Experts: Widening highway alone wont spur economy

The first study to determine the best way to improve U.S. Highway 2 is under way, but one question remains unanswered.

How much, if at all, will improving the highway improve the economy in the long run?

Not much, some experts say, unless other efforts are made to grow the economy as well.

"It's not about highways, it's about industries," said Daniel Hodge of Cambridge Systematics, which is studying economic impacts of highway improvements in Montana.

David Evans and Associates of Denver is preparing an environmental impact statement to find the best alternative for improving Highway 2 in the 48-mile section from Havre to Fort Belknap. The alternatives could range from doing nothing to widening the highway to four lanes.

One component of the study is the economic impact different alternatives could have. That component has not been included in most past EISs in Montana.

Congress appropriated money for the study after the 2001 Legislature passed a bill sponsored by Sen. Sam Kitzenberg, R-Glasgow. The law directed the Montana Department of Transportation to seek federal money to widen Highway 2 to four lanes. Under the bill, no state money can be used for the project.

Supporters of the bill say revitalizing the transportation system would revitalize the lagging economy along the Hi-Line.

Experts aren't so sure.

Glen Weisbrod, president of Economic Development Research Group of Boston, said the impact will be determined by the type of industry in the area.

"The economic impact of a highway in general depends on where it's going from and to and who it's serving," he said.

Dock Burke, research economist with the Texas Transportation Institute, agreed.

"Whether (highway widening) generates economic development in the area is largely an effect of what economic activity is in the area," he said.

If highway construction is done in areas where industries, like logging, would benefit from better transportation, economic development will result. Areas like northern Montana are not so likely to benefit, unless the construction is done in conjunction with developing new industries, like tourism, Burke said.

"If it's an exclusively rural activity and there's no other economic activity, then going to a four-lane road is probably not going to show up too much in economic development," he said. "I would probably go out on a limb here and say the positive economic benefits of the road will probably be to the users of the road."

Cambridge Systematics researchers Hodge and Christopher Wornum said highway development might help agriculture, but how much is uncertain.

Their company, headquartered in Cambridge, Mass., is the lead consultant in a state highway reconfiguration study that will examine the economic impacts of highway development in the state. Weisbrod is a subconsultant in the study.

Gov. Judy Martz requested the study following the debate over the economic benefits of widening Highway 2, and speculation on the value of widening or improving other Montana highways.

The study will not look at specific highway projects, Hodge said. Instead, it will examine what industries in an area are likely to benefit.

They have already seen significant differences in industries from region to region.

An example is the dairy industry, Wornum said. Dairy producers around Bozeman seem to focus much more on value-added products than those in other regions, changing the impact transportation has on the business.

The study will create business profiles to help determine which industries are growing and which are struggling, and which are likely to benefit from transportation improvements and which aren't, Wornum said.

Highway improvements are only one component of economic development, Wornum said. Part of the study will examine what other assets an area has that could encourage economic development. Those assets could include an available workforce, job training, capital and raw materials.

The end result of the study is to provide a way to estimate how much economic benefit will come to an area from highway development, Wornum said.

"To some degree it's meant to be a reality check," he said.

National attention

Weisbrod said the proposed widening of Highway 2 is attracting national attention, mostly because the Federal Highway Administration is studying the potential economic impact of improving the highway to the Fort Peck Indian Reservation and Roosevelt County.

Kitzenberg, who sponsored the Highway 2 bill, said he believes widening Highway 2 to four lanes will help existing businesses by providing more traffic, and will attract new industries.

"You're not even a contender if you don't have the transportation," he said.

Williston, N.D., is a perfect example, he said. Its economy stalled when the interstate was built in the south of the state. Now that Highway 2 has been widened to four lanes to Williston, it has seen a jump of $15 million annually in its economy, he added.

Weisbrod uses the construction of the interstate for the opposite argument. When examining communities along an interstate, researchers find that some benefitted from the highway construction and nothing happened in others.

"You only have to look at the interstate system to see that, clearly, just because you have highway work doesn't mean the economy will benefit," he said. "It's safe to say the economic impacts are not automatic."

The reason some communities don't grow on interstates is simple, Kitzenberg said. They get bypassed. The project for Highway 2 will be on the current route, and no towns will be bypassed, he said.

Kitzenberg predicts that widening Highway 2 will result in both a traffic shift from southern Montana and new traffic using the road.

More U.S. traffic will follow the northern route if it is improved, especially since Glacier National Park is on the route, he said. The highway will also attract traffic from southern Canada, which does not have adequate east-west routes, he added.

Taking some of the Interstate 90 traffic would not be a bad thing, he added, since the state should look to geographic fairness.

Burke warned that improving Highway 2, if it merely diverts traffic from the southern part of the state to northern Montana, doesn't guarantee a benefit to the state.

"If it's new, the whole state benefits. If not it's kind of a washout," he said. "If it's just a change in distribution, that's a real political situation."

Widening the highway doesn't even ensure the southern traffic will shift to the north, Wornum said.

"It's not sure to me at all," he said.

Two projects cited by proponents of highway construction to show the economic benefits are the Appalachian Development Highway System and the highways built under the recommendation of the Lower Mississippi Delta Development Commission, which was created by Congress in 1988.

Areas in the Appalachian region affected all of West Virginia and portions of 12 other states from New York to Mississippi showed significant economic improvement attributed to the highway improvements.

The regions served by the Delta highways have also shown significant economic improvements, but some experts say other factors influenced those regions.

At the Burton K. Wheeler roundtable in Great Falls in April, Federal Highway Administration transportation planner Robert Gorman said legalized gambling was increased in the Delta region at the same time highways were improved. That makes him question whether the construction is the main reason for the economic improvement, he said.

In the Appalachian improvements, the highways created new connections between many population centers, Gorman said. The stimulation created by those connections may not apply to all highway projects. Further studies are required to determine how much highway construction improves economies, he said.

Hodge said information from other projects like Appalachia and the Delta can help in highway planning, but examples like that have to be used with care.

"It's insightful, it's good to know about, but what you have to do is know about your own situation," he said. "To talk about Appalachia or the Mississippi Delta is far too simplistic."