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THE ECONOMIC IMPACTS of the
RICHLAND COUNTY TRANSPORTATION PLANP R E P A R E D F O R C I T I Z E N S F O R A G R E A T E R M I D L A N D S
PREPARED BY MILEY & ASSOCIATES COLUMBIA, SC OCTOBER 2012
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This study is an update o our October 2010 reportThe
Economic Impacts o the Richland County Transportation
Plan. This updated report is an analysis o the economic
impacts o the latest transportation plan proposed in
Richland County or the unding o new transportation
inrastructure. The new Transportation Plan as approved
by Richland County Council in the summer o 2012 is
similar in size and scope o the 2010 Plan. As such,
this report is similar in its content and approach as our
2010 analysis.
As did the 2010 analysis, this report highlights the
substantial economic benefts to the Midlands rom the
Transportation Plan. In summary, these benefts are:
TheTransportationPlanshouldgenerateover$1.2billiondollars o total economic activity in the Midlands area.
Whentheeconomicdevelopmentimpactsarecombinedwith the construction and transit impacts, more than
16,500 new jobs created.
The implementation of the Transportation Plan willsignifcantly broaden the property tax base in Richland
County,generatingover$28milliondollarsayearinnew property taxes within the frst 10 years.
It is estimated that 42% of the collections fromthe penny will come rom those who do not live in
Richland County.
Itisestimatedthattheaveragehouseholdwillspend
lessthan$100moreayeartosupporttheplan.Thiscostwill be more than oset by signifcant improvements in
saety, signifcantly reduced commuting times and a
reduction in vehicle operating costs that are estimated
tobe$281ayear.
WithRichlandCountyimplementingalocallycontrolledand managed process to select contractors and
associated frms, the vast majority o the construction
work should be accomplished by local frms.
EXECUTIVE SUMMARY
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This study is an update o our October 2010 reportThe Economic
Impacts o the Richland County Transportation Plan. This updated report
is an analysis o the economic impacts o the latest transportation plan
(Transportation Plan) proposed in Richland County or the unding
o new transportation inrastructure. The new Transportation Plan as
approved by Richland County Council in the summer o 2012 is similar
in size and scope o the 2010 Plan. As such, this report is similar in its
content and approach as our 2010 analysis.
As did the 2010 report, this report highlights three major
categories of these impacts:
Permanentnew economicdevelopmentstimulated bynewandimproved roadways.
Economic activity generated by the construction of theinrastructure and operations o the transit system.
ReducedtraveltimeandtherelatedbenetstoRichlandCountyresidents due to new and improved roads.
In addition to these quantifable benefts rom the proposed
Transportation Plan, there are many other benefts rom the
Transportation Plan that are not addressed directly in this report
Foremost among these are the improvements in vehicle and
pedestrian saety. Richland County continues to be one o themore dangerous road systems in the State. As stated in the State
Newspaper in 2010:
According to the S.C. Department o Public Saety, Richland
County ranked second statewide in the number o pedestrians
injured by vehicles in 2009, and third in the number o bicyclists
hurt. The countys ranking was not as high or deaths.
Still, in the past fve years, 846 people on oot or on bicycle were
hit by cars in Richland County. O those, 140 were badly injured.
Thirty-eight people died.1
While the benets of reducing this level of accidents would be
substantial, they are not included in the impacts outlined in this study.
Other benefts are that the road improvements will reduce costs
to resident drivers. It is estimated that roads that are in disrepair
costtheaverageRichlandCountymotorist$281ayearinadditionalvehicle operating costs.2 There will be over $656 million in newroad improvements completed once the plan is ully implemented.
These improvements will help keep motorists operating costs rom
increasing due to poor road conditions.
ThePlancallsforover$300milliontobeallocatedtoCMRTAoverthe22-year period to stabilize, improve and expand the transit system.
The Transportation Plan will allow the CMRTA to expand its current
routes and improve operations o CMRTA. These improvements will
not only beneft the riders and users o CMRTA, but it also generates
additional economic activity in the Midlands area. In addition, the
transit improvements have additional benefts by reducing the
demand or motorists within the transportation system.
And fnally, there are numerous quality o lie benefts that will
result rom the Transportation Plan. The Plan calls or more than
$80milliontobeinvestedinnewsidewalks,newwalkingandbikepaths and greenways. These quality o lie benefts are valuable to
the community as well as having a positive impact upon attracting
commercial investment with the resulting job creation in RichlandCounty. In addition, these improvements also have indirect benefts
by reducing the demand or motorists within the transportation
system.
The components o the Transportation Plan are summarized in this
report but the complete details o the Transportation Plan are available
rom the Richland County website: http://www.richlandonline.com/
TransportationPenny/index.asp. The Transportation Plan is to und
the transportation improvements with a penny sales tax on sales in
Richland County over the next 22 years. This unding method or new
roads and other transportation inrastructure has been implemented
successully across the nation. More importantly, due to limited
transportation unding resources available to communities in SouthCarolina, several other counties in South Carolina such as Newberry,
York, Charleston and Horry have successully implemented a penny
sales tax to help their communities meet the growing transportation
needs o the residents.
TheTransportationPlanwillgenerateover $1.1billion dollars inrevenuesoverthe22-yearlifeofthePlan.Ofthatamount,$656millionis earmarked fortransportation constructionimprovements;$301million is earmarked or the public transit system and approximately
$81millioninbikepaths,sidewalksandgreenways.Thepennysalestaxisestimatedtogenerateapproximately$54millionayearintheinitial years and increase annually during the 22-year period.3
It is important to note that an estimated 42% of these sales taxes
will be paid by non-residents of Richland County.4
The proposed Transportation Plan is analyzed here using two primary
economic impact methods: IMPLAN (MIG Inc., 2010) or construction
impacts rom road improvements and transit operations; and
TREDIS (TREDIS, 2010) or economic impacts o transportation
inrastructure improvements that aect travelersboth business
and personalwho use the system.
INTRODUCTION
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The economic impacts rom the transportation improvements can be
separated into two major categories:
NewandExpandedEconomicDevelopment
EconomicActivityfromroadconstructionandtransitoperations
The frst category is composed o the new and expanded economic
development that will be stimulated by new and improved roads. These
economic impacts will be permanent impacts that aect the entire
county in terms o new capital investment, new jobs and new tax base.
These tax base benefts will not only beneft Richland County but will
also have positive impacts on the City o Columbia and Richland OneandRichland Twos tax base. While there areover30 separate roadand intersection improvement projects in the Transportation Plan that
will have meaningul economic and job creation impacts, there are two
projects that will have immediate and ar reaching impacts once the
roadimprovementsarecompletedTheWilliamsStreetExtensionandthe Shop Road Extension.
WILLIAMS STREET EXTENSION AND
RELATED IMPROVEMENTS
This project is one o the most potent components in the Transportation
Plan in terms o potential ongoing economic development impacts. It will
open up previously undevelopable properties in and near the downtown
area. Based on estimates rom Sasaki Associates and the Schunk Report,
itestimatedthattheWilliamsStreetextensionandrelatedimprovementswill generate direct impacts in the Columbia area o over 1.1 million
square eet o ofce and commercial development within the frst 10
years once the Williams Street extension and related improvementsare completed.5Thisdevelopmentequatestoover$117milliondollarsin capital investment. This $117million in capital investment doesnot include the capital investment that will occur as properties in the
surroundingareaarealsodeveloped.Within10yearsfromthecompletiono this component o the Transportation Plan project, it is estimated that
therewillbeover1,400newjobscreatedinthedowntownarea.Theproperty taxes generated by this capital investment are estimated to be
over$3.4millionperyear.
SHOP ROAD EXTENSION
This project is perhaps the most potent component in the Transportation
Plan in terms o potential ongoing economic impact. It will open up
previously undevelopable lands near the industrial corridor along Garners
FerryRoad,BluffRoadandI-77.Thisroadprojectisestimatedtoopenupover3,600acres oflandtomajoreconomicdevelopmentprojects.Perhaps more importantly, the areas that this road project will open up
or development include large tracts o land with more than 100 acres
that have adequate utilities and interstate access. These large tracts
are relatively scarce in Richland County and would be very attractive
to large manuacturing and distribution acilities that now by-pass the
County due to the lack o such tracts. These areas would also enhancethe potential or Richland County to increase the number and variety
o Certifed Sites in the County (See South Carolina Department o
Commerce or inormation on the Certifcation Process).6 As o 2012, the
County has one Certifed Site. The improved access to the Shop Road
area could potentially lead to more Certifed Sites in the County and
substantially enhance the Countys economic development eorts.
Based on these new sites or development, it is estimated that within
tenyearsoftheprojectscompletion,therecouldbeover3.75millionsquare eet o distribution and industrial development in this area. This
developmentwouldstimulateanestimated4,000newjobsandrepresentacapitalinvestmentofover$1.0billion.Thepropertytaxesgeneratedby
thiscapitalinvestmentwillbeover$25.1millionperyear.
As seen in Table 1, together these two projects could generate almost
$1.2billion innew capitalinvestment,morethan 5,500newjobs inRichlandCountyandgenerateover$28millioninnewpropertytaxesonan annual basis. Based on the estimated project costs, these two projects
will pay or themselves several times over within the frst ten years ater
they are completed.
And it is important to note again that while these are the two projects that
are most likely to directly stimulate economic development in Richland
County, there are 12 other road projects and 19 intersection improvements
in the Transportation Plan. These other road projects and intersection
improvements will stimulate capital investment and job creation aswell. The estimates provided herein thereore, should be considered as
minimum levels o impacts rom the entire Transportation Plan.
ECONOMIC IMPACTS
ESTIMATED
PROJECT COSTS
WilliamsStreet&RelatedImprovements $50.0Mil
$71.8Mil
$117.3Mil
$1,039.9Mil
1,445
4,063
$3.4Mil
$25.1MilShop Road Extension
CAPTIAL
INVESTMENT
NEW
JOBS
ANNUAL
PROPERTY TAXES
Total Impacts From Two Projects
TABLE 1: ECONOMIC DEVELOPMENT IMPACTS FROM WILLIAMS STREET AND SHOP ROAD EXTENSIONS
$121.8Mil $1,157.2Mil 5,508 $28.5Mil
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The second major category o economic impacts are those that will be
generated directly rom the construction o the road and pathway projects
themselves, as well as the operations o the transit system. This category
iscomprisedofthedirectimpactsfromthe$737millionofconstructionand construction related activities such as building the new roads,
intersections, bike paths, trails, etc. This group o impacts also includes
thepositiveeconomicimpactsofthe$301millioninoperationsofthepublictransportationsystemforatotalofover$1.1billionofincreasedeconomic activity generated directly rom the Transportation Plan.
However, it must be noted that the positive impacts generated by the
spending outlined above will be partially oset by a partial reduction
in local consumption spending by Richland County residents due to the
penny sales tax. This is estimated to reduce spending in Richland County
byabout$280millionduringthe22-yearlifeoftheTransportationPlan.
The Plan is projected to cost the average household in the County
approximately$96ayearinadditionalsalestaxes.7 This estimated costper household includes the beneft o two recent actions by Richland
County and the City o Columbia. The City reduced the ranchise ee on
electricitythatwillsavetheaveragehousehold$19peryear.TheCountyeliminatedthe$7.50vehiclefeeonCountyResidents.Combined,thesetwo actions will reduce the annual cost o the Transportation Plan.
The net eect o the Transportation Plan is a direct economic impact o
over$874millionoverthedurationoftheplan.This$874millionwillhave multiplied impacts throughout the Midlands and will have a major
impact on the Midlands.
The impacts o these expenditures are outlined in Table 2 below. As
the construction dollars are spent and re-spent in the Midlands area,additional economic activity is created or those companies and
individuals that supply goods and services to the construction o the
transportation projects. The recipients o this income will spend this
income on other goods and services.
Each time, some o the purchases will be or goods and services within
the Midlands area and some will be or goods and services rom outside
the area (reerred to as leakages). The well-known multiplier eect
estimates the aggregate amount o local buying and selling that occurs.8
The multipliers used in this analysis estimate three components o total
change within the local area:
Directeffectsrepresenttheinitialchangeintheindustryinquestion.Indirect eects are changes in inter-industry transactions as
supplying industries respond to increased demands rom the
directly aected industries.
Induced effects reect changesin localspendingthat result fromincome changes in the directly and indirectly aected industry sectors.
This cycle o spending continues until leakages rom the region (spending
on goods and services outside the area) stop the cycle. Due to thesemultiplier eects, the initial, direct expenditures on these transportation
projects results in indirect and induced impacts o many more dollars.
As seen in Table 2 below, this direct impact o the road construction and
transit operations will have indirect and induced impacts in the Midlands
areaforatotalofalmost$1.2billionimpactontotaleconomicactivityinthe Midlands area.
The direct impacts o the construction and transit operations will create
and support thousands o jobs in the Midlands. As seen in Table 2, there
willbeover4,100jobscreatedandsupportedbythesedirectactivities.Inadditiontothesedirectemployees,therewillbeanother7,400jobs
supported by the indirect and induced eects or a total o more than11,500 jobs supported in the Midlands as a result o the penny sales
tax plan. These impacts will begin to occur immediately and continue
through the lie o the Transportation Plan.
Andnally, therewill bealmost$162million ofdirect labor incomegenerated in the Midlands area as a result o the transportation plan.
These direct impacts will then have indirect and induced impacts o
another$265millioninlaborincomeforatotalofover$426millionimpact on labor income in the Midlands.
It is important to note that these multiplied impacts could be higher than
those estimated here. The size o the multiplied impacts will depend
on how much spending is done with local contractors. In general, the
more local contractorsthe higher the multiplied impacts will be.
Richland County has approved an approach to utilize private sector
program managers to oversee the majority o road construction work. In
addition, Richland County Council is developing a procurement process
to assure the involvement o local, small and minority frms. Given these
actions, it is more likely that the vast majority o the Transportation Plan
expenditures will be to the beneft o local frms.
Whilemanyofthesejobswillbeconcentratedintheconstructionandrelated
sectors, jobs will also be created in many other sectors in the Midlands
economy. For example, jobs will be created in a dozen or more sectors
including the architectural, engineering, real estate, accounting, legal,
employment services, security and ood and drinking establishment sectors.
ECONOMIC IMPACTS (continued)
EMPLOYMENTIMPACT TYPE
Direct Eect
Indirect Eect
Induced Eect
4,170
809
6,536
$161,543,945
$41,562,342
$223,623,715
$389,509,246
$98,327,294
$666,500,931
LABOR INCOME OUTPUT
Total Eect 11,514 $426,730,002 $1,154,337,471
TABLE 2: ECONOMIC IMPACTS OF THE TRANSPORTATION PLAN CONSTRUCTION AND OPERATIONS, YEARS 1-22
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ECONOMIC IMPACTS
Both IMPLAN and TREDIS calculate the economic impacts o a penny
tax on retail sales that fnances the Transportation Plan. Nonresidents
ofRichlandCountypay42percentofthesalestaxbecausetheyaccountfor42percentofretailsales.Asarule,householdspurchaseor fnal consumption and constitute the single largest component
o fnal demand (Miller, 2009). Income largely dictates consumer
consumption, an assumption that is the oundation o apportionment
o the tax burden, whether local or nonlocal. Estimates o new and
expanded development are based on estimates rom the Greater
Columbia Chamber o Commerce, Sasaki Associates, and theSchunk Report, April 2006. Dollar values or investment per square
oot, tax value, and job creation are based on these reports. The
WilliamsStreetandrelatedroadwaysprojectassumes28%of thedevelopment projected by Sasaki Associates. Millage rates are
those that exist as o October 2012 and are provided in the millage
rate sheet on the Richland County Auditors website: http://www.
richlandonline.com/departments/auditor/orms/2009Millage.pd
Investment in the Shop Road area is assumed to be 10,000 square
feetofdevelopmentperacreandassumes50%ofthedevelopmentisdistributionand50%industrial.Industrialisassumedtogenerateemployees at 600 square eet per employee and distribution assumes
2,000 square eet per employee. Capital investment is equal to theSouth Carolina statewide average per South Carolina Department o
Commerce2011data,$255,834peremployee.
CONSTRUCTION IMPACTS
Construction impacts are calculated using three activities; 1)
State and Local road construction, 2) State and Local government
expendituresgeneral,and3)StateandLocalpublictransportation.Estimates are made to determine which portion o tax is paid by
local and non-local residents (Impact DataSource, 2010). Economic
impacts are aggregated, resulting in a fnal construction impact or
the study year. Estimate o sales taxes paid per household based
onBLSdata,ConsumerExpenditureSurvey.Itisassumed20%ofconsumer expenditures are made outside Richland County.
TRANSIT
Transit operations arereclassiedas sector430,stateandlocalgovernment passenger transit. The sector is modifed by zeroing
the Proprietor Income and Other Property Type Income. Once this is
completed, labor cost is estimated by using a ratio o Intermediate
ExpenditurestoOutput.Laboris57%oftotalbudget,withotherbudgetitemsbeingthebalance,43%.
GEOGRAPHY
Richland County is the primary study area. Linked counties aected
by Richland County projects include Calhoun, Fairfeld, Kershaw,
Lexington, Newberry and Sumter.
TIME PERIOD
Transportation estimates are for 2035. They are based on 2005Travel Demand Model (TDM) trafc data. Economic estimates are
in 2012 dollars.
METHOD
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MILEY & ASSOCIATES
ENDNOTES
Miley&AssociatesisoneoftheSoutheastsleadingeconomicandfnancial consulting frms. The frm specializes in economic impact
analyses, fscal impact analyses, easibility reports, impact eestudies and beneft/cost modeling. Our clients include national
and prominent local real estate developers, school districts, local
governments, regional development agencies, and other private
sector development rms. Miley & Associates partners appearregularly beore decision-makers at all levels o government
and understand the values, needs and desires o the clients they
represent. With ofces located in Columbia, South Carolina, thefrm is well positioned to provide clients with hands-on service or
projects throughout the entire Southeast region.
Miley&Associatesappreciatesthateveryresearchprojectisuniqueand deserves a custom solution. Public policy decisions are not
made overnight, and we excel at providing advice and counsel alongtheway.Werepresentourclients.Ourbusinessplanissimple:weocus on exceeding our clients expectations and building long-term
relationships.
Miley& Associates, Inc. was founded in1993 byHarry W. Miley,Jr. Ph. D. The Company is an economic and fnancial consulting
frm providing a range o analytical services to public and private
sector clients. Miley & Associates conducts scal and economicimpact analyses o proposed new developments and has extensive
experience in assisting clients with their economic development andcommunity revitalization projects.
Dr. Miley served as Chairman o the South Carolina Board o Economic
Advisors (BEA) under two Governors. The BEA is responsible or
estimating the States revenues or the Governor and the General
Assembly to use in ormulating the States annual budget. Dr. Miley
was originally appointed as Chairman by Governor Carroll Campbell
and continued to serve as Chairman or Governor David Beasley.
Dr. Miley was the Senior Executive Assistant or Economic
Development to Governor Campbell from 1987 to 1989. Dr. Mileyserved as principal advisor to Governor Carroll Campbell on the
states policies or economic development, employment and
training, work orce and adult illiteracy, technical education and
transportation issues.
Prior to joining the Governors Ofce, Dr. Miley was on the aculty o
the Moore School o Business at the University o South Carolina and
Associate Director o the Division o Research at the School.
1 http://www.thestate.com/2010/10/03/1494224/richland-tax-plan-includes-trails.html#ixzz11KMvF9U32 Future Mobility inSouth Carolina: Meeting the States Need or Sae and Efcient
Mobility, TRIP, May 2009. Adjusted by Consumer Price Index to
reect2012prices.3TransportationStudy2012RevisionRichlandCountyOn-CallServices-TaskOrder#4,RichlandCounty,June11,2012.4AnalysisofaLocalSalesTaxintheCityofMilwaukee,C.Hoback,et.al.,WorkshopinPolicyAnalysis,DomesticIssuesPublicAffairs#869,RobertM.LaFolletteSchoolofPublicAffairsUniversityofWisconsin-Madison,Spring2005.
2 Future Mobility in South Carolina: Meeting the States Need orSae and Efcient Mobility, TRIP, May 2009. Adjusted by Consumer
PriceIndextoreect2012prices.
3Transportation Study 2012 Revision Richland County On-CallServices-TaskOrder#4,RichlandCounty,June11,2012.
4AnalysisofaLocalSalesTaxintheCityofMilwaukee,C.Hoback,et.al.,WorkshopinPolicyAnalysis,DomesticIssuesPublicAffairs#869,RobertM.LaFolletteSchoolofPublicAffairsUniversityofWisconsin-Madison,Spring2005.
5 5 Sasaki Associates and Economic and Fiscal Benefts o
Innovista, Donald L. Schunk, April 2006.
6 South Carolina Department o Commerce 2012 Industrial Site
Certifcation Program, http://sccommerce.com/sites/deault/fles/
document_directory/2012_scdoc_program_manual.pd
7Based on BLS Consumer Expenditure data, Richland CountyHousehold income (see. http://quickacts.census.gov/qd/
states/45/45079.html)andoffsetstohouseholds
8Theimpactsfromconstructionexpenditurescanvarydepending
on how much o the activity is contracted locally. The more localcontractors involved in the process, the higher the economic
impacts will be in the local economy. The estimates incorporated
in this analysis are based on the standard trade coefcients o the
IMPLAN model or the Midlands area.