FY 2005 Performance Budget Justification
IV. Major Program: Appalachian Development Highway System
Congress expressly created the Appalachian Development Highway System (ADHS) to provide economic growth opportunities for the residents of the region – the same benefits afforded the rest of the nation through the construction of the Interstate Highway System, which largely bypassed the region due to its rugged terrain. Reauthorization of the program, currently referred to as SAFETEA, is pending. It is anticipated that the ADHS funding will continue at the present level.
The Appalachian Regional Development Act of 1965 authorized the Commission to construct the Appalachian Development Highway System (ADHS), a 3,025-mile road system, with assistance from the Secretary of Transportation as a highway system that supplemented the Interstate System and other Federal-aid highways programs. P.L. 108-199 added 65 miles to the system in 2004, for a new system total of 3,090 miles. Congress authorized this initiative because it recognized that Regional economic growth would not be possible until the Region's isolation had been overcome.
Because of the high cost of building roads through Appalachia's mountainous terrain, adequate roads had not been built in much of the Region. When the interstate system was built, large areas of Appalachia were simply bypassed, compounding the problems of the Region's already troubled economy. The ADHS was designed to link Appalachia with the US interstate system.
In 1998 ARC completed a study to objectively measure, in retrospect, the extent that completed portions of the ADHS had contributed to the Region's economy. The study found the ADHS has been instrumental in creating thousands of new jobs and generating economic benefits that will exceed highway construction cost and maintenance cost by more than a billion dollars. The ADHS corridors generate economic development benefits in the Region by improving the competitive position of existing and new industries through lower transportation costs and higher productivity. In addition, the new corridors will increase access to health care, education, and cultural amenities that improve the quality of life in the region they serve and will indirectly boost labor productivity.
Moreover, the corridors increase roadside business and significantly boost the opportunities for tourism development in the Region through improved access. The ADHS corridors improve travel efficiency by reducing travel time, lowering vehicle-operating costs, and reducing the number of accidents. These efficiencies are the result of:
The study determined that over the life of the ADHS, each dollar invested is expected to result in $1.32 in economic benefits and $1.18 in travel efficiency benefits.
More than 80 percent (2,440.6 miles) of the total 3,025 miles of the ADHS authorized by Congress for construction before 2004 are open to traffic, and another 130 miles are under construction. The remaining 454.5 miles are in the preliminary or final design stages. The Federal Co-Chairman of the Appalachian Regional Commission and the governors of the 13 Appalachian states continue their strong commitment to complete the ADHS, the centerpiece of ARC's strategic plan for the Region.
The Transportation Equity Act for the 21st Century (TEA-21) authorized funding from the Federal Highway Trust Fund at a level of $450 million in fiscal year (FY) 1999 through FY 2003. The authorizations and annual appropriations toward completion of the ADHS, at an average rate of $583 million a year over the past 5 years, have provided a steady, dependable, and substantial source of funding toward the completion of the Appalachian highway system.
Cost increases have occurred on individual corridors since the 1997 estimate due to inflation in the highway construction industry and design refinements and corridor location changes to accommodate changing conditions and to provide environmental mitigation. The estimated cost to complete the ADHS (combined federal and state cost in year 2000 dollars) is $8.5 billion, including $0.3 billion of approved prefinanced projects that were advanced with state funds and $0.7 billion of work that is not eligible for ADHS funding.
As shown below, the federal share of the eligible work to complete the ADHS is $6.2 billion in year 2000 dollars. The remaining federal funds needed from Congress to complete the ADHS are $4.5 billion. This is a significant reduction from the remaining needs at the time of the 1997 estimate, which was $6.2 billion.
Local Access Road Program
Section 201(a) of the ARDA authorized the construction of up to 1400 miles of local access roads (LAR) to complement the ADHS by providing new or improved access to local areas. A State may spend a portion of their ADHS funds or Area Development funds each year on access to industrial and commercial sites to create/retain jobs as well as provide access to recreational areas, educational facilities, residential areas, and timber access areas.
The ADHS program is a major factor in the Commission's success in reducing the region's isolation and providing mobility and access to its residents.
FY 2005 Initiative
During FY 2005, make progress toward completing the ADHS:
Strategies for 2005 include the following: