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Virginia Transportation Investment Pays-Off Big, New Study Finds


Highway and bridge construction investment by local governments and the Virginia Department of Transportation (VDOT) is a key part of the Virginia economy, supporting $4.6 billion in state economic output, $2.4 billion in Gross State Product (GSP) and 36,390 jobs, a new study finds.

Authored by Dr. Alison Premo Black, chief economist for the American Road & Transportation Builders Association, the study examined the flow of Virginia’s $2 billion in annual highway and bridge construction work by state and local governments, showing that it more than doubled economic activity, providing $4.6 billion in output across the Commonwealth in industries like manufacturing, mining, retail and research.

“There is a unique and synergistic nature to transportation capital investments, that triggers significant immediate economic activity and creates and sustains jobs and tax revenues,” said Jeff Southard, executive vice president of the Virginia Transportation Construction Alliance, which worked to build support for the state’s sweeping 2013 transportation funding law.

“There was lots of debate over what impact the new revenue and investment would have,” explained Southard. “This study shows that not only is the impact huge, but that it touches every sector and region of Virginia’s economy.”
According to Black’s study, $2 billion in transportation infrastructure investment contributes $2.4 billion in value added to Virginia’s GSP and supports 36,390 full-time jobs, with a total annual payroll of $1.4 billion. These jobs are throughout all sectors of the economy, including 3,836 jobs in retail trade and 2,102 jobs in manufacturing, generating and sustaining over $263 million in government revenues.

Many of the revenues generated from federal, state, county and local taxes will be invested back into Virginia. Estimates for government revenues include: $112.2 million in federal ($104.9 million) and state ($7.3 million) payroll taxes; $120.1 million in state income taxes; $29.2 million in state and local sales taxes; and $2.0 million in city and county sales taxes.

The study was based on conservative models, and did not take into account investments made via public-private partnerships (P3s) in Northern Virginia and the Hamptons Roads region, which add additional economic output. As the regional money (about $450 million a year) form the newly-passed transportation funding law “kicks in” and the transportation funding leveraged through bonding and P3 projects is realized, we could easily see the total dollars for transportation investment grow to over $3 billion a year.

“Transportation investment has a multiplier effect,” Southard concluded. “It’s an investment that yields long-lived capital assets and facilitates economic activity for many decades to come.”