CARR - Citizens for Appropriate Rural Roads
 

Jobs Created by I-69 in Key Areas Cost $1.5 Million Each

I-69 Opponents Say New Study Shows It's "Cheaper to Throw $100 Bills Out the Window"
January 20, 1999

While the State has promoted the proposed new Interstate 69 highway as an economic development project for four rural Southwest Indiana counties, each new job that I69 would create in those counties would cost more than $1.5 million, according to a new study based on the State's own projections.

By contrast, most rural economic development programs cost between $1,000 and $5,000 for each new job created, according to the study. None of the programs that the study examined cost more than $30,000 per job. "Given that the cost-per-job for the proposed new I69 highway is over 50 times higher than the cost of traditional rural economic development programs, the highway does not represent a cost-efficient economic development strategy for the four rural counties," the study concludes.

The Indiana Department of Transportation (INDOT) has stated that the primary purpose of the proposed billion-dollar new I69 highway is to stimulate economic growth in Gibson, Pike, Daviess and Greene Counties. The highway would create additional jobs outside those counties, primarily around Bloomington and Evansville. But INDOT has acknowledged that neither Bloomington nor Evansville is suffering economically.

The new study, The Proposed New Interstate 69 Highway: Is It a Cost-Effective Rural Economic Development Tool for Southwestern Indiana?, compares the cost of creating jobs in the four counties using I69 against the cost of traditional rural economic development programs.

The study was prepared by independent economic development specialists at the University of Illinois at Chicago, including an economist and a sociologist who is Associate Editor of the Economic Development Quarterly. It was paid for by Citizens for Appropriate Rural Roads and the Environmental Law and Policy Center of the Midwest.

The study uses the State's own cost and job-creation projections for the Evansville-to-Bloomington portion of the highway as the basis for its calculations. The State has not yet issued job-creation or cost projections for the Bloomington-to-Indianapolis segment of the project.

Opponents of the new highway said the study severely undercuts INDOT's justification for supporting a new I-69 highway and opposing a less expensive alternative.

"This study confirms that I69 is an extraordinarily poor investment of our tax dollars," said Thomas Tokarski, President of Citizens for Appropriate Rural Roads. "INDOT claims that I69 is designed to create jobs in rural Southwest Indiana. Given the absurdly high cost of the few jobs it would create, I69 simply cannot be justified as a rural economic development tool."

"It costs so much to create jobs with I69 that it would be cheaper to fly over Southwest Indiana and throw $100 bills out the window," added Alexander Ewing, staff attorney at the Environmental Law and Policy Center of the Midwest.

The proposed new Evansville-to-Indianapolis I69 highway has not yet been funded and is still in the planning stages. The leading alternative to a new highway is to use existing four-lane roadways instead - upgrading US 41 to an interstate highway between Evansville and Terre Haute, taking advantage of a bypass around Terre Haute that is already on the drawing board, and connecting to existing Interstate 70 between Terre Haute and Indianapolis.

Compared to a new highway, US 41/I70 would save taxpayers more than $600 million, according to Andy Knott, air and energy policy director for the Hoosier Environmental Council. Yet US 41/I70 would result in a route between Evansville and Indianapolis only 10 miles longer than the new highway, according to figures in INDOT's own studies, Knott said.

INDOT has opposed US 41/I70 on the ground that it would not bring economic growth to Gibson, Pike, Daviess and Greene Counties. This new study shows that INDOT's reasoning does not hold water, Knott said.

In April 1998, NBC-TV Nightly News with Tom Brokaw labelled I69 a "Fleecing of America," saying it would "take you and your tax dollars for a billion-dollar ride." In May 1997, a study by an Indiana University economist found that the cost of a new I69 highway would exceed its benefits by $115 million, and that every $1 spent on the highway would result in only 81 cents in benefits.

Additional information about I69 is available on the web sites of the Environmental Law and Policy Center and Citizens for Appropriate Rural Roads .

Note: The Executive Summary portion of the new study is attached. The entire 12-page study may be obtained Full Text of Wim Wieval Study: The Proposed New Interstate 69 Highway: Is It A Cost-Effective Rural Economic Development Tool For Southwest Indiana?

Executive Summary
January 1999
This study examines the cost-effectiveness of the Evansville-to-Bloomington portion of the proposed new Interstate 69 highway in Southwest Indiana in fulfilling its stated purpose of stimulating economic development in four rural counties -- Gibson, Pike, Daviess and Greene. To do so, we compare the proposed highway with other, more traditional rural economic development programs and strategies: rural enterprise zones, two federal government economic development programs, business incubators and local industrial development groups. As a basis for comparison, we use cost-per-job.

Using Indiana Department of Transportation ("INDOT") cost and job-creation estimates, we first calculate the cost-per-job of using the proposed highway as an economic development tool for these counties. We then compare that figure with cost-per-job data that has been gathered for other rural economic development programs based on experience with those programs throughout the country.

We conclude that:

  • The cost of each new job that the proposed new highway would create in the four rural target counties is $1.56 million.
  • The other, more traditional rural economic development programs and strategies that we examine have created jobs elsewhere in the country at costs ranging from $437 to $28,350 per job. For most of these programs, such as rural enterprise zones, business incubators and U.S. Economic Development Administration public works projects, the average cost-per-job is between $1,000 and $5,000.
  • Given that the cost-per-job for the proposed new I69 highway is over 50 times higher than the cost of traditional rural economic development programs, the highway does not represent a cost-efficient economic development strategy for the four rural counties.

This study does not take a position on whether the proposed new highway should be built. Nor does it advocate any specific alternative or set of alternatives. However, if the purpose of the I69 project is economic development in these rural counties, as the Indiana DOT has stated, far more cost-efficient alternatives almost certainly exist.

The authors of this study are specialists in economic development at the University of Illinois at Chicago. Wim Wiewel is Dean of the College of Urban Planning and Public Affairs. He has written extensively on economic development topics, and is Associate Editor of the Economic Development Quarterly. Joseph J. Persky is Professor of Economics. Mark Edward Sendzik is a Ph.D candidate specializing in public policy analysis. This study was paid for by Citizens for Appropriate Rural Roads and the Environmental Law and Policy Center of the Midwest.

Note: The following is not part of the new study, but is provided for background information.

Statements by INDOT About the Purpose of the Proposed New I69 Highway And Its Reasons for Opposing the US 41/I70 Alternative
January 20, 1999
The Indiana Department of Transportation (INDOT) has stated repeatedly that the primary purpose of the Evansville-to-Bloomington portion of the proposed new Interstate 69 highway is economic development in the rural Southwest Indiana counties of Gibson, Pike, Daviess and Greene. INDOT has opposed the US 41/I70 alternative route for I69, which opponents of the new highway are promoting, on the ground that it would not bring sufficient economic growth to these four counties:

  • The Draft Environmental Impact Statement (DEIS) for the highway, which is the most extensive public document about I69 that INDOT has prepared, refers constantly to these four counties in discussing the "purpose and need" for a new highway. The DEIS provides charts showing population and business trends in the four counties, and comparing them to other counties in Southern Indiana that have interstate highways. In rejecting the US 41/I70 alternative, the DEIS states: The counties of Daviess, Gibson, Greene, and Pike need to be served by a 4 lane freeway type facility. Upgrading US 41 to a freeway facility will help Gibson County but will not help Daviess, Greene, or Pike Counties. (p. 12)
  • Similarly, in a letter to the editor of the Indianapolis Star, INDOT Commissioner Curtis Wiley stated:
    [T]he U.S. 41 alternative . . . would not provide the economic growth opportunities to the four counties that need it most: Greene, Pike, Daviess and Gibson. That's what the [Interstate 69] Highway is all about: economic growth. . . . Further, a snapshot of economic development in Indiana from 1988 to 1996 . . . clearly tells the economic reasons for this highway. The four counties the [I-69] Highway would most benefit experienced less than 1 percent of the state's growth rate in this eight-year period. Another statistic centers on where businesses locate when coming to our state. In a two-year period in the early 1990's, only seven out of 99 businesses locating in Indiana chose Greene, Pike, Daviess and Gibson counties. Why? The lack of a four-lane highway.
  • The U.S. Environmental Protection Agency, a federal government agency, has confirmed that "the main purpose of the proposed project appears to be economic development primarily in Gibson, Pike, Daviess, and Greene Counties."

Copies of these statements may be obtained by fax by calling Sandy Ewing at (312) 795-3708 or email to Alexander Ewing.

 

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