Of the $1.5 trillion, $200 billion would be

federal funds

  • $1.3 trillion would come from states, cities,

counties, the private sector, and other sources

  • “Infrastructure” mean roads, airports, ports,

rail, airports, flood control, water, wastewater

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“The Trump Infrastructure Plan”

The $200 Billion

  • $100 billion in competitive grants to states based on a

80 percent state/20 percent federal cost sharing basis

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SLIDE 57

“The Trump Infrastructure Plan”

The $200 Billion

  • $100 billion in competitive grants to states based on a

80 percent state/20 percent federal cost sharing basis

  • $50 billion for rural instrastructure with 80 percent of

the funds distributed on a fomula-based basis

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SLIDE 58

“The Trump Infrastructure Plan”

The $200 Billion

  • $100 billion in competitive grants to states based on a

80 percent state/20 percent federal cost sharing basis

  • $50 billion for rural instrastructure with 80 percent of

the funds distributed on a fomula-based basis

  • $20 billion added to existing loan programs
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SLIDE 59

“The Trump Infrastructure Plan”

The $200 Billion

  • $100 billion in competitive grants to states based on a

80 percent state/20 percent federal cost sharing basis

  • $50 billion for rural instrastructure with 80 percent of

the funds distributed on a fomula-based basis

  • $20 billion added to existing loan programs
  • $20 billion for “transformative” projects
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SLIDE 60

“The Trump Infrastructure Plan”

The $200 Billion

  • $100 billion in competitive grants to states based on a

80 percent state/20 percent federal cost sharing basis

  • $50 billion for rural instrastructure with 80 percent of

the funds distributed on a fomula-based basis

  • $20 billion added to existing loan programs
  • $20 billion for “transformative” projects
  • $10 billion to establish a revolving loan fund to

purchase real property

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How to Get Projects Funded

Transportation Funding: How it Works and Why It Matters to Agriculture

FUN FUNDING DING

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How to Get Projects Funded

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How to Get Projects Funded

Six Things

  • Clearly identify the problem
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How to Get Projects Funded

Six Things

  • Clearly identify the problem
  • What is the best solution?
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SLIDE 65

How to Get Projects Funded

Six Things

  • Clearly identify the problem
  • What is the best solution?
  • What will the best solution cost?
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SLIDE 66

How to Get Projects Funded

Six Things

  • Clearly identify the problem
  • What is the best solution?
  • What will the best solution cost?
  • What do we (state, county, city, private sector, the

public) get for it? (What are the benefits?)

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SLIDE 67

How to Get Projects Funded

Six Things

  • Clearly identify the problem
  • What is the best solution?
  • What will the best solution cost?
  • What do we (state, county, city, private sector, the

public) get for it? (What are the benefits?)

  • Who can you partner with (county, city, MPO, RMA,

private sector)?

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SLIDE 68

How to Get Projects Funded

Six Things

  • Clearly identify the problem
  • What is the best solution?
  • What will the best solution cost?
  • What do we (state, county, city, private sector, the

public) get for it? (What are the benefits?)

  • Who can you partner with (county, city, MPO, RMA,

private sector)?

  • Don’t come with a problem, come with a solution to a

problem

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Calculating the Impact

  • f Ag Infrastructure Projects

Transportation Funding: How it Works and Why It Matters to Agriculture

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Estimating the Impact on Transportation Improvements on Agriculture

  • What We Calculate

– Vehicle Operating Cost Savings

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Estimating the Impact on Transportation Improvements on Agriculture

  • What We Calculate

– Vehicle Operating Cost Savings – Business Time and Reliability Cost Savings

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Estimating the Impact on Transportation Improvements on Agriculture

  • What We Calculate

– Vehicle Operating Cost Savings – Business Time and Reliability Cost Savings – Personal Time and Reliability Cost Savings

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Estimating the Impact on Transportation Improvements on Agriculture

  • What We Calculate

– Vehicle Operating Cost Savings – Business Time and Reliability Cost Savings – Personal Time and Reliability Cost Savings – Safety Benefits

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SLIDE 74

Estimating the Impact on Transportation Improvements on Agriculture

  • What We Calculate

– Vehicle Operating Cost Savings – Business Time and Reliability Cost Savings – Personal Time and Reliability Cost Savings – Safety Benefits – Logistics/Freight Cost Savings

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SLIDE 75

Estimating the Impact on Transportation Improvements on Agriculture

  • What We Calculate

– Vehicle Operating Cost Savings – Business Time and Reliability Cost Savings – Personal Time and Reliability Cost Savings – Safety Benefits – Logistics/Freight Cost Savings – Environmental Benefits

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SLIDE 76

Estimating the Impact on Transportation Improvements on Agriculture

  • What We Calculate

– Vehicle Operating Cost Savings – Business Time and Reliability Cost Savings – Personal Time and Reliability Cost Savings – Safety Benefits – Logistics/Freight Cost Savings – Environmental Benefits – Business Output

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SLIDE 77

Estimating the Impact on Transportation Improvements on Agriculture

  • What We Calculate

– Vehicle Operating Cost Savings – Business Time and Reliability Cost Savings – Personal Time and Reliability Cost Savings – Safety Benefits – Logistics/Freight Cost Savings – Environmental Benefits – Business Output – Positive Economic Effect of Wage Income

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Inputs in the Modeling Process

– Cost of the Project

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Inputs in the Modeling Process

– Cost of the Project – Start Date of Construction

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Inputs in the Modeling Process

– Cost of the Project – Start Date of Construction – End Date of the Construction

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Inputs in the Modeling Process

– Cost of the Project – Start Date of Construction – End Date of the Construction – Discount Rate

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Inputs in the Modeling Process

– Cost of the Project – Start Date of Construction – End Date of the Construction – Discount Rate – Percent Trucks

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Inputs in the Modeling Process

– Cost of the Project – Start Date of Construction – End Date of the Construction – Discount Rate – Percent Trucks – Baseline Vehicle Operating Speed

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Inputs in the Modeling Process

– Cost of the Project – Start Date of Construction – End Date of the Construction – Discount Rate – Percent Trucks – Baseline Vehicle Operating Speed – Traffic Volume

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Inputs in the Modeling Process

– Cost of the Project – Start Date of Construction – End Date of the Construction – Discount Rate – Percent Trucks – Baseline Vehicle Operating Speed – Traffic Volume – Percent Trucks

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Inputs in the Modeling Process

– Cost of the Project – Start Date of Construction – End Date of the Construction – Discount Rate – Percent Trucks – Baseline Vehicle Operating Speed – Traffic Volume – Percent Trucks – Speed After Project Completion

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Inputs in the Modeling Process

– Cost of the Project – Start Date of Construction – End Date of the Construction – Discount Rate – Percent Trucks – Baseline Vehicle Operating Speed – Traffic Volume – Percent Trucks – Speed After Project Completion – Commodity Mix on the Roadway

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Inputs in the Modeling Process

– Cost of the Project – Start Date of Construction – End Date of the Construction – Discount Rate – Percent Trucks – Baseline Vehicle Operating Speed – Traffic Volume – Percent Trucks – Speed After Project Completion – Commodity Mix on the Roadway

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Arizona Project 1: SR189/Mariposa Road

Benefits and Costs Present Value (2018 $ mil) Vehicle Operating Cost Savings $3 Business Time and Reliability Cost Savings $4 Personal Time and Reliability Cost Savings $2 Safety Benefits $2 Logistics/Freight Cost Savings $2 Environmental Benefits $0 Business Output $75 Positive Economic Effect of Wage Income $30 Total Benefits $119 Capital Costs $45 Total Costs $45 Benefit/Cost Ratio 2.63 Total Agriculture Benefits (millions) $2.66 Project Prioritization Factor 0.06

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Laredo Project 3: IH 69

Arizona Project 2: US 95

Benefits and Costs Present Value (2018 $ mil) Vehicle Operating Cost Savings $1 Business Time and Reliability Cost Savings $1 Personal Time and Reliability Cost Savings $0 Safety Benefits $1 Logistics/Freight Cost Savings $0 Environmental Benefits $0 Business Output $15 Positive Economic Effect of Wage Income $6 Total Benefits $24 Capital Costs $9 Total Costs $9 Benefit/Cost Ratio 2.64 Total Agriculture Benefits (millions) $0.20 Project Prioritization Factor 0.02

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Contact Information

David R. Ellis, Ph.D. Senior Research Scientist Texas A&M Transportation Institute The Texas A&M University System College Station, Texas 77845 d-ellis@tamu.edu 979-845-6165