U.S. 2 report: Costs would exceed benefits to economy

HELENA - The costs of two proposals for major improvements on nearly 700 miles of U.S. Highway 2 across northern Montana would far outweigh any economic benefits from the projects, a new study has concluded.

The report, released today, showed that either of two proposals for remodeling the Hi-Line route ''showed minimal returns on such an investment,'' said Dan Rice of Great Falls, a member of the state Transportation Commission.

However, he emphasized that the study looked only at economic effects of transforming the highway into a ''super two,'' with wider shoulders and passing lanes, or an undivided four-lane. The study will not affect projects already planned for U.S. 2 over the next 10 years, Rice said.

He also said economic analysis is just one factor that transportation officials use to plan highway projects.

''There are many reasons not related to economic growth for MDT (Montana Department of Transportation) to continue its efforts to improve this important highway,'' he said today.

The study, by Cambridge Systematics Inc., is the first time the state has implemented a new process under a 2001 law that requires the department to include economic considerations in its highway planning and programming work.

The process was applied to U.S. 2 because the 2001 Legislature ordered the two-lane route remodeled into a four-lane highway, but required the funding come from the federal government and not divert money from other highway projects in the state.

The Cambridge study analyzed the costs of the two construction scenarios and compared them with the likely economic benefits from improving the 666-mile road from the North Dakota border to the Idaho state line.

The super-two project would cost an estimated $510 million, while the four-lane project would cost $1.3 billion.

The study looked at the possible economic benefits to highway users, the potential for attracting new business and the likelihood of increased tourism in the area as a result of either highway project.

By 2025, it estimated, the two-lane option would mean 140 additional jobs, a $10 million increase in gross state product and $6 million more in personal income. The four-lane alternative would mean 290 jobs, $23 million in additional gross state product and $12 million more in personal income.

Still, given the high cost of the projects, ''improving the entire segment of U.S. 2 to a continuous Super Two or a four-lane roadway does not return benefits to the state equal to the total cost,'' the study concluded.

Such a conclusion was to be expected, the report said.

''Given the high costs of reconstructing over 600 miles of roadway, the relatively low traffic levels and the lack of connections to major markets, it should not be overly surprising that the results indicate benefits to Montana are unlikely to exceed costs,'' it said.

To come up with a conclusion that benefits surpass the costs would require adopting some unreasonable assumptions about the potential effects of either construction proposal, the report said.

For example, the study would have to assume traffic will increase five to seven times faster than projected and that tourism traffic diverted from Canada would be two or three times greater than expected, the report said.

Dick Turner, chief of the department's Multimodal Planning Bureau, said the study will not determine the fate of U.S. 2. Other factors such as pavement and bridge conditions, safety and traffic congestion also play roles in decisions on where and what highway construction is needed.

''No one should believe that the department or the commission are going to make investment decisions based on just this one tool,'' Turner said. ''There is a need to do more work on that highway and modernize it to current standards.''

A study of economic impacts is also a part of an environmental impact statement being prepared for a project to improve the 45 miles of Highway 2 between Havre and Fort Belknap. That section is the first being proposed for widening to four lanes.

ICF Consulting studied the economic impacts as part of the EIS. It was the first time an economic study was included as part of an EIS in Montana.

ICF found that a four-lane Highway 2 would not have significant economic advantages over an improved two-lane in the 54-mile stretch.

Bob Sivertsen, president of the Highway 2 Association, has said he takes issue with the ICF study because the intent of the 2001 law was to help create a four-lane economic corridor from Minneapolis to Seattle.

Sivertsen could not be reached for comment today.

The Highway 2 Association hired its own consultant to review the ICF study, and to look at the economic impacts of having a four-lane corridor from Minneapolis to Seattle.

The association also has distributed a four-question survey to businesses along the highway in Montana to ask if they thought a four-lane Highway 2 would help the economy.

Havre Daily News reporter Tim Leeds contributed to this story.