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Public Transportation Program impacts

Public Transportation Program impacts

The economic benefits of the FY 2025 – FY 2029 Passenger Transportation Program have been evaluated using the Transportation Economic Development Impact System (TREDIS). TREDIS is specifically designed for transportation-related economic analysis, making it uniquely suited to assessing the impacts of projects like the Passenger Transportation Program.

The TREDIS model considers the broad economic landscape but places particular emphasis on factors critical to transportation projects. Its assessments, in this case, are based on employment projections from the U.S. Bureau of Labor Statistics (BLS) and economic outlook data for the U.S. and Michigan sourced from the Research Seminar in Quantitative Economics (RSQE) at the University of Michigan.

The TREDIS Transit System Value Tool allows MDOT and Michigan transit agencies to conduct an economic benefit analysis (EBA) of the impact of Michigan transit agencies on their local communities, in a specified region, or in the state. The Transit System Value Tool leverages Michigan transit agencies’ operational and capital spending data from PTMS (Public Transportation Management System), as well as data related to safety, transit modes, alternative modes, and transit emissions, gathered from MDOT’s 2022 Ridership Survey and factor research.

The Economic Benefit Analysis (EBA) for the Passenger Transportation Program assesses the benefits derived from public transportation investments by evaluating their role in maintaining and improving the transportation network, thus functioning as economic catalysts for job creation and business development statewide. These investments are crucial for enhancing the quality, reliability, and accessibility of public transportation systems, ultimately promoting economic growth, and reducing traffic congestion. Additionally, the investment stimulates economic activity among local suppliers and businesses where transit workers contribute their income.

The table and chart below showcase the economic benefits of a $5.2 billion investment in the Passenger Transportation Program as part of the FY 2025 – FY 2029 Five-Year Transportation Program. This includes federal, state, and local operating revenues, as well as federal and state capital invested in Intercity Bus Services, Local Bus Operations, and capital costs covered through apportionments to urban areas from FTA, such as the Urbanized Area Formula Funding program (49 U.S.C. 5307). The Passenger Transportation Program is projected to support an average of 11,203 jobs annually, including both new jobs resulting from increased economic competitiveness and jobs retained that would have been lost without this transportation investment. Furthermore, annually the program is expected contribute approximately $876 million in gross regional product, $708 million in labor income, and support approximately $1.8 billion in output/sales from Michigan businesses over the five-year period as depicted in the table and accompanying chart.

Download the list of definitions that correspond to the EBA.

Local transit

The table and chart below showcase the economic benefits of a $5.2 billion investment in the Passenger Transportation Program as part of the FY 2025 – FY 2029 Five-Year Transportation Program. This includes federal, state, and local operating revenues, as well as federal and state capital invested in Intercity Bus Services, Local Bus Operations, and capital costs covered through apportionments to urban areas from FTA, such as the Urbanized Area Formula Funding program (49 U.S.C. 5307). The Passenger Transportation Program is projected to support an average of 11,203 jobs annually, including both new jobs resulting from increased economic competitiveness and jobs retained that would have been lost without this transportation investment. Furthermore, annually the program is expected contribute approximately $876 million in gross regional product, $708 million in labor income, and support approximately $1.8 billion in output/sales from Michigan businesses over the five-year period as depicted in the table and accompanying chart.

 

Economic benefits of FY 2025-2029 Five-Year Public Transportation Program

2024

2025

2026

2027

2028

Total

Annual average

Investment

$999

$1,019

$1,039

$1,060

$1,081

$5,198

$1,040

Employment impact (jobs)

10,778

10,990

11,203

11,415

11,627

56,013*

11,203

Gross regional product

$843

$859

$876

$892

$909

$4,379

$876

Labor income**

$681

$695

$708

$721

$735

$3,540

$708

Business output/sales***

$1,721

$1,754

$1,788

$1,822

$1,856

$8,941

$1788

*Total employment impact refers to cumulative job-years supported by FY 2025-2029 Transit Program
**Labor income is comprised of the sum of salaries, wages, proprietors’ income, and employer-paid benefits.
***Business output/sales is final sales, or total revenues, by industry. Depending on the industry, sales can be to any combination of other businesses, households, or the federal/state/local government, as defined by TREDIS.

 

Chart showing the economic benefit of the planned $1.74 billion investment for passenger transit program in the FY 2023–2027 5YTP.

Societal benefits of FY 2025-2029 Public Transit Program

The Michigan Passenger Transportation Program provides intangible societal benefits, besides transportation. Among these are avoided medical costs and public assistance expenditures by allowing for greater accessibility to essential destinations and services, travel time and vehicle operation savings by offering an alternative mode of transportation, and the empowerment of individuals by affording them greater mobility independence. The tables below showcase these societal benefits that are deeply integrated into daily life. They highlight how the program significantly contributes to the well-being and advancement of Michigan's residents and visitors.

Transit program annual statewide societal savings

Line haul

Demand response

Total savings

Travel time savings *

$101,142,971

$1,557,495

$102,700,466

Vehicle operating cost savings *

$29,719,878

$5,152,985

$34,827,863

Avoided public assistance expenditures *

$50,623,236

$13,976,258

$64,599,494

Avoided medical costs *

$456,805,651

$216,301,271

$673,106,922

Statewide societal benefits

Line haul

Demand response

Enabled work trips

1,677,377

463,097

Enabled medical trips

1,144,876

542,108

Enabled school trips

499,219

48,285

Enabled shopping trips

1,690,689

618,925

Enabled social trips

1,071,657

265,567

Other enabled trips

572,438

256,788

Total enabled trips*

6,656,256

2,194,770

*Outputs based on 2025 Transit Operating and Capital Dollars.


Descriptions of the societal benefits in the tables are:

Transit modes

  • Line haul: A service with a fixed schedule that goes to designated stops along a route.
  • Demand response: Non-fixed route system of transporting individuals that requires advanced scheduling by the customer, including services provided by public entities, nonprofits, and private providers.

Transportation system user benefits

The first set of outcomes considered are those that affect users of the transportation system, including both transit riders themselves and those that they may have no choice but to rely on in the absence of transit. Benefit categories include:

  • Travel time savings: Calculated by finding the value of travel time (value of in-vehicle travel time plus out-of-vehicle travel time) for total trips for each transit mode, and the value of time for all non-transit trips that a passenger may take in the absence of transit.
  • Vehicle operating cost savings: Fuel, maintenance, and other operating cost of miles avoided on other modes.

Enabled trips

Public transit enables some users to take trips that they otherwise wouldn't be able to, allowing them to travel to work and maintain employment, thereby avoiding the need for other forms of government assistance.

Value of enabled trips

 This component of benefits considered is the value of providing affordable and accessible transportation options to riders that otherwise may not be able to meet their travel needs to reach essential destinations and services. This analysis calculates the value to society as follows:

  • Avoided public assistance expenditures: Enabling commuting trips is valued based on estimated reductions in spending through the Temporary Assistance for Needy Families (TANF) program and the Supplemental Nutrition Assistance Program (SNAP).
  • Avoided medical costs: Missed health care trips can mean that people with chronic conditions such as chronic obstructive pulmonary disease (COPD), diabetes, asthma, and others, are faced with poorly rather than well-managed health care. This may result in a greater chance of acute episodes (like an asthma attack or heart attack), hospitalization, and degraded quality of life. Enabled medical trips are valued based on cost differences in health care and valuation of impacts on quality of life.

Rail

Michigan’s rail system has approximately 3,600 miles of track operated by 29 railroads and carries nearly 17 percent of the state’s freight tonnage. Rail service is particularly important for the movement of heavy or bulky materials, as well as hazardous materials. The system also accommodates passenger rail service.

As funding permits, MDOT works with the Michigan Economic Development Corp. (MEDC), as well as the Michigan Department of Agriculture and Rural Development (MDARD), to provide support to the state’s businesses that need rail, most directly through the preservation of the freight-rail corridors owned by the state and by helping provide access to the system through the Freight Economic Development Program.

Aeronautics Program impacts

Access to convenient and efficient air travel is essential to maintaining a competitive advantage in a global economic environment. While commercial airline services are often the most recognizable facet of aviation, general aviation accounts for 97 percent of the nation’s airports. These airports support a variety of aviation activities, employing thousands of people and creating millions of dollars in economic impacts. Businesses through the state depend on airports for the movement of goods and personnel. Benefits associated with airports include direct and indirect jobs, wages, and expenditures, as well as the economic ripple effects in the community, enhancing economic activities far from the airport itself. In a state like Michigan, airports serve a vital role in supporting rural communities, particularly in the Upper Peninsula.