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.
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.
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.