Don't build and hope business will follow

September 4, 2013 

It's truly sad that the Chamber of Commerce has so little data on transportation that members still hope building new roads will spur development. Dozens of studies prove that when a business needs a road for access to a new facility, pursuant to an existing business plan for expansion, the community will benefit economically from providing supporting infrastructure, including a road. The same studies also show that building a road in the hope of attracting new development simply doesn't work. So, it's right to declare "if they come, we will build it," but quite wrong to say "if we build it, they will come."

In 2005, the federal government published one such report on four states' economic development highway programs. In three of them, funding was set aside for new roads needed to support new business investment, mostly new manufacturing facilities. Companies spent more than $75 for each dollar of highway investment; they created one sustainable job for each $4,000 of highway investment. The other state's program funded local modernization projects, where resultant economic development was hoped for. That money was largely wasted.

Specifically, Wisconsin spent $6 million on 21 projects -- less than $300,000 per project. Businesses invested $470 million in their new facilities, creating 1,397 new permanent jobs -- not counting temporary construction jobs. Similar results were found in Tennessee and Oklahoma. But Massachusetts did not report any growth resulting from its $17 million investments in 15 projects. So Illinois decides to copy the Massachusetts formula?

Richard Skillings


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