#1Regional Economic Models, Inc. January 28th, 2021 1-11 REMI Study - The Economic Impact of RhodeWorks: An Accelerated Transportation Restoration Plan Presented by: Ryan Saul, Economic Associate REMI TranSight#2Presentation Objectives Overview of RhodeWorks Focus of Analysis Results [Model Demo] TranSight 4.3: Evaluating Network Improvements REMI TranSight#3About Us Regional Economic Models, Inc. (REMI) was founded in 1980 on a transformative idea: government decision-makers should test the economic effects of their policies before they're implemented. We are the nation's leader in dynamic local, state and national policy modeling. Our clients use REMI models to perform rigorous economic analysis that critically influences local, state and national policies. Our team of research economists and software developers are dedicated to continued model innovation. Our success is measured by the success of our clients. We provide unlimited expert and professional technical support to our users. REMI TranSight#4Understanding Your Needs TranSight depicts the effects of transportation improvements on employment and economic development. Our users rely on TranSight to validate their: Long-range Planning Project Prioritization Economic Impact Analysis Transportation Financing TIP and STIP Planning REMI TranSight#5Model Methodology REMI's 35-year history of rigorous academic research and software development has led to the development of the industry standard in macroeconomic research methodology: Our clients include: • AECOM Michigan Department of Transportation • • Cambridge Systematics, Inc. Illinois Department of Transportation General Equilibrium Input-Output Econometrics Economic Geography Integrated REMI economic modelling approach . • • Atlanta Regional Commission (ARC) Southern California Association of Governments (SCAG) New York State Department of Transportation United States Army Corps of Engineers Great Lakes District Houston-Galveston Area Council (H- GAC) REMI TranSight#6Dynamic Analysis 2,800 2,600 2,400 2,200 2,000 1,800 1,600 1,400 1,200 1,000 800 2012 2014 2016 2018 2020 2022 2024 2026 2028 2030 Control Forecast 2032 2034 2036 2038 2040 2042 Policy 2044 2046 2048 2050 2052 2054 2056 2058 2060 REMI TranSight#7Static vs. Dynamic Analysis Static Analysis Construction spending O&M spending Dynamic Analysis Construction spending O&M spending Travel time savings Emissions savings Safety improvements Population changes Fuel expenditures Non-fuel VOCS Network speed improvements Access to labor Access to intermediate inputs FHWA: TranSight is among the "best equipped to estimate productivity impacts"* *https://ops.fhwa.dot.gov/publications/fhwahop15034/ch5.htm REMI TranSight#8Model Structure INPUT DATA Project-Specific Data EZ ADJUST INPUT VALUES ECONOMIC MODEL Construction Operation Finance Regional Effects TranSight Economic and Demographic Results + REMI Policy Variables ↑ Transportation Cost Matrices Transportation Model By Model Type or Aggregate: VMT VHT Trips Fuel Demand Emissions Safety Time Savings REMI TranSight#9About RhodeWorks: Background As of 2014, Rhode Island ranked last nationally in overall bridge conditon.1 RhodeWorks was the accelerated transportation plan to achieve the federally mandated minimum of 90% structurally sufficient bridges by 2025. The plan sought to improve safety, make Rhode Island a more attractive business environment, and benefit consumers. 1 FHWA data: https://www.fhwa.dot.gov/bridge/deficient.cfm. As of 2014. Shows that 23% of RI's bridges are structurally deficient, the highest rate in the country (including all 50 states, DC, and Puerto Rico). REMI TranSight#10Overview of Analysis REMI was engaged by RIDOR's Office of Revenue Analysis on behalf of RIDOT to model the economic and demographic impacts of RhodeWorks Data was provided by the DOR's OMB and RIDOT RIDOT provided a current road and bridge maintenance plan; implemented in absence of RhodeWorks (constrained resources transportation plan) Compared economic and demographic impacts of Rhode Works to the constrained resources transportation plan REMI TranSight#11Financing Two general financing mechanisms: 1. The costs of RhodeWorks solely financed by tolling regime 2. The tolling regime used with increase in excise gas/diesel tax rates Two transportation infrastructure capital spending plans 1. 6/10 Highway 2. $400M in federal funding for 6/10 transit *https://ops.fhwa.dot.gov/publications/fhwahop15034/ch5.htm REMI TranSight#12Focus of Analysis The REMI control forecast was calibrated to the state's consensus economic forecast 6/10 6/10 Bridge Gas Tax Diesel Tax Scenarios Highway Transit Tolling Increase Increase Scenario One ($1) Y Y Y N N Scenario Two ($2) Y N Y N N Eight scenarios were Scenario Three (S3) Y Y Y Y N aggregated from Scenario Four ($4) Y N Y Y N project components Scenario Five ($5) Y Y Y N Y and potential outcomes Scenario Six ($6) Y N Y N Y that REMI modeled Scenario Seven (s7) Y Y Y Y Y Impacts of both Scenario Eight (S8) Y N Y Y Y construction phase and financing strategy (tolling regime) REMI TranSight#13Focus of Analysis Economic and demographic impacts of RhodeWorks over an 11 year period: 1) The construction of transportation infrastructure capital improvements 2) Construction project financing options 3) Avoided costs of bridge closings and postings to the state 4) Benefit programs to support the trucking industry included in the RhodeWorks proposal 13#14The Construction of Transportation Infrastructure Capital Improvements 6/10 Highway 6/10 Transit Bridge Pipeline Capital Improvements Pavement Capital Transit Capital Projects Gantry Construction Transportation Alternatives Capital Pipeline REMI TranSight#15Construction Project Financing Options Tolling Program Local traffic Outbound traffic Pass through traffic Inbound Traffic Gas and Diesel Taxes Gas and diesel tax Diesel tax Gas and diesel tax, but an additional tax on diesel. *https://ops.fhwa.dot.gov/publications/fhwahop15034/ch5.htm REMI TranSight#16Avoided Costs of Bridge Closings and Postings to the State Cost savings from avoiding detours and weight limit postings - vehicle operating costs and increased travel times 2018-2025: cost savings amounted to just less than $10M Vehicle operating costs only REMI TranSight#17Project Spending and Funding Liability Table 2: Project Spending & State Funded Liability Total Cost 2015-2025 Metric Capital Spending Units Millions of Current $ $1 S2 $3 $4 $5 S6 57 $8 $ 896 $ 496 $ 896 $ 496 $ 896 $ 496 $ 896 $ 496 In-State Funding Liability Millions of Current $ $160 $160 $ 194 $194 $ 194 $194 $194 $ 194 REMI TranSight#18Summary Economic and Demographic Results Table 1: Summary Results Total Impact 2015-2025 - Difference from Baseline Metric Units Total Individuals S1 $2 53 $4 $5 S6 S7 58 6,487 3,194 6,656 3,363 6,143 2,850 6,399 3,106 Employment Gross State Millions of $ 538 $ 225 $ 560 $ 247 $ 500 $ 187 $ 530 $ 217 Product Current $ Millions of Output $ 963 $ 408 $ 1,010 $ 455 $ 908 $ 353 $ 959 $ 404 Current $ Personal Millions of $ 521 $ 241 $ 510 $ 230 $ 485 $ 206 $ 498 $ 218 Income Current $ Real Disposable Millions of $ 344 $ 129 $ 263 $ 47 $ 287 $ 71 $ 275 $ 59 Personal Current $ Income Population Individuals 4,340 2,184 3,443 1,288 3,675 1,519 3,558 1,402 REMI TranSight#19Scenario Results Comparison Table 4: Comparison of Simulations - Difference from Scenario One as Reference Case Category Scenario 1 Differences Reference 1 & 3 Differences 1 & 5 Differences 1 & 7 Total Employment 6,487 169 -344 -88 Private Non-Farm 6,148 189 -295 -54 Residence Adjusted 5,610 -111 -422 -267 Population 4,340 -897 -665 -782 Labor Force 2,800 -491 -398 -445 Gross State Product $ 538 $ 22 $ (38) $ (8) Output $ 963 $ 48 $ (55) $ (4) Personal Income $ 521 $ (11) $ (35) $ (23) Disposable Personal Income $ 448 $ (11) $(31) $ (21) Real Disposable Personal $ 344 $ (81) $ (58) $ (70) Income REMI TranSight#20Conclusion Full RhodeWorks Project 6,487 new jobs $538 million in gross state product $521 million in nominal personal income $344 million in real disposable income CONEMER Alternative Funding Mechanisms All projected to have net positive impacts on RI Somewhat greater employment impacts But lower gains in real disposable income REMI TranSight#21Model Demonstration REMI TranSight#22Looking Ahead to Transportation Policy in a Post-COVID World and Beyond Tomorrow: Friday, January 29th 11:30am EST The final discussion in our REMI TranSight Presentation Series will explore the economic impacts of transportation and infrastructure investments in a post-COVID world. 22#23REMI TranSight Thank you for your interest in REMI TranSight Email Us [email protected] Call Us Visit our Website www.remi.com (413) 549-1169 23