Economic Impacts

Economic Impacts

During the environmental impact study phase, an economic impact study was conducted for the Pennsylvania Turnpike/I-95 Interchange Project. The purpose of the study was to examine the potential impacts of the proposed interchange on the economies of Bucks County and the Greater Philadelphia region, including five PA and four NJ counties. In addition, the study provides important information necessary for local, state, and national officials to make decisions on the viability of the proposed interchange. The Pennsylvania Turnpike Commission released the study's findings at a press conference at the Bucks County Transportation Management Association.

The economic impact study was based on a year 2000 analysis of potential changes in employment, personal income, and business sales over the following time periods. Although time has elapsed since that study, the project being constructed is identical to that being planned at the time and the conservative economic trends and impact areas still apply. In fact, with most of the impacts being construction cost and income driven, an update of this study would surely produce even higher values respectively.

  • 2000 thru 2015 - the proposed construction period (includes preliminary engineering)
  • 2010 - the anticipated completion date for the interchange and toll plaza
  • 2025 - the project's design year for handling future traffic

The potential changes in employment, personal income, and business sales would stem from the typical economic impacts of a highway interchange:

  • Construction Spending - new construction dollars from federal and state sources
  • Travel Cost Savings - savings from reduced travel distances, travel times, and accidents
  • Market Attractiveness - new potential for Bucks County to be a premier office location and for the Greater Philadelphia region to capture additional tourism dollars
Impact Graph 02

Regional Employment Changes, 2000-2025

Impact Graph 02

Bucks County Employment Change, 2000-2025

The proposed interchange would also positively impact the region's quality of life which includes:

  • Personal travel time
  • Tax revenues
  • Residential property values
  • Health care and environmental costs

The Pennsylvania Economy League (PEL), an independent research organization, was hired by the Pennsylvania Turnpike Commission to conduct the economic impact study. PEL's efforts were supported by the Economic Development Research Group (EDRG), a nationally recognized expert in economic impact analyses of transportation projects. PEL and EDRG met regularly with the Community Economic Impact Review Group (CEIRG) --an advisory committee of political, business, and civic leaders--that provided oversight and local perspective for the study.

 

Related Links

You also may download the full report (60 pages) of the economic impact study for complete analyses and results, or its executive summary (20 pages) for study highlights.

Construction Spending

In 2000, the Pennsylvania Turnpike Commission estimated that the PA Turnpike/I-95 Interchange Project would cost $553 million and require approximately 15 years to construct. Preliminary and final engineering was scheduled to occur between 2000 and 2004. Based on these assumptions, significant economic benefits from construction spending would be realized in 2004, the proposed start date for construction, and would end upon project completion in 2015. Construction spending impacts would occur only if the PA Turnpike/I-95 Interchange Project was approved.

Since 90% of the project's costs would be federally-funded, the construction spending impacts would come from new dollars entering the region. The construction spending would lead to additional employment through two primary means:

  • Design and project engineering: Hiring engineers and planners to design the highway facilities (roads, bridges, lighting, signage)
  • Construction: Hiring construction contractors to build the highway facilities, as well as purchasing construction materials (concrete, steel, equipment)

Potential PA Turnpike/I-95 Interchange Construction Spending - graph

Potential PA Turnpike/I-95 Interchange Construction Spending

Total Employment Impact Due to Construction - graph

Total Employment Impact Due to Construction

Ultimately, it was determined at the time, that construction spending would increase employment, business sales, and personal income both regionally and locally in the following ways:

  • 500 regional jobs per year (300 in Bucks County)
  • $630,000,000 in business sales ($415,000,000 in Bucks County)
  • $340,000,000 in personal income ($150,000,000 in Bucks County)

 

Related Links

You also may download the full report (60 pages) of the economic impact study for complete analyses and results, or its executive summary (20 pages) for study highlights.

Travel Cost Savings

Since the PA Turnpike and I-95 are not directly connected, the interstate highway network is incomplete in Bucks County and the Greater Philadelphia region. If the PA Turnpike/I-95 Interchange Project is constructed, it would create a more efficient highway network by:

  • Reducing travel distances
  • Reducing travel times
  • Reducing accident rates, as a result of reducing travel time
2025 System-Wide Mileage and Travel Time Changes
 
VEHICLE MILES TRAVELED (VMT)
VEHICLE HOURS TRAVELED (VHT)
No-Build
122,436,254
4,273,722
Build
122,269,651
4,263,654
Savings
166,603
10,068

In 2000, these reductions, or travel cost savings, translated into more money in commuters' pockets and more savings for businesses depending on quick truck deliveries for efficient operations. As a result, the potential economic benefits were:

  • $5,900,000 in business savings in 2010, rising to $38,700,000 in 2025
  • $1,400,000 in household out-of-pocket savings in 2010, rising to $11,600,000 in 2025

These travel cost savings also meant increased productivity for regional firms, allowing them to expand their profitability and employment base. As a result, the economic benefits were:

  • 1,200 regional jobs by 2025 (178 in Bucks County)
  • $125,000,000 in regional business sales by 2025 ($20,000,000 in Bucks County)
  • $50,000,000 in regional personal income by 2025 ($8,000,000 in Bucks County)
Regional Employment Growth Due to Travel Cost Savings - graph

Regional Employment Growth Due to Travel Cost Savings

 

Related Links

You also may download the full report (60 pages) of the economic impact study for complete analyses and results, or its executive summary (20 pages) for study highlights.

Market Attractiveness

Since highway interchanges typically provide links between local and regional markets that spur economic growth, the proposed interchange between the PA Turnpike and I-95 has the potential to impact the economies of Bucks County and the Greater Philadelphia region by:

  • Increasing the attractiveness of Bucks County as a premier office location
  • Increasing the flow of tourism dollars for Bucks County and the Philadelphia region

Office Attraction

The proposed interchange could increase Bucks County's competitive position compared to other Philadelphia suburban office markets. Potential office development could shift from elsewhere within the region to Bucks County. A smaller percentage of development would represent businesses moving into the area from other parts of the country. As a result, the economic benefits based on the study conducted in 2000 were:

  • 2,700 new jobs in Bucks County by 2025
  • $375,000,000 in business sales in Bucks County by 2025
  • $75,000,000 in personal income in Bucks County by 2025
Business Sales and Personal Income Changes in Bucks County graph

Business Sales and Personal Income Changes in Bucks County

Tourism

The lack of a connection between the region’s two major interstate highways has hampered the Greater Philadelphia region’s development as a tourist attraction. The new interchange could result in more opportunities to attract tourists to new and existing local tourist attractions. In the 2000 study this translated into 225,000 additional day visitors and 11,000 overnight visitors to the region by 2010. As a result, the economic benefits were:

  • $12,000,000 in regional business sales by 2025
  • $9,000,000 in regional personal income by 2025

 

Related Links

You also may download the full report (60 pages) of the economic impact study for complete analyses and results, or its executive summary (20 pages) for study highlights.

Quality of Life

In addition to increasing personal income and business profits, the proposed PA Turnpike/I-95 Interchange Project could positively affect the quality of life in the region making it a more attractive place to live and work.

Impact on Personal Travel Time

Since building the proposed interchange would create a more efficient highway network, travel time would be reduced for non-work related trips, such as shopping, recreation and other everyday activities.

Impact on Tax Revenues

The actual loss of property tax revenues from property displacements would be very small. It is likely that increased investment in existing properties and new development would greatly offset these small losses. For instance, the associated increase in assessed property values due to a highway interchange can be seen in West Conshohocken largely as a result of the Blue Route (I-476) opening in the early 1990s.

Changes In Assessed Value 1987-1997

TOTAL ASSESSED VALUE OF REAL ESTATE
 
1987
1997
% Change
West Conshohocken Borough$3,946,000$9,145,000131.75%
Bensalem Township$134,209,000$138,209,0002.98%
Bristol Township$18,239,000$18,996,0004.15%

Middletown Township

$102,855,000

$117,269,000

14.01%

Source: Local Government Statistics, PA DCED

As you can see, better highway access can substantially increase the tax base by encouraging new development.

Impact on Residential Property Values

History has shown that homes near a highway interchange can often increase in value. Since the proposed interchange would provide greater highway accessibility and reductions in local congestion, residential property values would likely increase or remain the same. Other factors that could positively affect residential property values include:

  • Project design - Incorporating design elements that minimize residential impacts
  • Placement of sound barriers - Constructing sound barriers would reduce highway noise
  • Removal of traffic - Reducing through-traffic from local roads and shifting it onto the interstate highways
  • Local property tax rates - Local homeowner taxes could be reduced as a result of an increased commercial tax base from new interchange-generated business

Impact on Health Care and Environmental Costs

Health care premiums are typically not determined by where you live. Since travel time savings help reduce accident rates, the proposed interchange may, in fact, decrease individual health care costs. In terms of environmental costs, the project would actually reduce regional auto emissions, because of the reduction in local congestion and cashless tolling (EZ-Pass) on the PA Turnpike. As a result, the proposed interchange would not exceed the national air quality standards for carbon monoxide, established by the U.S. Environmental Protection Agency.

 

Related Links

You also may download the full report (60 pages) of the economic impact study for complete analyses and results, or its executive summary (20 pages) for study highlights.

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