Practices for Evaluating the Economic Impacts and Benefits of Transit (2017)

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38 chapter four Survey of Agency PrActice overview This chapter examines the current state of transit agency practice concerning the use of economic impact and economic benefit studies. The focus is on transit operating agencies; however, public organizations involved in transit planning—including MPOs and state DOTs—are also included. The survey was targeted specifically to agencies that have had some actual experience conduct- ing, sponsoring, and/or overseeing transit economic impact or benefit studies. This is a select group, because the vast majority of transit planning and operating agencies have had no experience with this type of study—a situation that is clear from the limited number of local studies that were identified in the chapter three literature review. For this selected population, the survey provided information about the motivation for conducting economic impact or benefit analysis, how the analysis question or topic was defined, methods used for analysis, ways that analysis results were used, and perceptions of future opportunities and needs to improve the state of practice. DAtA collection ProceSS The information collection process involved four steps. Step 1: Nominations. Early in the study process, the research team reached out to the TCRP Project Panel overseeing this project requesting nominations of agencies that have conducted, spon- sored, or otherwise had some prior economic impact or benefit analysis done. Subsequently, APTA distributed a version of this same request to its public-sector membership of more than 1,000 member agencies. Step 2: Short list. The responses to these requests were combined with the names of agencies identified from the literature review process. Altogether, 35 agencies were identified as com- prising the population of transit-related organizations that had EIS. The project team then made a series of telephone calls to identify the most relevant person in each of those agencies. Six agencies were eliminated because no one could be identified who was knowledgeable about the earlier study; that left 32 eligible agencies with contacts. Step 3: Online survey. The contact person at each of the eligible agencies was sent an e-mail invi- tation to fill out an online web survey. The survey was structured to identify the respondent agency and elicit responses to 11 questions, as listed in Figure 2. The actual survey instrument is shown in Appendix B. Step 4: Tabulation of responses. The web survey was completed by 28 agencies, representing 88% of the eligible population (these agencies are listed in Appendix C). Results were tabulated into charts and graphs, which are described in the rest of this chapter. Survey reSultS: exPerience with economic AnAlySiS Subject of economic Analysis In terms of overall response (Table 11, part D), the most common type of study concerned the exist- ing economic role or contribution of the entire transit agency or system. The second most common

39 FIGURE 2 Survey questionnaire. Source: survey questionnaire shown in Appendix B. (A) Scope of Study (multiple responses) Yes % of Total The entire transit system 27 96 A line of subsystem 18 64 An individual site or station 10 36 (B) Time Frame of Study (multiple responses) Yes % of Total Past investment 16 57 Existing operations 17 61 Future scenario 22 79 (C) Time Frame for Given Scope of Study Past Investment Existing Operations Future Scenario Total The entire transit system 26% 48% 26% 100% A line of subsystem 39% 11% 50% 100% An individual site or station 20% 20% 60% 100% (A) Frequency of Responses Past Investment Existing Operations Future Scenario The entire transit system 7 13 7 A line of subsystem 7 2 9 An individual site or station 2 2 6 Source: Survey of agencies sponsoring transit economic impact or benefit studies. TABlE 11 WhAT WAS ThE SuBjECT OF YOuR AgEnCY’S STuDY (or studies)?

40 type of study was the analysis of a proposed future scenario—either for expansion of the entire system or a specific transit line. however, most of the respondents reported having conducted multiple types of studies. Conse- quently, although studies of the economic role or impact of entire systems were the most common, a majority of respondents also reported having had a study of a single transit line, and more than one-third also reported having had a study of an individual station (Table 11, part A). Although the system-wide studies were most commonly focused on existing operations, the line and station stud- ies were mostly predictive (ex-ante) impact forecasting exercises (Table 11, part C). Retrospective (ex-post) documentation of past investments was the least common type of study; however, even that type of study was reported by nearly one-quarter of all respondents. type of economic impact Among those who had experience with economic studies, the distinction between spending impacts and performance impacts was generally well understood, and the vast majority (more than three- quarters) reported that their agency had studies that considered both types of effects (Table 12). impact measures The most common form of impact metric was that of economic (job and income) effects—reported by 89% of respondents. Most agencies (more than 60%) also reported documenting transportation user (travel) benefits, which are a major driver of economic impacts, and environmental benefits—which are the most common non-user impact in societal or social welfare benefit measures (Table 13). motivations The dominant motivation for conducting economic impact and benefit studies was to make the case for funding to legislators and public officials—reported by 89% of respondents (Table 14). The Type of Study: (multiple responses) Yes % of Total Spending effects of construction and/or operations 23 82 Performance effects of transit service 21 75 Source: Survey of agencies sponsoring transit economic impact or benefit studies. TABlE 12 WhAT TYPES OF EFFECTS WERE COnSIDERED BY ThE STuDY (or studies)? TABlE 13 hOW WERE ThESE IMPACTS ASSESSED? Impacts were assessed in terms of? (multiple responses) Yes % of Total the value of traveler benefits (e.g., travel time, cost, safety) 18 64 the value of environmental and/or community benefits 17 61 wider effects in the economy (e.g., jobs, GDP, wages, or sales) 25 89 Source: Survey of agencies sponsoring transit economic impact or benefit studies. TABlE 14 WhAT WERE ThE PRIMARY MOTIvATIOnS FOR ASSESSIng IMPACTS OR BEnEFITS OF TRAnSIT? Motivations (multiple responses) Yes % of Total Public information 19 68 Making the case for funding 25 89 Long-term planning 10 36 Project prioritization 9 32 Evaluation of project alternatives 7 25 Evaluation of prior investments 6 21 Source: Survey of agencies sponsoring transit economic impact or benefit studies.

41 other dominant motivation was to inform the general public (68% of respondents). less common use of economic impact and benefit analysis (20% to 36% of respondents) was reported for use in other stages of the transportation planning process, including long-term planning, prioritization of projects, alternatives analysis, and post-project follow-up of results. frequency Only three agencies conduct economic impact or benefit analysis on a regular basis, such as would exist if they maintained an economic impact program (Table 15). The remainder reported that their agencies conduct economic impact or benefit analysis only occasionally, specifically when there is a very large project or special situation requiring consideration of economic impacts. Analysis tools The analysis tools used for EIA reflect the mix of studies done. The dominant tools, used by more than 50% of the agencies, are travel demand models and regional economic simulation models, which are normally used together to calculate economic impacts of proposed future scenarios (Table 16). Also common are surveys and interviews as data sources and custom spreadsheet tools for calculating the value of societal benefits (each used by 46% of agencies). Almost 40% also reported use of I-O multiplier models to calculate spending impacts. Relatively few (25% or less) reported on the use of on-site observations, focus groups, data tabulations, and statistical studies. Parties who conduct the Analysis More than one-third (36%) of the respondents reported that their agency used in-house staff to con- duct some of their economic analyses (Table 17). however, many also relied on outside contractors TABlE 15 hOW OFTEn DOES YOuR AgEnCY QuAnTIFY ThE ECOnOMIC vAluE OF TRAnSIT In TERMS OF EIThER IMPACTS OR SOCIETAl BEnEFITS? Frequency of economic studies (choose one) Yes % of Total We do it regularly (e.g., assessing system value every few years or evaluating every major project) 3 11 We have done it for special situations or special types of projects 25 89 Total 28 100 Source: Survey of agencies sponsoring transit economic impact or benefit studies. TABlE 16 WhAT AnAlYSIS TOOlS OR METhODS hAS YOuR AgEnCY uSED FOR ECOnOMIC AnAlYSIS? Analysis tools used (multiple responses) Yes % of Total Travel demand or traffic network model 15 54 Direct surveys or interviews 13 46 Direct on-site observations 7 25 Comparison to case studies elsewhere 5 18 Statistical/regression analysis 4 14 Static input/output models (e.g., IMPLAN, RIMS, etc.) 11 39 Economic simulation models (e.g., REMI, TREDIS, etc.) 16 57 Custom spreadsheet tools 13 46 Other (please specify)* 7 25 *Other reported analysis tools were: (1) focus groups, (2) cost-benefit analysis for new bus garage and economic benefits analysis of transit for certain sectors of economy, (3) local economic and sales tax forecasts, (4) proprietary triple bottom line tool used by consultants, (5) sales tax information, and (6) the CUTR (Center for Urban Transportation Research) Economic Impacts of Spending on Public Transit methodology. Source: Survey of agencies sponsoring transit economic impact or benefit studies.

42 for software or assistance in the effort. That is evident because more than 82% also reported that they use outside contractors and 36% use university researchers. A small number of transit operating agency staff also reported relying on staff from other agencies, either MPOs or state DOTs. impact and Benefit metrics The dominant measure of economic impact, reported by more than 82% of respondents, was growth in employment (jobs). More than half (54%–64%) also reported that they showed impacts on wages (personal income) and/or gDP (value added). In addition, more than half (53%–57%) reported that their studies addressed the value of societal benefits and effects on property values or land development (Table 18). limitations and Barriers More than 89% of respondents reported that there was interest within their agency in finding ways to better address economic impacts and benefits of transit. Among those looking for improvement, the questionnaire asked about what is needed to make this possible. getting sufficient agency funding and staff time were reported to be the most important barrier to overcome (reported to be very impor- tant by 76% of respondents). A majority (56%–60%) also reported that it was also very important to overcome barriers related to the availability of appropriate data, analysis tools, and staff training (Tables 19 and 20). remaining needs Finally, survey respondents were encouraged to list other specific needs that, if addressed, would enable them to better document the impacts and benefits of transit. Their responses cover a range Who conducted the analysis? (multiple responses) Yes % of Total In-house staff 10 36 Staff from another agency 2 7 Outside contractor 23 82 University researcher 10 36 Source: Survey of agencies sponsoring transit economic impact or benefit studies. TABlE 17 WhO WERE ThE PRIMARY InDIvIDuAlS COnDuCTIng ECOnOMIC AnAlYSES? Interest in better addressing economic value? Number % of Total Yes 25 89 No 3 11 Total 28 100 Source: Survey of agencies sponsoring transit economic impact or benefit studies. TABlE 19 IS ThERE InTEREST WIThIn YOuR AgEnCY In BETTER ADDRESSIng ThE ECOnOMIC vAluE OF TRAnSIT? Impact and benefit metrics (multiple responses) Yes % of Total Effect on employment (jobs) 23 82 Effect on personal income 15 54 Effect on economic activity (value added/GRP) 18 64 Effect on business sales (output) 12 43 Effect on property values and development 15 54 Economic value of societal benefit 16 57 Other (specify)* 2 7 *Other reported economic benefit measures were: (1) “avoided roadway infrastructure and operating costs” and (2) “offset capital and operating costs of new passenger facilities.” Source: Survey of agencies sponsoring transit economic impact or benefit studies. TABlE 18 WhAT MEASuRES hAvE YOu uSED In ThE PAST TO REPRESEnT ThE ECOnOMIC vAluE OF TRAnSIT SERvICES (current or proposed)?

43 of topics relating to available tools, data sources, and communication processes. The actual survey responses are repeated verbatim. Tools • “Comparatively simple tools, legitimate and accessible, that in-staff, with reasonable training/ knowledge, could administer to engage in economic impacts analysis and reporting.” • “Industry standard for modeling and analytical analyses. Funding of such an effort is the major barrier.” • “Models that predict the impacts of transit-oriented development.” • “We have measured transit economic impacts at the statewide level, primarily the federal and state funding contributions on the economy and quality of life, we are doing a study on the direct impacts of commuter rail on surround property values and have developed a tool to measure the cost/benefit of a particular system.” • “We have an economics benefit model, but have not had the staff time or resources to generate the data needed to keep the model up-to-date. The model requires transit trip purpose and that requires on-board surveys of transit riders, which is costly. The model also only uses operating expenses and the resulting benefits are so much lower than the numbers APTA releases, our results do not seem ‘positive’ in comparison.” Data • “gathering the information and collating the results takes time and resources, which tend to be in rather short supply. however, there is great interest in making an economic development case for all transportation investments.” • “The biggest barrier with the public is legitimacy of the data. What comes from us, a govern- ment entity, is, in our community, immediately suspect. Any promotion of the economic impact will need as concrete and specific measurables as possible if we want to really get any traction with the community, public, or media.” Communications • “Rigorous analysis, but also producing useful information that can be communicated in a tangible and meaningful manner.” • “Showing that the land use and environmental benefit of transit still outweighs having all bus passengers use a hybrid or all-electric car.” • “There is a critical connection between land use and transportation. It would be helpful to have the ability to use ‘what-if’ type scenarios to demonstrate how transit can be even more effective when paired with transit-supportive land uses. Additionally, while our initial experience with a triple-bottom line sustainability approach to economic analysis was not without challenges, it is something we believe is worth pursuing further.” • “Better communication of results and understanding by legislators the transit can have economic benefits.” • “getting the economic message explained to legislators.” Importance rating for each factor Very Important Somewhat Important Not Important Staff time and/or agency funding 76% 24% 0% Availability of data 56% 36% 8% Availability of analysis tools and/or methods 56% 40% 4% Staff training and/or expertise 60% 24% 16% Internal agency buy-in and/or interest 36% 32% 32% Source: Survey of agencies sponsoring transit economic impact or benefit studies. TABlE 20 WhAT IS nEEDED TO MAkE ThIS POSSIBlE (ThAT IS CuRREnTlY A BARRIER OR lIMITATIOn)? PlEASE RATE EACh ITEM ACCORDIng TO ITS IMPORTAnCE:

44 Survey of PrActice—Key oBServAtionS The survey of practitioners was relatively small because only a limited number of transit agencies and transit planners have had experience with economic impact or economic benefit studies. how- ever, among agencies that have had those studies performed, there was broad agreement that both impacts on the economy and broader societal benefits were useful, particularly to make the case for further transit funding. Most used regional economic impact models to accomplish those studies. The respondents generally believed that despite the usefulness of these studies they faced funding, staff, and data challenges that limited their ability to do more of these types of studies. The case examples reported in the next chapter are thus of particular interest, for they illustrate how economic impact and benefit studies may be successfully applied.