Economic Impact and Policy Analysis of Four Michigan Transportation Investment Proposals

The purpose of this report is to analyze the economic impact of four possible scenarios that would increase funding for roads in Michigan by $1.4 billion per year. We explore the need for more road funding and look at the implications of different policies that would raise the necessary funds. The need for more funding for Michigan’s roads is based on an analysis of past road conditions and what future conditions would be if funding for repairs does not increase.

We analyze the net economic impact of four different scenarios for raising an additional $1.4 billion per year for road repairs, accounting for both the costs and the benefits to Michigan taxpayers of the four funding scenarios.

Overall, we find that the quality of Michigan’s roads will decline rapidly if more funding is not raised for additional repairs and maintenance. All four scenarios for increasing road funding in Michigan by $1.4 billion per year result in an increase of 11,000 or more jobs in the state. Spending an additional $1.4 billion on roads creates almost 25,000 direct and indirect jobs created by sustained road construction and maintenance expenditures. The net impact also includes approximately 14,000 lost jobs due to increased motor fuel taxes and/or vehicle registration taxes. 

Economic and Demographic Market Assessment: Forecasting University of Detroit Jesuit

 

Economic and Demographic Market Assessment: Forecasting Bloomfield Hills School District


Effect of Increased Individual Income Tax Rates on Business Owners and Their Employees

 

Grand Rapids Area Chamber of Commerce, West Michigan Regional Policy Conference: Policy Primers

Each year, the Grand Rapids Area Chamber of Commerce hosts the West Michigan Regional Policy Conference. For 2008, Anderson Economic Group was retained to prepare a set of policy briefs…

Net Costs of Michigan's 25 by 25 Ballot Proposal (Prop 3)

 

Analysis of Proposal 5: “2/3” ballot proposal and Michigan’s tax limitations

 

Review of Kentucky's Economic Development Incentives

Kentucky’s Legislative Research Commission (LRC) retained Anderson Economic Group (AEG) to study the efficiency, effectiveness, oversight, and reporting requirements of Kentucky’s economic development incentive programs. The purpose of this report was to provide in-depth information on these programs to help policymakers make informed decisions about them in the future.

This project reviewed many aspects of Kentucky’s incentive programs. Notable components include a review the purpose and main requirements of incentives, comparisons to 13 peer states chosen by the Kentucky Cabinet for Economic Development (CED), evaluation of incentive cost and effectiveness, and a review of incentive program reporting requirements and practice in Kentucky and peer states.

We estimated the number of jobs created and maintained by firms in Kentucky receiving incentives for each year between 2001 and 2010. We also estimated the cost of these incentives to the state. We completed these analyses using data provided by the CED, the Kentucky Tourism, Arts and Heritage Cabinet (TAHC), and the Department of Revenue. We were able to compare information firms reported to the CED and data maintained by the U.S. Bureau of Labor Statistics (BLS) in order to independently verify employment at firms receiving incentives.

Our analysis found the following. First, businesses that received Kentucky incentives reported creating 55,173 jobs between 2001 and 2010. This resulted in 33,000 “maintained” jobs per year. We also found no systematic over-reporting by businesses to the CED by verifying self-reported data from the businesses with BLS data. Second, the “gross cost” to the Commonwealth of Kentucky was $140 million in 2010 and averaged $3,330 per job per year between 2001 and 2010. In our effectiveness analysis, we found that approximately 35% of all jobs reported would need to have been directly caused by the incentives for the incentives to be more effective than a broad-based tax reduction. Third, we compared Kentucky to its peer states and found several areas where Kentucky lagged. Our recommendations include ways for Kentucky to improve incentive reporting and evaluation, and ways to encourage growth in knowledge-based industries.

Building a New Bridge in Detroit: A Study Evaluating the Options

The purpose of this paper is to compare the NITC and DIBC propos­als, identifying the key factors affecting policy makers, investors, and taxpayers. To date, public discourse about the options has been hampered due to lack information about the proposals, including project viability, financing, and taxpayer risk.

The Consultants at Anderson Economic Group have completed this study independently in order to provide an unbiased source of information on the topic.

Impact of Proposed “PIP Choice” Law in Michigan

Each state in the U.S. requires licensed drivers to purchase a minimum amount of auto insurance to protect themselves and other drivers in the case of an auto accident. If a driver becomes injured from an accident, they often must sue the at-fault driver’s insurance company to collect damages, which can be a lengthy and costly process. In no-fault states, such as Michigan, the right to sue other drivers is limited because the injured party’s own insurance company pays for damages. No-fault states require drivers to purchase a minimum amount of personal injury protection (PIP), which covers medical expenses and lost wages resulting from an auto accident.

Each state varies in the amount of PIP coverage they require drivers to purchase, ranging from $3,000 to over $50,000. However, if a driver incurs costs beyond the amount of coverage purchased, he or she must pay out-of-pocket for these additional expenses. Currently, Michigan is the only state that requires each driver to purchase lifetime PIP coverage, which provides benefits to pay for reasonable and necessary treatments related to an auto accident. This report discusses how proposed legislation to change the minimum amount of coverage required by each driver would impact Michigan.