Connecticut’s congested transportation network does more than try motorists’ patience: It costs businesses and residents at least $670 million a year in lower productivity, higher operating expenses, weakened worker recruitment efforts and other problems associated with clogged highways and limited alternatives, according to a new draft report.
The position paper, one of several that ultimately will comprise the state’s Transportation Strategy Board’s 2011 plan update, says lower productivity, higher operating expenses, weakened worker recruitment efforts and other problems associated with clogged highways and limited alternatives contribute to the rising price tag.
And though the problem is worst in the Stamford-to-Bridgeport corridor in Connecticut’s southwestern corridor, major congestion costs also plague the Hartford and New Haven areas, leaving the state at an increasing business disadvantage.
The report’s findings are bolstered by a new national study that ranks Connecticut among the worst states for urban highway congestion.
“The impact is enormous and undoubtedly affects business growth in the state,” reads the report, prepared by board staff, adding that congestion in Fairfield County “threatens to choke off economic growth throughout the state.”
Businesses report that the $670 million cost projection is tied to a wide array of problems.
Not surprisingly delivery costs, both for goods coming into Connecticut companies and for those being shipped elsewhere, continue to rise. The report estimates more than 32 million hours of shipping delays affect state businesses each year.
Inventory costs increase as deliveries become less reliable and more products must be stored on site. In some cases, companies increased fleet sizes to compensate for the reduced number of trips each vehicle can make through Connecticut on a daily basis.
Because traffic congestion, particularly along Interstate 95 and the Merritt Parkway in the southwest corner “is pervasive and affects much of the corridor over an extended period of the day,” some deliveries have to be carefully planned and attempted during a limited time frame.
The report, which calculated congestion costs using a methodology developed in 2009 by the Texas A&M University, estimated $350 million of the annual expense is tied to southwestern Connecticut, with $203 million connected to the Greater Hartford area and $117 million centered on New Haven.
“Everybody will tell you that if they can’t get their products where they need to go in a timely fashion, they lose money,” said former Monroe First Selectwoman Karen Burnaska, a member of the Transportation Strategy Board. “It’s a bleak picture.”
“The efficiency of highways is critical to business,” said, Donald J. Shubert, spokesman for spokesman for Keep CT Moving, a transportation advocacy coalition composed of construction labor and business groups, adding about three-quarters of the goods imported and exported from the state move by truck. “Mobility is everything.”
But the costs of congestion stretch well beyond shipping-related expenses.
Employee recruiting is hampered by Connecticut’s bumper-to-bumper traffic. “The extent and duration of such severe congestion makes it very difficult for commuters to reach jobs,” the report states, adding that “businesses might need to offer higher wage rates to attract employees.”
Other congestion-related factors that eat away at a company’s bottom line, the report adds, include employees arriving late and extra time needed for travel to business meetings.
Congestion particularly hinders the hiring of executives and other high-level workers, though recruitment problems are limited to the top echelon of employees, said Eric Brown, associate counsel for the Connecticut Business and Industry Association.
“Having employees – not just the product you’re trying to put out or pull in – stuck in traffic is a serious concern,” Brown said, adding this is a common complaint among Fairfield County firms. “We’re setting ourselves up as a state to be cut off from major economic corridors.”
Though complaints about Connecticut’s transportation network have persisted for decades, concerns about the cost are relatively new.
From 1985 through 1991 the projected congestion cost ranged between just under $100 million to about $150 million, the report states.
By 1995 the cost had cleared $200 million and began a series of sharp increases. Between 2000 and 2007 – the last year of data used to calculate costs in this report, the price jumped 60 percent, from about $420 million to $670 million.
And the study also warns that this last number is “a very conservative estimate” that could be adjusted upward for several reasons:
Smaller urban areas, including those surrounding Danbury, Waterbury and New London, were not analyzed.
It relies on national averages regarding compensation, and therefore does not reflect the generally higher wages paid here to offset a higher cost of living.
“Unfortunately, none of this is too surprising,” said Rep. Tony Guerrera, D-Rocky Hill, co-chairman of the legislature’s Transportation Committee. “When transportation stops you are going to kill business, and we still haven’t found a way to fix the problem.”
Guerrera says the legislature and Gov. M. Jodi Rell have taken steps to ease the congestion, but he concedes that the problem has grown for decades and that countermeasures were undermined somewhat.
Rell and the legislature dedicated $2.3 billion in total state funds, primarily financed with bonding, in 2005 and 2006, for transportation initiatives. That represented the largest transportation investment in two decades, but only about one-quarter of the level recommended by the strategy board.
Further complicating matters, state government is hard pressed to cover the debt service on its transportation program, let alone add new projects. That’s because despite increasing the state’s wholesale fuel tax from 5 to 7.5 percent between July 2005 and July 2007, Rell and lawmakers have spent nearly 60 percent of the roughly $1.5 billion collected from that tax since 2005-06 on non-transportation programs, according to budget records.
The strategy board drafted a report in late July warning that Connecticut will face annual gaps of $300 million to $500 million through 2014 between the cost of maintaining its transportation network, and its likely available funding.
And if Connecticut wants not only to maintain its transportation network, but improve it, the annual gap moves closer to $1 billion.