How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses. Acknowledgements

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2 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses Acknowledgements The NATSO Foundation, a charitable 501(c)(3) organization, is the research and educational affiliate of NATSO, a 501(c)(6) trade association representing the travel plaza and truckstop industry. The NATSO Foundation commissioned researchers from the Logistics and Transportation Group within the Robert H. Smith School of Business at the University of Maryland to measure the current level of economic activity of the highway service industry located at interchanges along the Interstate Highway System (IHS) and to estimate what the level of economic activity would be in the year The study team also estimated the impact of commercialization of the IHS on the highway service establishments located at interchanges along the system. The principal researchers from this group are Professor Thomas M. Corsi, Professor Robert J. Windle, and Garrick B. Infanger. i The NATSO Foundation

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4 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses Table of Contents Acknowledgements i Executive Summary I. Introduction and Background Current and Projected Economic Activity Effects of Commercialization II. Combined Highway Service Industries Projected Economic Activity for the Year III. Truck Facilities Truck Stops/Truck Repair Centers Truck Fuel Stops Total Truck Service Activity Projected Truck Service Activity in the Year IV. Gasoline Stations Projected Gasoline Station Activity in the Year V. Food Facilities Projected Food Facility Activity in the Year VI. Lodging Facilities Projected Lodging Facility Activity in the Year VII. Impact of Rest Area Commercialization Appendix A - Survey to Determine the Extent of Economic Activity at Interstate Highway Interchanges Appendix B - Regression Results Appendix C - State Tables of Services and Economic Activity for References The NATSO Foundation

5 Fueling American Prosperity List of Tables Table 1 Total Economic Activity at Interstate Highway Interchanges Actual 2002 and Forecasted Table 2 Typical Truck Stop/Truck Repair Data Table 3 Truck Stop Aggregate Data Table 4 Typical Truck Fuel Stop Data Table 5 Truck Fuel Stop Aggregate Data Table 6 Truck Service Activity Aggregate Data Table 7 Typical Gasoline Station Data Table 8 Gasoline Station Aggregate Data Table 9 Typical Food Establishment Data Table 10 Food Establishment Aggregate Data Table 11 Typical Hotel/Motel Data Table 12 Hotel/Motel Aggregate Data Table 13 Impact of Commercialization on Counties with Rest Stops Table B1 Variable Means Table B2 Regression Results The NATSO Foundation 2

6 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses Executive Summary This study examines how highways in particular the Interstate Highway System (IHS) have spurred the growth of interchange businesses that serve highway travelers, and how rest area commercialization severely stifles business development at the interchanges. Current and Projected Economic Value of Interchange Businesses Interchange businesses contribute billions of dollars to the United States economy in terms of sales; employee wages; tax revenues to states, counties and municipalities; and goods purchased. Unimpeded by rest area commercialization, each of these contributions is expected to grow through Sales Today: Nationwide, the highway service facilities at IHS interchanges accounted for $171 billion in annual sales in Projected: Highway service facilities at interchanges along the IHS are projected to generate $196 billion in sales in the year 2010-an increase of $25 billion between 2002 and Employment Today: The highway service industry employed between 1.6 and 1.9 million full- and part-time workers in These workers earned $30 billion in wages. In turn, for every dollar earned by these workers, an additional $1.16 was spent due to the multiplier effect. Thus, the total wage effect from highway service industry employment was $65 billion in More than 76,000 businesses, employing as many as 2 million people, serve highway travelers at Interstate interchanges. Projected: Total employment (full- and part-time) at highway service facilities is projected to grow to 2.2 million by the 2010, an increase of 20 percent. Total compensation for these workers will equal $34 billion. Using a standard multiplier, the total economic impact of this compensation will be $73 billion. Tax Collection and Payment Today: In 2002, highway service facilities collected $10.6 billion in state fuel taxes, $3.9 billion in state and local lodging taxes, and $1.5 billion in property taxes. Projected: Highway service facilities will collect a total of $12.1 billion in state fuel taxes, $4.5 billion in state and local lodging taxes, and $1.8 billion in property taxes in The NATSO Foundation

7 Fueling American Prosperity Cost of Goods Sold Today: In 2002, the highway service facilities purchased $93 billion in goods and services. Projected: The highway service facilities are projected to purchase $106 billion in goods and services in the year The Effects of Rest Area Commercialization on Interchange Business Sales Effects of Rest Area Commercialization Although Congress specifically prohibited commercial services on the Interstate right-of-way, it permitted commercial services to be offered in rest areas constructed by January 1, These businesses, located directly on the Interstate right-of-way, achieve significant market dominance because of their location. This study estimates the adverse effects of rest area commercialization on interchange business activity and development. On average, for the 66 counties that currently have commercialized Interstate facilities, the interchange exits in that county have experienced: A loss of $22.5 million, or 56 percent, in food establishment annual sales per county, which is equivalent to eliminating 26 fast food establishments in each county A loss of $17.2 million, or 51 percent, in gasoline station annual sales per county, which is equivalent to eliminating 7 gasoline stations in each county; and $196 billion $98 billion Projected Interchange Business Sales, Year 2010, if federal ban on rest area commercialization continues. Projected Interchange Business Sales, Year 2010, if rest area commercialization is permitted. Interchange businesses with an estimated $171 billion in sales in 2002, with projected sales of $196 billion in 2010, would see sales slashed by 50 percent if rest area commercialization were permitted throughout the Interstate Highway System. A loss of $16.1 million, or 46 percent reduction in truck service facilities annual sales per county, which is equivalent to eliminating two truck fuel stops in each county. In all cases, along with the reduction in sales, there is a corresponding reduction in employees and tax receipts. The NATSO Foundation 4

8 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses Methodology When attempting to measure the economic effects of highway investment, researchers have traditionally counted the number of construction jobs created or calculated productivity increases attributable to new roads and bridges. This study attempts to calculate the economic contributions of the highway service industry, which has flourished because of a healthy highway system and a competitive environment. For the purposes of this project, the highway service industry is defined as services located at interchanges along the nation s IHS. The service concerns in this study include the following categories of establishments: truck stops/truck repair centers, truck fuel stops, gasoline stations, food establishments, and hotels/motels. The estimation of current economic activity at the Interstate highway exchanges requires information on the number of establishments at each interchange and the extent of economic activity at each establishment. The number of establishments that are domiciled within 1,320 feet (1/4 mile) of an interchange exit are collected by Zenrin USA and compiled into the Interstate Freeway Exit Business and Service database. While this information is compiled annually, this study relied on the 2002 database. In addition to the number of establishments, this data also included information on the services available at the interchanges. There are 50 percent fewer food, gasoline and truck service facilities in the 66 counties that currently have commercialized rest areas, compared with counties without commercialization. The data set included information on all IHS interchanges. These interchanges were located in 1,270 different counties over 46,677 miles of the Interstate Highway System. The services at these interchanges included 41,316 restaurants, 14,469 gas stations, 14,487 hotels/motels, 2,806 truck fuel stops, 2,541 facilities that provided truck service, and 1,268 truck stops. 5 The NATSO Foundation

9 Fueling American Prosperity I. Introduction and Background When attempting to measure the economic effects of highway investment, researchers have typically counted the number of construction jobs created or calculated productivity increases attributable to new roads and bridges. This study examines how highways, in particular the Interstate Highway System, have spurred the growth of interchange businesses that serve highway travelers. For the purposes of this project, the highway service industry is defined as services located at interchanges along the nation s Interstate Highway System (IHS). The service concerns in this study include the following categories of establishments: truck stops/truck repair centers, truck fuel stops, gasoline stations, food establishments, and hotels/motels. There are obviously other highway service ventures, dependent upon the Interstate Highway System for their location, that do not fall within this restrictive definition of a highway service facility. For example, heavy truck and trailer maintenance and sales facilities, major retail centers, and outlet malls are all establishments that benefit from exposure to the Interstate Highway System, but do not fall within the restrictive definition of a highway service facility stated above. These types of facilities are intentionally excluded from the current study since they are primarily destinations of highway travel, while the fuel, truck stop, food, and lodging establishments are facilities necessary to support highway travel. Objectives This study will accomplish the following specific objectives: First, it will measure the economic impact of the fuel service, travel plaza, food, and lodging industries whose facilities are domiciled within 1,320 feet of an exit on the Interstate Highway System. Second, the study will forecast the economic impact of these highway service industries in the year The third objective is to estimate the economic impact of commercialization of the Interstate Highway System on the highway service establishments located at interchanges along the system. Regarding this final objective, proposals to allow commercial services on the Interstate Highway System right-of-way are under consideration as part of the 2003 highway reauthorization legislation. The current Transportation Equity Act for the 21st Century expires on September 30, 2003, and will be renewed by Congress through multi-year reauthorization legislation. Commercialization proposals would allow states to sell food, fuel, and other highway-related services along the right-of-way of the Interstate Highway System. This study will provide specific estimates of the impact that such potential commercialization would have on the existing highway service establishments located off the Interstate Highway System right-of-way at interchange locations. The NATSO Foundation 6

10 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses Current and Projected Economic Activity The estimation of current economic activity at the Interstate highway exchanges requires information on the number of establishments at each interchange and the extent of economic activity at each establishment. The number of establishments that are domiciled within 1,320 feet (1/4 mile) of an interchange exit are collected by Zenrin USA and compiled into the Interstate Freeway Exit Business and Service database. While this information is compiled annually, this study relied on the 2002 database. In addition to the number of establishments, this data also included information on the services available at the interchanges. The data set included information on all IHS interchanges. These interchanges were located in 1,270 different counties over 46,677 miles of the Interstate Highway System. The services at these interchanges included 41,316 restaurants, 14,469 gas stations, 14,487 hotels/motels, 2,806 truck fuel stops, 2,541 facilities that provided truck service, and 1,268 truck stops. Estimates of the current level of economic activity require information on the number of establishments at the interchanges as well as information on the amount of economic activity at each establishment. It is clearly not possible to collect information on the economic activity at each establishment. This study constructs a typical establishment for each of six categories. These six major categories include truck stops, truck fuel stops, truck repair services, gasoline station facilities, food facilities, and lodging facilities. Establishments can provide multiple services. For instance, a truck stop facility could provide fuel, food, truck repair services and a convenience store. The typical facility will Services at interchanges include 41,316 restaurants, 14,469 gas stations, 14,487 hotels/motels, 2,806 truck fuel stops, 2,541 truck service facilities and 1,268 truck stops. have estimates of economic activity in each of the possible service categories. In compiling overall economic activity, however, only those service categories available at an establishment will be included. For instance, truck repair services are only available at some truck stops. The economic activity at a typical truck stop due to repair services will only be counted if that particular truck stop has truck repair services. Food services are only available at some truck fuel stops and some gas stations. The economic activity at a typical truck fuel stop or a typical gas station from food sales will only be counted if that particular truck fuel stop or gas station has a restaurant. Under the food facility categories, three typical facilities were constructed to differentiate restaurants on the basis of their size. Under the lodging category, two typical facilities were constructed to differentiate between hotels/motels with a restaurant and those without a restaurant. The typical facilities were constructed through interviews and surveys from a variety of sources. These are documented below for each of the six categories of establishments. Total economic activity in each of these categories is then computed as the typical establish- 7 The NATSO Foundation

11 Fueling American Prosperity ment times the total number of establishments nationwide. Totals can be computed on a less aggregated basis as well (such as state level totals - see Appendix C). For purposes of discussion the truck stops, truck fuel stops, and truck repair services are discussed under the single heading of truck facilities below. To the extent that part-time employees are present in this industry, total employment will be higher than the full-time equivalent number of employees. Based on figures from the 2001 National Income and Product Accounts for the retail trade industry, the ratio of full and part-time employees to full-time equivalent employees is 1.2. In assessing the full impact of employee compensation, an earnings multiplier was applied to total compensation. The Economics and Statistics Administration within the Bureau of Economic Analysis publishes earnings multipliers by state for workers in two categories closely related to the highway service industry (i.e., for workers in hotel and lodging and eating and drinking establishments). From this data and based on the distribution of highway service industry jobs among the states, the weighted earnings multiplier used throughout this study equals This suggests that $1 in earnings generates a total impact of $2.16 with the application of the earnings multiplier. Effects of Commercialization Regarding the final study objective, current law (U.S. Code 23, Section 111) does not allow facilities on the IHS rights-of-way to offer commercial services. Because of this ban, most rest areas offer only picnic areas, restrooms, and vending machines. Only those highways that pre-date the IHS and were converted to IHS routes provide exceptions to this general prohibition. Congress permitted any Current law does not permit rest area commercialization for facilities built after January 1, Because of this ban, most rest areas only offer picnic areas, restrooms and vending machines. facilities constructed on these highways by 1960 to continue offering commercial goods and services. As Congress reauthorizes the highway program this year, proposals to allow commercialization on the entire IHS are being considered. This study provides insight regarding the potential impact that such commercialization would have on the highway service industry by specifically examining how existing commercialized facilities have stunted economic growth at interchanges. The econometric model included in this report estimates the effects of those right-of-way facilities on both the level of economic activity at interchange locations and business development. The NATSO Foundation 8

12 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses II. Combined Highway Service Industries Table 1 aggregates all estimates from the separate categories of truck activity, gasoline stations, food facilities, and hotels/motels into an overall summary of 2002 economic activity. This overall table illustrates the full impact of highway service establishments located at IHS interchanges. In total, these facilities accounted for $171 billion in annual sales and approximately 1.6 million full time equivalent employees or 2 million full and part-time employees. Employee compensation totaled $30 billion and using the earnings multiplier, this translates to a total impact of $65 billion. In addition, the highway service facilities Highway service businesses paid $10.6 billion in state fuel taxes, $1.5 billion in property taxes, $3.6 billion in state sales taxes and $3.9 billion in state and local lodging taxes in paid $10.6 billion in state fuel taxes, $1.5 billion in property taxes, $3.6 billion in state sales taxes, and $3.9 billion in state and local lodging taxes. Finally, the highway service facilities purchased $93 billion in goods and services on an annual basis. Projected Economic Activity for the Year 2010 In 2010, the total set of highway-service facilities at interchanges along the IHS are projected to generate $196 billion on an annual basis-an increase of $25 billion between 2002 and 2010 (Table 1). All individual categories of sales increase between 2002 and 2010, with diesel sales increasing from $41.2 to $45.2 billion, while gasoline sales increase from $29.5 to 34.1 billion. Total full-time equivalent employment will increase from 1.6 million to 1.8 million between 2002 and This is equivalent to 2.2 million full and part-time employees in In total, the highway service facilities at IHS interchange locations are projected to purchase $106 billion in goods and service in In addition, these facilities are projected to collect $12.1 billion in state fuel taxes, $1.8 billion in property taxes, $4.2 billion in state sales taxes and $4.5 billion in state and local lodging taxes. 9 The NATSO Foundation

13 Fueling American Prosperity III. Truck Facilities This section is divided into three parts based primarily on data collection considerations. First, there is a discussion of data from truck stops/truck repair centers. Second, there is a presentation of information from truck fuel stops. The distinction between truck stops/truck repair centers and truck fuel stops is based on size. For the purposes of this study, the truck stops/truck repair centers have total annual sales of more than 8.5 million diesel gallons. Truck fuel stops have total annual sales that equal or are less than 8.5 million diesel gallons. The final part of this section combines information from the first two sub-sections into an overall truck activity category. Truck Stops/Truck Repair Centers The study team received data on truck stop/truck repair economic activity from representatives of NATSO member companies. Companies responded to a survey form designed to collect information on sales, number of employees, employee compensation, taxes, and cost of goods sold for the different areas of their business (i.e., gasoline and diesel sales, convenience store sales, restaurant sales, other sales, and truck repair activity). A copy of the survey form is included in Appendix A. In total, we received data on 245 truck stops and 35 truck repair centers. From these reports, we compiled a profile of a typical truck stop/truck repair center at interchanges along the Interstate Highway System. Table 2 shows that the typical truck stop/truck repair center sells 1.7 million gallons of gasoline on an annual basis and 12.4 million gallons of diesel fuel. Typically, these truck stops accumulate $2.7 million in annual convenience store sales; $1.6 million in restaurant sales; and $470,000 in other sales (including such items as vending machines, phone services, etc.). Total employment in the fuel service, restaurant, and convenience stores is 73 full-time equivalent employees or 88 full and part-time employees with an annual payroll of $1.3 million. The cost of goods sold for truck stops varies by activity, ranging from a high of 93.9 percent for fuel sales to a low of 29.7 percent for restaurant sales. The typical truck stop sells 1.7 million gallons of gasoline and 12.4 million gallons of diesel fuel each year. In addition to the fuel, restaurant, and convenience store activities, the typical truck stop generates about $2 million in annual revenues from truck repair activities. In all, there are 11 full-time equivalent or 13 full and part-time employees engaged in this activity. The cost of goods sold for truck repair is 39.6 percent. Table 3 provides the estimated 2002 activity at full service truck stops nationwide derived from a multiplication of the typical full service truck stop s annual revenue and the total number of such facilities at interchange locations along the IHS based on Zenrin s Interstate Freeway Exit and Business Service database. As shown, these facilities generated an estimated $29.4 billion in annual sales, with $20.6 billion resulting from diesel fuel sales. In addition to diesel fuel sales, convenience store sales accounted for $3.4 billion in revenues and restaurant sales The NATSO Foundation 10

14 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses resulted in $2.0 billion in additional annual sales. Overall, the full service truck stops employed 92,600 full-time equivalent employees or 111,100 full and part-time employees who earned $1.6 billion in total compensation. Using the earnings multiplier, this translates to a total impact of $3.6 billion. The full service truck stops made substantial tax contributions as well. In terms of total state fuel taxes, the contribution equaled $4.8 billion annually with an additional $315 million in state sales taxes and $75 million in property taxes. The full service truck stops bought $24.9 billion in goods and services to support their activities. Full-service truck stops contributed $4.8 billion in state fuel taxes, $315 million in state sales taxes and $75 million in property taxes. Table 3 provides 2002 annual data on truck repair activity. In total, truck repairs at IHS interchange locations account for $5.1 billion in annual sales. Approximately 28,000 full time equivalent employees or 33,600 full and part-time employees are responsible for generating this revenue. Their total annual compensation is $498 million. Truck repair facilities pay about $271 million in annual sales taxes and purchase $2 billion in goods and services. Truck Fuel Stops The study team received cooperation from members of the Society of Independent Gasoline Marketing Association (SIGMA) in developing a profile of the typical truck fuel stop at interchanges along the Interstate Highway System. Each of these companies responded to a survey form designed to collect information on sales, number of employees, employee compensation, taxes, and cost of goods sold for the different areas of their business (i.e., gasoline and diesel sales, convenience store sales, and other sales ). The truck fuel stop is distinguished from the truck stop/truck repair center by its annual diesel volume as discussed in the previous section. In the past truck fuel stops had been distinguished from truck stops/truck repair centers on the basis of differences in range of services offered. This distinction seems to be fading somewhat as truck fuel stops have been adding additional services. As a consequence, for the purposes of this study, we decided to differentiate between truck fuel stops and truck stops/truck repair centers on the basis of diesel volume alone, with the truck stops/truck repair centers being larger than the truck fuel stops. Truck fuel stops were distinguished from gasoline stations by diesel sales as a portion of total fuel sales. If diesel sales accounted for 25 percent or more of total fuel sold, then the facilities were classified as truck fuel stops. The typical truck fuel stop with food sells 1.4 million gallons of gasoline and 5.9 million gallons of diesel fuel each year. Table 4 profiles two types of typical truck fuel stops based on data averaged from 199 establishments as submitted by SIGMA members: one with food services available and one without. On average, the typical truck fuel stop with food sells 1.4 million gallons of gasoline and 5.9 million gallons of diesel fuel on an annual basis. Convenience store and other revenues 11 The NATSO Foundation

15 Fueling American Prosperity on an annual basis are $1.8 million and $270,000 respectively. Restaurant sales total $800,000 annually. Total employment at a typical truck fuel stop with food is 50 full-time equivalent employees or 60 full and part-time employees who earn a total of $860,000 on an annual basis. Table 4 also profiles a typical truck fuel stop without food based on data averaged from surveys submitted by SIGMA members. On average, the typical truck fuel stop without food services sells 1.3 million gallons of gasoline and 3.5 million gallons of diesel fuel on an annual basis. Convenience store and other revenues on an annual basis are $1.4 million and $160,000, respectively. Total employment at a typical truck fuel stop without food services is 15 full-time equivalent employees or 18 full and part-time who earn a total of $285,000 on an annual basis. In 2002, truck activity generated $60.2 billion in sales. Table 5 provides 2002 annual data on the economic activity of all truck fuel stops nationwide estimated from the multiplication of a typical truck fuel stop s annual sales and the number of such facilities located nationwide at IHS interchange locations based on Zenrin s Interstate Freeway Exist Business and Service database. There were 847 truck fuel stops with food services and 1,959 truck fuel stops without food services. In total these truck fuel stops generated $25.7 billion in annual 2002 sales. Of this total, $15.5 billion resulted from diesel sales and an additional $4.8 billion from gasoline sales. The nation s truck fuel stops accounted for $4.3 billion in convenience store sales and $680 million in restaurant sales. In total, the nation s truck fuel facilities at IHS interchanges employed 71,700 full-time equivalent employees or 86,000 full and part-time employees who earned $1.3 billion in annual wages. Using the earnings multiplier, this translates to a total impact of $2.8 billion. The truck fuel stops paid $3.0 billion in state fuel taxes and $285 million in sales taxes with an additional $64 million in property taxes. The truck fuel stops purchased $21.9 billion in goods and services during Total Truck Service Activity Table 6 combines the separate data on full service truck stops/truck repair centers and on truck fuel stops into an overall total truck activity table. In total, truck activity at IHS interchange locations generated $60.2 billion in annual 2002 sales. Of this total, $36 billion resulted from diesel sales and an additional $7.6 billion from gasoline sales. Convenience store sales accounted for $7.7 billion, with restaurant sales generating an additional $2.7 billion. Truck repair services accounted for $5.1 billion in annual revenues. In total, there were 192,300 full-time equivalent employees in this category or 230,800 full and part-time employees in These individuals received $3.4 billion in annual compensation. Using the earnings multiplier, this translates to a total impact of $7.4 billion. Truck activity facilities paid $6.6 billion in state fuel taxes with an additional payment of $871 million in sales taxes and $139 million in property taxes. Finally, truck activity facilities purchased $48.9 billion in goods and services during The NATSO Foundation 12

16 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses Projected Truck Service Facilities Activity in the Year 2010 The econometric model used to explain interchange truck activity and to forecast sales in the year 2010 was based on establishing a relationship between total truck economic activity in terms of annual dollars of sales and truck traffic miles along the Interstate. All data were aggregated to the county level since all economic variables of interest (population, income, etc.) are only collected at the county level. The number of truck traffic miles in the county was included to pick up the impact of highway travel on interchange truck activity. The estimated relationship between truck traffic and truck service activity sales in 2002 was used to project truck activity at the interchange locations in the year Appendix B provides more details of this model. The Robert H. Smith School of Business study team collected 2002 and projected 2010 data on truck traffic from the Federal Highway Administration s Highway Performance Monitoring System. This database reports average annual daily traffic (both car and percent combination truck) at a number of counting stations along the Interstate Highway System in each county. The truck mile figure was based on a multiplication of average annual daily truck traffic (averaged across the counting stations in the county) and the total miles of Interstate highway in the county. For every 365,000 additional truck traffic miles (i.e., 1,000 truck miles per day) in the average county (254,000 truck miles per day), sales increase in the total truck activity category by $93,000 on an annual basis. Truck traffic miles give rise to more economic activity than what is indicated by our model, since only percent of diesel fuel sold to operate trucks is purchased at truck stops or fuel stops and not all truckstops and fuel stops are built within 1/4 mile of an Interstate. Table 6 uses the established relationships between the independent variables and truck activity sales in 2002 along with projected values of independent variables for the year 2010 to project truck activity sales in the year The truck activity composite category includes: truck stops/truck repair centers and truck fuel stops. As shown, projected truck activity sales for the year 2010 equal $65.5 billion-an increase of $5.2 billion from 2002 sales. Employment in this category is forecasted to increase by 16,700 from 192,000 to 209,000 full-time equivalent employees. In the year 2010, the facilities in this category will pay $7.5 billion in state fuel taxes, $946 million in sales taxes, and $151 million in property taxes. In addition, facilities will purchase $53.1 billion in goods and services. 13 The NATSO Foundation

17 Fueling American Prosperity Table 1 Total Economic Activity at Interstate Highway Interchanges Actual 2002 and Forecasted 2010 Actual 2002 Forecast 2010 Gasoline Gallons 22,429,500,000 25,902,552,000 Diesel Gallons 31,483,630,000 34,534,445,000 Gasoline Sales $29,494,606,000 $34,073,257,000 Diesel Sales $41,180,790,000 $45,237,099,000 Convenience Store Sales $18,542,550,000 $21,154,916,000 Repair Service Sales $5,082,000,000 $5,524,263,000 Restaurant Sales $40,934,770,000 $48,869,659,000 Hotel/Motel Sales $34,479,000,000 $39,654,400,000 Other Sales $1,441,939,000 $1,595,390,000 Total Sales $171,155,654,000 $196,111,193,000 Employees (Full-time Equivalents) 1,596,000 1,827,400 Total Employees (Full and Part-time) 1,915,200 2,192,800 Employee Compensation $30,094,166,000 $34,383,120,000 Employee Compensation (Earnings Multiplier) $65,003,399,000 $73,098,161,000 Property Tax $1,516,417,000 $1,748,919,000 Sales Tax $3,588,081,000 $4,196,860,000 State Fuel Tax $10,549,642,000 $12,106,774,000 State Lodging Tax $2,171,798,000 $2,498,556,000 Local Lodging Tax $1,705,232,000 $1,961,790,000 Cost of Goods Sold $93,361,200,000 $105,848,827,000 Up to 2 million people employed at interchange businesses earned $30 billion in 2002, impacting the American economy by $65 billion. The NATSO Foundation 14

18 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses Table 2 Typical Truck Stop/Truck Repair Data Truckstop Actual 2002 Gasoline Gallons 1,700,000 Diesel Gallons 12,400,000 Convenience Store Sales $2,700,000 Restaurant Sales $1,560,000 Other Sales $470,000 Employees (Full-time Equivalents) 73 Total Employees (Full and Part-time) 88 Employee Compensation $1,300,000 Property Tax $59,000 COG Fuel/ Fuel Sales COG Convenience/ Convenience Sales COG Restaurant/ Restaurant Sales Truck Repair Actual 2002 Total Sales $2,000,000 Employees (Full-time Equivalents) 11 Total Employees (Full and Part-time) 13 Employee Compensation $196,000 COG Repair/ Repair Sales * Information on sales, payroll, employment, taxes and cost of goods sold obtained from NATSO members. * Fuel prices and taxes obtained from Federal Highway Administration on a state by state basis. 15 The NATSO Foundation

19 Fueling American Prosperity Table 3 Truck Stop Aggregate Data Truckstop Actual 2002 Forecast 2010 Gasoline Gallons 2,155,600,000 2,343,192,000 Diesel Gallons 15,723,200,000 17,091,518,000 Gasoline Sales $2,837,296,000 $3,084,213,000 Diesel Sales $20,584,508,000 $22,375,884,000 Convenience Store Sales $3,423,600,000 $3,721,540,000 Restaurant Sales $1,978,080,000 $2,150,223,000 Other Sales $595,960,000 $647,824,000 Total Sales $29,419,444,000 $31,979,684,000 Employees (Full-time Equivalents) 92, ,700 Total Employees (Full and Part-time) 111, ,000 Employee Compensation $1,648,400,000 $1,791,853,000 Employee Compensation (Earnings Multiplier) $3,560,544,000 $3,870,402,000 Property Tax $74,812,000 $81,323,000 Sales Tax $314,715,000 $342,103,000 State Fuel Tax $3,599,660,000 $3,912,922,000 Cost of Goods Sold $24,929,146,000 $27,098,616,000 Truck Repair Actual 2002 Forecast 2010 Total Sales $5,082,000,000 $5,524,263,000 Employees (Full-time Equivalents) 28,000 30,400 Total Employees (Full and Part-time) 33,600 36,500 Employee Compensation $498,036,000 $541,378,000 Sales Tax $270,962,000 $294,543,000 Cost of Goods Sold $2,042,229,000 $2,219,955,000 The NATSO Foundation 16

20 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses Table 4 Typical Truck Fuel Stop Data Truck Fuel Stop with Food Actual 2002 Gasoline Gallons 1,400,000 Diesel Gallons 5,900,000 Convenience Store Sales $1,800,000 Restaurant Sales $800,000 Other Sales $270,000 Employees (Full-time Equivalents) 50 Total Employees (Full and Part-time) 60 Employee Compensation $860,000 Property Tax $34,000 COG Fuel/ Fuel Sales COG Convenience/ Convenience Sales COG Restaurant/ Restaurant Sales Truck Fuel Stop without Food Actual 2002 Gasoline Gallons 1,250,000 Diesel Gallons 3,500,000 Convenience Store Sales $1,400,000 Other Sales $160,000 Employees (Full-time Equivalents) 15 Total Employees (Full and Part-time) 18 Employee Compensation $285,000 Property Tax $18,000 COG Fuel/ Fuel Sales COG Convenience/ Convenience Sales * Information on sales, payroll, employment, taxes and cost of goods sold obtained from surveys of NATSO and SIGMA members. * SIGMA and NATSO members classified as truck fuel stops if greater than 25% of fuel gallons sold are diesel fuel and diesel fuel gallons sold are less than 8.5 million gallons per year. 17 The NATSO Foundation

21 Fueling American Prosperity Table 5 Truck Fuel Stop Aggregate Data Actual 2002 Forecast 2010 Gasoline Gallons 3,634,550,000 3,950,848,000 Diesel Gallons 11,853,800,000 12,885,382,000 Gasoline Sales $4,777,044,000 $5,192,768,000 Diesel Sales $15,457,159,000 $16,802,325,000 Convenience Store Sales $4,267,200,000 $4,638,555,000 Restaurant Sales $677,600,000 $736,568,000 Other Sales $542,130,000 $589,309,000 Total Sales $25,721,133,000 $27,959,526,000 Employees (Full-time Equivalents) 71,700 77,900 Total Employees (Full and Part-time) 86,000 93,500 Employee Compensation $1,286,735,000 $1,398,714,000 Employee Compensation (Earnings Multiplier) $2,779,348,000 $3,021,222,000 Property Tax $64,060,000 $69,635,000 Sales Tax $284,869,000 $309,660,000 State Fuel Tax $3,017,262,000 $3,557,275,000 Cost of Goods Sold $21,890,924,000 $23,795,991,000 Table 6 Truck Service Activity Aggregate Data Actual 2002 Forecast 2010 Gasoline Gallons 5,790,150,000 6,294,040,000 Diesel Gallons 27,577,000,000 29,976,900,000 Gasoline Sales $7,614,340,000 $8,276,981,000 Diesel Sales $36,041,667,000 $39,178,208,000 Convenience Store Sales $7,690,800,000 $8,360,095,000 Restaurant Sales $2,655,680,000 $2,886,792,000 Repair Service Sales $5,082,000,000 $5,524,263,000 Other Sales $1,138,090,000 $1,237,133,000 Total Sales $60,222,577,000 $65,463,473,000 Employees (Full-time Equivalents) 192, ,000 Total Employees (Full and Part-time) 230, ,800 Employee Compensation 3,433,171,000 3,731,945,000 Employee Compensation (Earnings Multiplier) 7,415,649,760 8,061,000,000 Property Tax $138,872,000 $150,957,000 Sales Tax $870,546,000 $946,305,000 State Fuel Tax $6,616,922,000 $7,470,197,000 Cost of Goods Sold $48,862,299,000 $53,114,562,000 The NATSO Foundation 18

22 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses IV. Gasoline Stations The Robert H. Smith School of Business study team also received cooperation from members of SIGMA in developing a profile of the typical gasoline station at interchanges along the Interstate Highway System. Each of these companies responded to a survey form designed to collect information on sales, number of employees, employee compensation, taxes, and cost of goods sold for the different areas of their business (i.e., gasoline and diesel sales, convenience store sales, other sales, and automobile repair services). If gasoline sales accounted for more than 75 percent of total fuel sales, the facility was considered to be a gasoline station as opposed to a fuel truck stop. Table 7 profiles a typical gasoline station with either food services or without food services. This profile is based on data averaged from 227 establishments as submitted by SIGMA members. On average, the typical gasoline station either with or without food sells 1.2 million gallons of gasoline and 270,000 gallons of diesel fuel on an annual basis. The convenience store sales average $750,000, while other sales average $21,000 on an annual basis. The typical gasoline station has seven full-time equivalent employees or eight full and part-time employees earning a total of $155,000 annually. Gas stations with food include restaurant sales that amount to $370,000 annually. A typical gasoline station sold 1.2 million gallons of gasoline and 270,000 gallons of diesel fuel in Table 8 shows the estimated 2002 economic activity at gasoline stations nationwide based on a multiplication of the typical gasoline station s annual sales and the total number of such facilities at interchange locations according to Zenrin s Interstate Freeway Exit Business and Service database. There were 2,141 gas stations with food services and 12,328 gas stations without food services. As shown, these facilities generated $39 billion in total sales, of which $21.9 billion resulted from gasoline sales. In total, gasoline stations at IHS interchange locations had 101,300 full-time equivalent employees or 121,600 full and part-time employees who received $2.2 billion in annual compensation. Using the earnings multiplier, this translates to a total impact of $4.8 billion. The gasoline stations paid $3.9 billion in state fuel taxes and an additional $652 million in sales taxes in 2002 and $130 million in property taxes. Finally, the gasoline stations nationwide purchased goods and services totaling $33 billion in The NATSO Foundation

23 Fueling American Prosperity Projected Gasoline Station Activity in the Year 2010 The econometric model designed to explain economic activity at IHS interchange gasoline stations and to forecast sales in the year 2010 was based on establishing a relationship between total gasoline station economic activity and the following independent variables: total (cars and commercial trucks combined) traffic miles along the Interstate in the county and county populations. The number of traffic miles was included to pick up the impact of highway travel on interchange activity, while county population was included to pick up the impact of local economic activity on interchange sales. Traffic miles are measured as they were in the previous truck activity model except that total traffic as reported in the HPMS data is utilized as opposed to truck traffic. Forecasted traffic counts are provided in the HPMS data. County populations in 2002 and forecasted county populations in 2010 are provided by Woods & Poole Economics, Inc. Additional model details are provided in Appendix B. For every 365,000 increase in traffic miles (i.e., 1,000 traffic miles per day), sales increase in the gasoline station category by $19,380 on an annual basis. For every 1,000 increase in county population (from a mean national county population of 184,000), sales increase in the gasoline station category by $5,732 on an annual basis. Table 8 employs the established relationships between the independent variables and gasoline station sales in 2002 along with projected values of the independent variables for the year 2010 to project gasoline station activity. As indicated, projected gasoline station sales for the year 2010 equal $45.9 billion an increase of $6.9 billion from 2002 sales. Employment in this category is forecasted to increase by 18,100 from 101,300 to 119,000 full-time equivalent employees. In the year 2010, the gasoline stations in this category will pay $4.6 billion in state fuel taxes and an additional $768 million in state sales taxes. In addition, these facilities will purchase $38.3 billion in goods and services. Gasoline station sales are projected to reach $45.9 billion annually by the year The NATSO Foundation 20

24 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses Table 7 Typical Gasoline Station Data Gasoline Station with Food Actual 2002 Gasoline Gallons 1,150,000 Diesel Gallons 270,000 Convenience Store Sales $750,000 Restaurant Sales $370,000 Other Sales $21,000 Employees (Full-time Equivalents) 7 Total Employees (Full and Part-time) 8 Employee Compensation $155,000 Property Tax $9,000 COG Fuel/ Fuel Sales COG Convenience/ Convenience Sales COG Restaurant/ Restaurant Sales Gasoline Station without Food Actual 2002 Gasoline Gallons 1,150,000 Diesel Gallons 270,000 Convenience Store Sales $750,000 Other Sales $21,000 Employees (Full-time Equivalents) 7 Total Employees (Full and Part-time) 8 Employee Compensation $155,000 Property Tax $9,000 COG Fuel/ Fuel Sales COG Convenience/ Convenience Sales * Information on sales, payroll, employment, taxes and cost of goods sold obtained from survey of SIGMA members. * SIGMA members classified as gas stations if more than 25% of gallons of fuel sold were gasoline. 21 The NATSO Foundation

25 Fueling American Prosperity Table 8 Gasoline Station Aggregate Data Actual 2002 Forecast 2010 Gasoline Gallons 16,640,500,000 19,618,725,000 Diesel Gallons 3,906,900,000 4,606,136,000 Gasoline Sales $21,880,266,000 $25,796,276,000 Diesel Sales $5,139,122,000 $6,058,890,000 Convenience Store Sales $10,852,500,000 $12,794,821,000 Restaurant Sales $792,170,000 $933,948,000 Other Sales $303,870,000 $358,257,000 Total Sales $38,969,800,000 $45,944,400,000 Employees (Full-time Equivalents) 101, ,400 Total Employees (Full and Part-time) 121, ,300 Employee Compensation $2,242,850,000 $2,644,263,000 Employee Compensation (Earnings Multiplier) $4,844,556,000 $5,711,608,000 Property Tax $130,230,000 $153,538,000 Sales Tax $651,503,000 $768,105,000 State Fuel Tax $3,932,720,000 $4,636,577,000 Cost of Goods Sold $32,488,083,000 $38,302,622,000 The NATSO Foundation 22

26 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses V. Food Facilities The Robert H. Smith School of Business study team turned to the National Restaurant Association for information on sales, payroll, employment, taxes, and cost of goods sold at food establishments. Deloitte & Touche conduct an independent survey of restaurants on behalf of the National Restaurant Association and present results on an annual basis. The Deloitte & Touche survey was used in developing three profiles of the typical food establishment at interchanges along the Interstate Highway System. The three categories were: limited-service fast food restaurants, full-service franchise restaurants (with checks $15 and under per person), and full-service independent restaurants (with checks $15 and under per person). Table 9 provides a profile of the three typical food establishments at interchanges along the Interstate Highway System. The typical limited-service fast food restaurant generates $870,000 in annual sales with 20 full-time equivalent employees or 24 full and part-time employees, who earn $290,000 in annual wages. For these facilities, the cost of goods sold is 28.7% of sales. The typical full-service franchise restaurant generates $1.7 million in annual sales with 40 full-time equivalent employees or 48 full and part-time employees, who earn $600,000 in annual wages. For these facilities, the cost of goods sold is 31.5% of sales. The typical full-service independent restaurant generates $750,000 in annual sales with 18 full-time equivalent employees or 22 full and part-time employees, who earn $255,000 in annual wages. For these facilities, the cost of goods sold is 33.9% of sales. Table 10 shows the estimated 2002 economic activity at food establishments nationwide based on the product of the typical food facility s annual sales and the total number of food establishments at interchanges along the IHS. There were 14,836 limited-service fast food restaurants, 4,968 full-service franchise restaurants, and 21,512 fullservice independent restaurants. As shown, these activities produced $37.5 billion Interchange restaurants pay $12.8 billion in wages to as many as 1.1 million employees. in annual sales in In total, the food facilities had 883,000 full-time equivalent employees or 1.1 million full and part-time employees who received $12.8 billion in annual wages. Using the earnings multiplier, this translates to a total impact of $27.6 billion. These facilities paid $2.1 billion in state sales taxes and an additional $192 million in property taxes. Food facilities paid $12 billion for purchased goods and services during The NATSO Foundation

27 Fueling American Prosperity Projected Food Facility Activity in the Year 2010 The econometric model designed to explain economic activity at IHS interchange food facilities and to forecast sales in the year 2010 was based on establishing a relationship between total food facility economic activity and the following independent variables: total (cars and commercial trucks) traffic miles and county population. The number of traffic miles was included to pick up the impact of highway travel on interchange activity, while county population was included to pick up the impact of local economic activity on interchange sales. Independent variables are measured as they were in the gasoline station activity model. Once again, projected values for independent variables in the year 2010, obtained from independent sources, were used to predict food facility sales in the year For every 365,000 increase in traffic miles (i.e., 1,000 traffic miles per day), sales increase in the total food facility category by $20,980 on an annual basis. For every 1,000 increase in county population (from a mean national county population of 184,000), sales increase in the food facility category by $8,573 on an annual basis. Table 10 uses the established relationships between the independent variables and food facility sales in 2002 along with projected values of the independent variables for the year 2010 to project food facility sales in As shown, projected food facility sales for the year 2010 equal $45 billion-an increase of $7.5 billion from 2002 sales. Employment in this category is forecasted to increase by 178,200 from 883,000 to 1.06 million full-time equivalent employees. In the year 2010, food facilities in this category will pay $2.5 billion in sales taxes and an additional $231 million in property taxes. In addition, these facilities will purchase $14.4 billion in goods and services. In the year 2010, interchange restaurants will pay $2.5 billion in sales taxes and $231 million in property taxes. The NATSO Foundation 24

28 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses Table 9 Typical Food Establishment Data Limited-Service Fast Food Actual 2002 Total Sales $870,000 Employees (Full-time Equivalents) 20 Total Employees (Full and part-time) 24 Employee Compensation $290,000 Property Tax $4,500 COG Food / Food Sales Full-Service Franchise (Checks under $15) Actual 2002 Total Sales $1,700,000 Employees (Full-time Equivalents) 40 Total Employees (Full and part-time) 48 Employee Compensation $600,000 Property Tax $8,800 COG Food / Food Sales Full-Service Independent (Checks under $15) Actual 2002 Total Sales $750,000 Employees (Full-time Equivalents) 18 Total Employees (Full and part-time) 22 Employee Compensation $255,000 Property Tax $3,800 COG Food / Food Sales * Information on sales, payroll, employment, taxes and cost of goods sold obtained from the National Restaurant Association. * Based on independent surveys conducted by Deloitte & Touche of restaurants. * Major food chains at interchange exits were classified as either being in the limited fast food category or the full service franchise($15 and under per person) category. Non-chain food establishments were classified as full service independent ($15 and under per person. 25 The NATSO Foundation

29 Fueling American Prosperity Table 10 Food Establishment Aggregate Data Actual 2002 Forecast 2010 Total Sales $37,492,200,000 $45,048,920,000 Employees (Full-time Equivalents) 882,800 1,061,000 Total Employees (Full and part-time) 1,059,000 1,273,000 Employee Compensation $12,770,585,000 $15,344,552,000 Employee Compensation (Earnings Multiplier) $27,584,464,000 $33,144,232,000 Property Tax $192,253,000 $231,002,000 Sales Tax $2,066,032,000 $2,482,450,000 Cost of Goods Sold $12,010,812,000 $14,431,643,000 The NATSO Foundation 26

30 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses VI. Lodging Facilities Information on lodging facilities was acquired from Smith Travel Research. They collected data on lodging facilities in several different categories including highway service hotels and motels. They provided information on sales, employee compensation, and property taxes paid by a sample of 319 highway hotels and motels. The highway service category included information that allowed us to construct a typical establishment with a restaurant and a typical establishment without a restaurant. State and local lodging taxes were obtained from the American Hotel and Motel Association. Employee wage rates for hotels and motels were obtained from the Bureau of Economic Analysis and combined with employee compensation from Smith Travel Research in order to compute the number of employees. Table 11 provides a profile of the typical lodging facility with and without food services at interchanges along the Interstate Highway System. The typical lodging facility with food services generates $5.8 million in annual sales with 64 full-time equivalent employees or 77 full and part-time employees, who earn $1.9 million in annual wages. The typical lodging facility with food services contributes $150,000 in property taxes. The typical lodging facility without food services generates $1.9 million in annual sales with 21 full-time equivalent employees or 25 full and part-time employees, who earn $600,000 in annual wages. The typical lodging facility without food services contributes $62,000 in property taxes Hotels and motels at Interstate interchanges generated $34.5 billion in sales in 2002, and employed up to 457,000 employees. Table 12 shows that in 2002 hotels/motels at IHS interchange locations generated $34.5 billion in sales. There were 1,783 lodging facilities with food services and 12,704 lodging facilities without food services. They employed an estimated 381,000 full-time equivalent employees or 457,000 full and part-time employees and paid them $11 billion in total compensation. Using the earnings multiplier, this translates to a total impact of $23.8 billion. The hotel/motel facilities paid $2.2 billion in state lodging taxes and $1.7 billion in local lodging taxes in In addition, these facilities contributed $1.1 billion in property taxes on an annual basis. Projected Lodging Facility Activity in the Year 2010 The econometric model designed to explain hotel/motel activity and to forecast sales in the year 2010 was based on establishing a relationship between total hotel/motel activity in terms of annual dollars of sales and the following independent variables: total traffic miles and county population. The number of traffic miles was included to pick up the impact of highway travel on interchange activity, while county population was included to pick up the impact of local economic activity on interchange sales. Independent variables are measured as they were for the gasoline station sales model. Once again, projected values for independent variables in the By the year 2010, lodging facilities at interchange locations will see sales increase by 5.2 billion since year 2000, obtained from independent sources, were used to predict hotel/motel facility sales for that year. For every 365,000 increase in traffic miles (i.e., 1,000 traffic miles per day), sales increase in the hotel/motel facility category by $14,660 on an annual basis. For every 1,000 increase in county population (from a mean national county population of 184,000), sales increase in the hotel/motel category by $3,786 on an annual basis. 27 The NATSO Foundation

31 Fueling American Prosperity Table 12 uses the established relationships between the independent variables and the hotel/motel facility sales in 2002 along with projected values of the independent variables for the year 2010 to project hotel/motel facilities activity for that year. As shown, projected hotel/motel activity sales for the year 2010 are estimated at $39.7 billion-an increase of $5.2 billion from 2002 sales. Employment in this category is forecasted to increase by 57,000 from 381,000 to 438,000 fulltime equivalent employees. In the year 2010, the hotels/motels in this category will pay $2.5 billion in state lodging taxes, $2 billion in local lodging taxes, and $1.2 billion in property taxes. Table 11 Typical Hotel/Motel Data Lodging with Food Actual 2002 Total Sales $5,800,000 Employees (Full-time Equivalents) 64 Total Employees (Full and part-time) 77 Employee Compensation $1,900,000 Property Tax $150,000 Lodging without Food Actual 2002 Total Sales $1,900,000 Employees (Full-time Equivalents) 21 Total Employees (Full and part-time) 25 Employee Compensation $600,000 Property Tax $62,000 * Information on sales, employee compensation and property taxes obtained from Smith Travel Research. * Based on independent surveys conducted by Smith Travel Research of highway service hotels and motels with and without food services. * State and local property tax rates obtained from the American Hotel and Motel Association. * Employee wage rates for hotels/motels obtained from the Bureau of Economic Analysis and used to compute number of employees. Table 12 Hotel/Motel Aggregate Data Actual 2002 Forecast 2010 Total Sales $34,496,300,000 $39,654,400,000 Employees (Full-time Equivalents) 381, ,000 Total Employees (Full and part-time) 457, ,600 Employee Compensation $11,015,700,000 $12,662,360,000 Employee Compensation (Earnings Multiplier) $23,793,912,000 $27,350,697,000 Property Tax $1,055,584,000 $1,213,421,000 State Lodging Tax $2,173,552,000 $2,498,556,000 Local Lodging Tax $1,706,608,000 $1,961,790,000 The NATSO Foundation 28

32 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses VII. Impact of Rest Area Commercialization In many states, there are portions of the Interstate Highway System right-of-way that were commercialized prior to the development of the IHS. These businesses, located directly on the Interstate right-of-way, obtain significant market dominance. The econometric models developed in the previous sections specifically estimate the impact of these right-of-way facilities on the amount of economic activity present at interchange locations. These estimates serve as an excellent tool in measuring the economic impact commercialization of these facilities has had on economic development at nearby interchange locations. Currently, service facilities on the IHS right-ofway include truck fuel stops, gasoline stations, and food establishments. As a result, the econometric models of truck service activity sales, gasoline station sales, and food sales all include a measure of the impact of commercialized facilities. The presence of the Maryland House, a commercialized rest area, results in decreased sales, property tax payments and employment at nearby interchanges. The models indicate that the commercialization of the IHS in a county results in the loss, on average, of $22.5 million in annual sales at food establishments at the interchange exits in that county. This is equivalent to approximately 26 typical limited-service fast food restaurants. In other words, for every county where IHS commercialization occurs, an average of 26 limited-fast food restaurants disappear at the exits in that county. The models also indicate that the presence of commercialized facilities on the IHS in a county results in a reduction, on average, of $17.2 million in gasoline station sales at interchange exits in that county. This is equivalent to the elimination of approximately seven typical gasoline establishments without restaurants. For every county in which rest area commercialization occurs, an average of 26 restaurants, seven gas stations and two truck fuel stops disappear. Local governments see a corresponding drop in property taxes. The models also found that commercialization of the IHS in a county results in a reduction, on average, of $16.1 million in truck service activity sales at interchange exits in that county. This is equivalent to the elimination of approximately two truck fuel stops without food. The model results indicate the amount of sales lost in each county at interchange exits as a result of commercialization. If these lost sales are added to existing sales in the counties with commercialized facilities, the percentage of sales lost at interchange exits as a result of commercialization can be calculated. 29 The NATSO Foundation

33 Fueling American Prosperity There are 66 counties in this study that already have commercialized facilities on the IHS right-of-way. For the 66 counties that currently have commercialized facilities, the average reduction in food establishment sales at the interchange exits in that county is 56 percent. The presence of commercialized facilities in these counties results in an average reduction in gasoline station sales at the interchange exits of 51 percent. Finally, the model indicates that for the 66 counties that currently have commercialized facilities, the average reduction in truck service facilities sales at the interchange exits in that county is 46 percent. In all cases, along with the reduction in sales, there is a corresponding reduction in employees and tax receipts. Commercialized rest areas, located directly on the interstate right-ofway, are able to obtain significant market dominance, reducing the presence of interchange businesses by about 50 percent. The Zenrin database identifies 907 rest areas in 621 counties along the IHS right-of-way that could be available for rest area commercialization activity. Model results indicate that rest area commercialization will displace a substantial number of the existing interchange facilities. Table 13 presents the current level of economic activity in these counties. Because the average county that currently has commercialized facilities varies slightly in some aspects from the typical county with rest areas (both commercialized and non-commercialized), the forecasted effect on these counties is slightly lower. The model indicates that food establishment sales will fall by 47 percent, gasoline station sales will fall by 42 percent, and truck service activity sales will fall by 25 percent. If current rest areas are permitted to offer commercial services, a substantial number of existing businesses will close. Experience with commercialized IHS right-of-way facilities involves only food establishments, gasoline stations and fuel stops. However, future efforts to expand commercialization on the IHS would not necessarily be constrained to these types of facilities. In fact, new commercialization efforts could be expanded to include lodging. Based on experience with food establishments, gasoline stations and truck fuel stops, construction of hotels and motels on the IHS could be expected to have a similar economic impact (approximately 50 percent reduction) on IHS interchange hotels and motels. Table 13 Impact of Commercialization on Counties with Rest Stops Measure Current Economic Activity Percent Economic if County Reduction Activity Commercialized Food Sales (billions of $) Food Employment (thousands) Gasoline Sales (billions of $) % Gasoline Employment (thousands) Truck Activity Sales (billions of $) % Truck Activity Employment (thousands) The NATSO Foundation 30

34 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses Appendix A Survey to Determine the Extent of Economic Activity at Interstate Highway Interchanges - NATSO Members The University of Maryland is currently involved in a project sponsored by The NATSO Foundation which involves the measurement of economic activity that takes place at Interstate highway interchanges. This is a crucial first step in documenting the importance of highway interchanges in the economic health of a region. Proposals to commercialize the Interstate highway system are under consideration as part of the 2003 highway legislation. Commercialization may allow the construction of service areas (providing food, fuel, and other services) on the Interstate right of way. This potential commercialization threatens the viability of the businesses at interchange exits. The project we are undertaking for NATSO will measure the extent of economic activity at highway interchanges and provide a measure of the amount of that activity that will be impacted by Interstate commercialization. In order to establish good estimates of current economic activity, we are requesting the service providers at these highway interchanges to give us some information on the contribution of their business to the local economy. We appreciate any help that NATSO members could provide and ask that you fill in the requested information regarding your truck stops on the attached page. We are requesting information on sales, employees, employee compensation, taxes, and cost of goods sold for different areas of your business. We are looking for this information on a per establishment basis. In general we would like information on establishments within 1/4 mile of an Interstate highway exit. If you are reporting summary data for more than one establishment, please indicate the number of establishments included in the summary for each category. When reporting numbers for activity categories, report the average for establishments that have services in that category. For instance, if 10 truck stops out of 20 also have a convenience store attached, report the average sales, etc. for only those 10 truck stops in the convenience store column. If it is not possible to provide the exact information requested, we would appreciate any information you have available on a per establishment basis at whatever level of aggregation is available. The information will be collected by NATSO and forwarded to the University of Maryland for use in this project. The survey responses will be used to construct an average truck stop; no individual company numbers will be used in the report. We appreciate any help you can provide. Survey to Determine the Extent of Economic Activity at Interstate Highway Interchanges - SIGMA Members The University of Maryland is currently involved in a project sponsored by The NATSO Foundation which involves the measurement of economic activity that takes place at Interstate highway interchanges. This is a crucial first step in documenting the importance of highway interchanges in the economic health of a region. Proposals to commercialize the Interstate highway system are under consideration as part of the 2003 highway legislation. Commercialization may allow the construction of service areas (providing food, fuel, and other services) on the Interstate right of way. This potential commercialization threatens the viability of the businesses at interchange exits. The project we are undertaking for NATSO will measure the extent of economic activity at highway interchanges and provide a measure of the amount of that activity that will be impacted by Interstate commercialization. 31 The NATSO Foundation

35 Fueling American Prosperity In order to establish good estimates of current economic activity, we are requesting the service providers at these highway interchanges to give us some information on the contribution of their business to the local economy. We appreciate any help that SIGMA members could provide and ask that you fill in the requested information regarding your fuel stop on the attached page. We are requesting information on sales, employees, employee compensation, taxes, and cost of goods sold for different areas of your business. We are looking for this information on a per establishment basis. In general we would like information on establishments within 1/4 mile of an Interstate highway exit. The information will be collected by SIGMA and forwarded to the University of Maryland for use in this project. The survey responses will be used to construct an average fuel stop, no individual company numbers will be used in the report. We appreciate any help you can provide. Truck Stop Activities Report Per Establishment Activity Categories 2002 Annual Diesel Gas Convenience Repair Restaurant Sales Other (including Data Sales Sales Store Sales Services Sales phones, games) Total Annual Sales ($) Number of gallons sold Numer of employees (Full-time equivalent) Annual Employee Compensation ($) (wages and fringes) State Taxes Paid ($) 1. State Sales Taxes 2. State Property Taxes 3. State Fuel Taxes 4. Other State Taxes Local Taxes Paid ($) 1. Local Sales Taxes 2. Local Property Taxes 3. Local Fuel Taxes 4. Other Local Taxes Cost of Goods Sold ($) If restaurant data was provided, please choose one to describe the restaurant: 1. Limited Service (Fast-food) 2. Full-service with average check per person under $15 3. Full-service with average check per person between $15 and $25 4. Full-service with average check per person over $25 If restaurant is a chain, name of chain: The NATSO Foundation 32

36 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses Regression Results Appendix B The body of this report discussed the econometric models used to forecast economic activity in each of four separate highway service categories: truck activity, gasoline stations, restaurants, and lodging establishments. This appendix will document, in more detail, the regression results used in forecasting future economic activity in each of these four highway service categories. All regressions were run at the county level. The economic activity in each highway service category was computed as a sum of the activity at all interchanges that were present in the county. For example, the total number of restaurants in a county consisted of the number of restaurants at each highway interchange summed over all highway interchanges in that particular county. Truck Service Activity The model used to forecast future truck activity was based on a regression of total truck activity sales as a function of traffic on the Interstate Highway System, and the presence of one or more fuel stops on the IHS right of way in the county. Total truck activity sales (the dependent variable) were computed as the sum of truck stop sales, truck repair services sales, and truck fuel stop sales. Truck stop sales for a county were computed as the number of truck stops at interchanges in the county times the sales figures for a typical truck stop as reported in Table 1. Truck repair services sales were computed as the total number of facilities providing truck repair services at interchanges in the county times the typical truck repair facility as reported in Table1. Truck fuel stop sales were computed as the total number of truck fuel stops at interchanges in the county times the typical truck fuel stop as reported in Table 4. Truck fuel stops were divided into two categories: with food and without food. Each truck fuel stop was assigned to one of these two categories based on the information included in the Zenrin USA data base. The independent variables included truck traffic, truck traffic squared and fuel stops on the IHS right of way. The measure of truck traffic on the Interstate utilized in this model was the number of truck miles per day in The HPMS data set provided by the Federal Highway Administration provides counts at various points on the Interstate highway system of total traffic and the percentage of that traffic that consists of trucks. The total number of truck miles per day was computed by multiplying the number of trucks counted times the segment length. The segment length listed the number of miles of the Interstate covered by that particular count. These segments were mutually exclusive and the total county value for truck miles was computed by adding the various truck miles computed for each segment across all segments in the county. The HPMS data set provided actual traffic counts in 2001 and forecast traffic counts for each observation. The forecast traffic counts were provided for a single year between 2019 and 2026 depending on the state. For each traffic count observation in the county, an average growth rate (per year) was computed. All growth rates in a county were then used to create a weighted average annual growth rate for the county with the weights based on the amount of traffic. Traffic counts used in the regression for 2002 were computed by applying the annual county growth rate to the actual 2001 traffic counts. Forecasted traffic counts in 2010 were computed by applying the average annual growth rate in each county to the actual 2001 traffic counts. County population for 2002 and a forecast of population in the year 2010 was obtained from Woods & Poole Economics. The regression included a squared term for traffic to account for the possibility of a nonlinear 33 The NATSO Foundation

37 Fueling American Prosperity relationship between traffic and sales. The presence of fuel stops on the IHS right of way was included as part of the Zenrin USA database. There were a total of 64 fuel stops in 50 counties on the IHS right of way in the data set. All independent variables were collected for The regression was run on the 1,233 counties with data on all of the independent variables. The HPMS data set was missing the percentage of total traffic that consisted of trucks at each of its counting stations for some counties. The truck percentage was estimated for these counties by using the truck percentage of an adjacent county. The results of this regression are reported in Column 1 of Table B2. Forecasts for the 37 counties with missing data were based on the average growth rate of sales for the 1,233 counties with the necessary data to make forecasts. The coefficients on traffic, traffic squared and the presence of an IHS fuel stop are all significantly different from zero at the 95 percent confidence level. All coefficients had the expected sign. An increase in traffic miles per day has a positive influence on truck activity sales. Since the impact of traffic is nonlinear the impact will vary depending on the total level of traffic. For instance at the mean level of truck traffic (254,000 truck miles per day), the impact of an additional truck mile per day (365 truck miles per year) would be determined by both the traffic and traffic squared coefficients and amounts to an increase of 93 dollars in annul sales. As traffic grows the impact of an additional truck mile declines. So that for a county with 500,000 truck miles per day, an additional truck mile will increase sales by only 89 dollars. The presence of one or more fuel stops on the IHS right of way in the county reduces the annual truck activity sales in the county by 16.1 million dollars. The coefficient of variation (R2) of the truck service regression is relatively low (.24). It is not uncommon for cross section regression equations to have a low R2. The regression equations for the other three service categories are all quite high, ranging from.72 to.89. This low R2 means that there are other factors affecting truck sales at interchanges that we have not been able to incorporate into the regression. In spite of the low R2 for the truck service equation, the coefficients for truck miles and for county commercialization are both significant at the 95 percent confidence level. The overall regression equation is significant at the 99.9 percent confidence level. Truck activity sales in the year 2010 were forecasted using the regression coefficients in Column 1 and the forecasted values of traffic in the year The number of fuel stops located on the IHS were held fixed at their 2002 values. The proportion of sales going to fuel, food, convenience stores, etc was assumed to be in the same proportion as existed in The ratio of sales per employee was also assumed to remain fixed at its 2002 value in order to project employment in the year This is also true for the cost of goods sold. Gasoline Stations The model used to forecast future gasoline station sales was based on a regression of gasoline station sales as a function of traffic on the Interstate Highway System, county population, and the presence of one or more fuel stops/gasoline stations on the IHS right of way in the county. Total gasoline station sales (the dependent variable) were computed as the number of gasoline stations at interchanges in the county times the sales figures for a typical gasoline station as reported in Table 7. The independent variables included total traffic, population, and fuel stops/gasoline stations on the IHS right of way. The measure of traffic on the Interstate utilized in this model was the number of vehicle miles per day. Vehicle miles per day for each county were computed in the same manner as The NATSO Foundation 34

38 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses truck miles per day except that total traffic counts were used as opposed to truck traffic counts. County population was computed in the same manner as indicated in the truck activity model. The presence of fuel stops/gasoline stations on the IHS right of way was included as part of the Zenrin USA data base. There were a total of 78 fuel stops/gasoline stations in 58 counties along the IHS right of way in the data set. All independent variables were collected for The regression was run on the 1,233 counties with data on all of the independent variables. The results of this regression are reported in Column 2 of Table B2. The coefficients on all variables are significantly different from zero at the 99 percent confidence level. An increase in traffic miles per day has a positive influence on gasoline station sales. An increase of one vehicle mile per day (365 vehicle miles per year) results in an increase of $19.38 in annual sales. Since population is nonlinear the impact of population will vary depending on the total level of population initially. At the mean population of 184,000, one thousand additional people results in an increase of $5,732 dollars in annul sales. As population grows, the impact of an additional 1,000 people declines. Therefore, for a population of 500,000 people in the county, an additional 1,000 people increases annual sales by only $3,183. The presence of a fuel stop/gasoline station in the county on the IHS right of way reduces annual gasoline station sales by 17.2 million dollars. Gasoline station sales in the year 2010 were forecasted using the regression coefficients in Column 2 and the forecasted values of population and traffic in the year The number of fuel stops/gasoline stations on the Interstate was held fixed at 2002 values. The proportion of sales going to fuel, convenience stores, etc was assumed to be in the same proportion as existed in The ratio of sales per employee was also assumed to remain fixed at its 2002 value in order to project employment in the year This is also true for the cost of goods sold. Food Establishments The model used to forecast future food establishment sales was based on a regression of food establishment sales as a function of traffic on the Interstate Highway System, county population, and the presence of one or more restaurants on the IHS right of way in the county. Total food establishment sales (the dependent variable) were computed as the number of food establishments at interchanges in the county times the sales figures for a typical food establishment as reported in Table 9. The independent variables included total traffic, population, and food establishments on the IHS right of way. The measure of traffic on the Interstate utilized in this model was the number of vehicle miles per day. Vehicle miles per day for each county were computed in the same manner as truck miles per day except that total traffic counts were used as opposed to truck traffic counts. County population was computed in the same manner as indicated in the truck activity model. The presence of food establishments on the IHS right of way was included as part of the Zenrin USA data base. There were a total of 167 food establishments in 57 counties along the IHS right of way in the data set. All independent variables were collected for The regression was run on the 1,233 counties with data on all of the independent variables. The results of this regression are reported in Column 3 of Table B2. The coefficients on all variables are significantly different from zero at the 95 percent confidence level. An increase in traffic miles per day has a positive influence on restaurant sales. An increase of one vehicle mile per day (365 vehicle miles per year) results in an increase of $20.98 in annual sales. Since population is nonlinear the impact of population will vary depending on the total level of population. 35 The NATSO Foundation

39 Fueling American Prosperity At the mean population of 184,000, one thousand additional people will generate an additional $8,573 dollars in annual sales. As population increases, the impact of an additional 1,000 people declines. So that for a population of 500,000 people in the county, an additional 1,000 people increases sales by only $5,468. The presence of a food establishment on the IHS right of way in the county reduces annual restaurant sales by 22.5 million dollars. Food establishment sales in the year 2010 were forecasted using the regression coefficients in Column 3 and the forecasted values of population and traffic in the year The presence of food establishments on the Interstate were held fixed at their 2002 values. The ratio of sales per employee was assumed to remain fixed at its 2002 value in order to project employment in the year This is also true for the cost of goods sold. Hotels/Motels The model used to forecast future hotel/motel sales was based on a regression of hotel/motel sales as a function of traffic on the Interstate Highway System and county population. The impact of hotels/motels being built on the IHS right of way cannot be estimated since no hotels/motels currently exist on IHS right of way. Total hotel/motel sales (the dependent variable) were computed as the number of hotels/motels at interchanges in the county times the sales figures for a typical hotel/motel as reported in Table 11. The independent variables included total traffic and population. The measure of traffic on the Interstate utilized in this model was the number of vehicle miles per day. Vehicle miles per day for each county were computed in the same manner as truck miles per day except that total traffic counts were used as opposed to truck traffic counts. County population was computed in the same manner as indicated in the truck activity model. All independent variables were collected for The regression was run on the 1,233 counties with data on all of the independent variables. The results of this regression are reported in Column 4 of Table B2. The coefficients on all variables are significantly different from zero at the 90 percent confidence level. An increase in traffic miles per day has a positive influence on gasoline station sales. An increase of one vehicle mile per day (365 vehicle miles per year) results in an increase of $14.66 in annual sales. Since population is nonlinear the impact of population will vary depending on the total level of population initially. At the mean population of 184,000, one thousand additional people generates an increase of $3,786 dollars in annul sales. As population grows, the impact of an additional 1,000 people declines. Therefore, for a population of 500,000 people in the county, an additional 1,000 people has close to zero impact on sales. Hotel/motel sales in the year 2000 were forecasted using the regression coefficients in Column 4 and the forecasted values of population and traffic in the year The ratio of sales per employee was assumed to remain fixed at its 2002 value in order to project employment in the year This is also true for the cost of goods sold. The NATSO Foundation 36

40 How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses Table B1 Variable Means (Average County) Variable Mean Truckstops.998 Truck Repair Facilities Truck Fuel Stops with Food.667 Truck Fuel Stops without Food Gasoline Stations with Food Gasoline Stations without Food Limited-Service Fast Food Full-Service Franchise Food Full-Service Independent Food Lodging with Food Lodging without Food Traffic (vehicle miles per day) 1,474,352 Truck Traffic (vehicle miles per day) 253,732 Population 184,189 Miles of Interstate Table B2 Regression Results (t statistics in parentheses) Truck Gasoline Food Hotel/Motel Variable Sales Sales Sales Sales Constant (millions of dollars) (13.22) (4.24) (-1.09) (8.30) Traffic (vehicle miles per day) (15.30) (43.23) (37.94) (27.86) Traffic Squared (-6.76) Population 7,220 10,386 6,260 (thousands) (2.15) (2.50) (1.59) Population Squared (12.78) (-12.63) (-18.16) IHS Fuel Stop (millions of $) (-2.34) IHS Gasoline Station (millions of $) (-6.81) IHS Food Establishment (millions of $) (-7.14) R squared The NATSO Foundation

41 The NATSO Foundation 38 Appendix C - State Tables of Services and Economic Activity for 2002 Total U.S. Alabama Arizona Arkansas California Colorado Connecticut Gasoline Gallons 22,429,500, ,600, ,400, ,050,000 2,266,200, ,150, ,050,000 Diesel Gallons 31,483,630, ,190, ,700, ,190,000 1,878,630, ,270, ,220,000 Gasoline Sales $29,494,605,850 $731,913,600 $498,862,400 $396,152,300 $3,150,018,000 $488,071,500 $376,719,750 Diesel Sales $41,180,789,500 $901,854,590 $881,766,900 $694,902,240 $2,622,567,480 $661,188,620 $273,300,300 Convenience Store Sales $18,542,550,000 $463,250,000 $319,500,000 $270,550,000 $1,683,950,000 $289,150,000 $197,100,000 Repair Service Sales $5,082,000,000 $88,000,000 $124,000,000 $100,000,000 $336,000,000 $82,000,000 $44,000,000 Restaurant Sales $40,934,770,000 $799,820,000 $597,100,000 $418,710,000 $5,655,600,000 $708,640,000 $517,680,000 Hotel/Motel Sales $34,479,000,000 $635,700,000 $553,000,000 $433,600,000 $2,625,900,000 $890,300,000 $378,300,000 Other Sales $1,441,939,000 $33,737,000 $27,340,000 $23,917,000 $94,699,000 $23,321,000 $10,356,000 Total Sales $171,155,654,350 $3,654,275,190 $3,001,569,300 $2,337,831,540 $16,168,734,480 $3,142,671,120 $1,797,456,050 Employees (Full-time Equivalents) 1,596,005 31,420 24,440 18, ,881 29,741 18,940 Total Employees (Including Part-time) 2,059,952 40,611 31,550 24, ,977 38,384 24,408 Employee Compensation $30,094,166,000 $593,984,000 $468,277,000 $362,960,000 $3,208,118,000 $595,946,000 $349,247,000 Employee Compensation (Earnings Multiplier) 65,003,398,560 1,283,005,440 1,011,478, ,993,600 6,929,534,880 1,287,243, ,373,520 Property Tax $1,516,417,000 $29,705,600 $24,878,100 $19,138,000 $132,335,100 $33,984,800 $16,665,800 Sales Tax $3,588,081,153 $55,392,280 $59,804,640 $41,472,027 $567,228,177 $31,990,219 $46,148,160 Federal Fuel Tax $11,809,033,720 $280,048,760 $221,620,400 $187,511,560 $875,366,520 $187,221,480 $98,542,880 State Fuel Tax $10,549,641,690 $239,134,100 $230,154,000 $183,793,000 $746,069,400 $179,938,350 $103,552,100 State Lodging Tax $2,171,798,311 $38,142,000 $28,368,900 $17,344,000 $3,124,821 $78,346,400 $0 Local Lodging Tax $1,705,231,690 $25,428,000 $30,415,000 $28,747,680 $0 $26,709,000 $45,396,000 Appendix C Fueling American Prosperity Cost of Goods Sold $93,361,229,569 $2,119,850,524 $1,743,587,305 $1,373,162,504 $8,430,617,128 $1,524,730,744 $916,223,544 Number of Counties 1, Number of Truck Stops 1, Number of Truck Repair Facilities 2, Number of Fuel Stops with Food Number of Fuel Stops without Food 1, Number of Gasoline Stations with Food 2, Number of Gasoline Stations without Food 12, , Number of Food Establishments with Limited Fast Food 14, , Number of Food Establishments with Full Service 4, Number of Food Establishments with Other 21, , Number of Hotels Motels with Food 1, Number of Hotels Motels without Food 12, ,

42 Total U.S. Delaware Florida Georgia Idaho Illinois Indiana Gasoline Gallons 22,429,500,000 21,950, ,550,000 1,231,100, ,500, ,900, ,000,000 Diesel Gallons 31,483,630,000 8,360, ,220,000 1,511,040, ,220,000 1,140,500, ,240, The NATSO Foundation Gasoline Sales $29,494,605,850 $29,369,100 $1,178,193,150 $1,404,685,100 $264,844,500 $965,200,500 $611,037,000 Diesel Sales $41,180,789,500 $11,252,560 $1,264,290,300 $1,784,538,240 $607,567,120 $1,459,840,000 $1,019,428,480 Convenience Store Sales $18,542,550,000 $14,900,000 $728,200,000 $986,200,000 $182,100,000 $593,400,000 $410,600,000 Repair Service Sales $5,082,000,000 $6,000,000 $82,000,000 $142,000,000 $74,000,000 $228,000,000 $142,000,000 Restaurant Sales $40,934,770,000 $41,380,000 $1,762,450,000 $2,265,460,000 $326,750,000 $1,261,780,000 $948,660,000 Hotel/Motel Sales $34,479,000,000 $55,500,000 $1,655,700,000 $1,938,300,000 $298,400,000 $1,094,200,000 $901,900,000 Other Sales $1,441,939,000 $538,000 $45,276,000 $70,672,000 $18,696,000 $50,540,000 $35,482,000 Total Sales $171,155,654,350 $158,939,660 $6,716,109,450 $8,591,855,340 $1,772,357,620 $5,652,960,500 $4,069,107,480 Employees (Full-time Equivalents) 1,596,005 1,790 67,026 86,710 13,819 50,267 37,604 Total Employees (Including Part-time) 2,059,952 2,308 86, ,010 17,839 64,886 48,588 Employee Compensation $30,094,166,000 $36,038,000 $1,294,046,000 $1,645,136,000 $263,182,000 $950,124,000 $723,031,000 Employee Compensation (Earnings Multiplier) 65,003,398,560 77,842,080 2,795,139,360 3,553,493, ,473,120 2,052,267,840 1,561,746,960 Property Tax $1,516,417,000 $2,044,100 $67,614,200 $84,070,800 $13,281,300 $49,116,300 $38,850,800 Sales Tax $3,588,081,153 $0 $157,075,560 $138,573,280 $30,077,300 $134,424,360 $92,204,520 Federal Fuel Tax $11,809,033,720 $6,078,640 $401,818,880 $595,216,160 $141,429,680 $405,591,600 $286,442,560 State Fuel Tax $10,549,641,690 $6,887,700 $369,845,780 $205,660,500 $156,680,000 $376,668,500 $201,828,400 State Lodging Tax $2,171,798,311 $0 $87,752,100 $193,830,000 $11,936,000 $101,322,920 $54,114,000 Local Lodging Tax $1,705,231,690 $4,440,000 $99,342,000 $77,532,000 $20,888,000 $61,712,880 $45,095,000 Cost of Goods Sold $93,361,229,569 $62,847,030 $3,350,649,201 $4,408,502,109 $1,074,109,904 $3,151,579,105 $2,154,784,698 Number of Counties 1, Number of Truck Stops 1, Number of Truck Repair Facilities 2, Number of Fuel Stops with Food Number of Fuel Stops without Food 1, Number of Gasoline Stations with Food 2, Number of Gasoline Stations without Food 12, Number of Food Establishments with Limited Fast Food 14, Number of Food Establishments with Full Service 4, Number of Food Establishments with Other 21, Number of Hotels Motels with Food 1, Number of Hotels Motels without Food 12, How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses

43 The NATSO Foundation 40 Appendix C - State Tables of Services and Economic Activity for 2002 Total U.S. Iowa Kansas Kentucky Louisiana Maine Maryland Gasoline Gallons 22,429,500, ,950, ,900, ,550, ,400,000 87,100, ,950,000 Diesel Gallons 31,483,630, ,870, ,660,000 1,142,200, ,000, ,200, ,020,000 Gasoline Sales $29,494,605,850 $309,335,000 $332,370,600 $675,540,900 $743,251,600 $120,807,700 $402,984,600 Diesel Sales $41,180,789,500 $696,521,790 $631,937,920 $1,400,337,200 $1,184,572,000 $180,363,200 $245,887,370 Convenience Store Sales $18,542,550,000 $224,950,000 $221,200,000 $489,800,000 $497,800,000 $74,200,000 $212,300,000 Repair Service Sales $5,082,000,000 $130,000,000 $92,000,000 $82,000,000 $84,000,000 $26,000,000 $56,000,000 Restaurant Sales $40,934,770,000 $385,820,000 $461,720,000 $775,240,000 $782,980,000 $126,140,000 $520,210,000 Hotel/Motel Sales $34,479,000,000 $503,600,000 $473,700,000 $728,900,000 $561,200,000 $137,600,000 $315,400,000 Other Sales $1,441,939,000 $23,101,000 $20,998,000 $50,630,000 $41,660,000 $6,050,000 $9,926,000 Total Sales $171,155,654,350 $2,273,327,790 $2,233,926,520 $4,202,448,100 $3,895,463,600 $671,160,900 $1,762,707,970 Employees (Full-time Equivalents) 1,596,005 17,708 20,028 32,301 31,326 5,749 18,463 Total Employees (Including Part-time) 2,059,952 22,863 25,868 41,768 40,485 7,418 23,813 Employee Compensation $30,094,166,000 $355,100,000 $384,976,000 $621,711,000 $583,327,000 $111,108,000 $334,163,000 Employee Compensation (Earnings Multiplier) 65,003,398, ,016, ,548,160 1,342,895,760 1,259,986, ,993, ,792,080 Property Tax $1,516,417,000 $20,937,200 $19,984,000 $33,617,500 $28,195,100 $5,820,600 $14,874,000 Sales Tax $3,588,081,153 $38,193,550 $42,183,654 $83,860,200 $56,257,600 $11,619,500 $39,921,800 Federal Fuel Tax $11,809,033,720 $172,827,080 $162,034,640 $373,006,000 $334,753,600 $47,551,200 $99,663,680 State Fuel Tax $10,549,641,690 $166,585,750 $154,345,200 $237,113,000 $303,080,000 $48,878,000 $114,635,600 State Lodging Tax $2,171,798,311 $35,252,000 $29,843,100 $42,276,200 $0 $0 $23,024,200 Local Lodging Tax $1,705,231,690 $25,180,000 $23,211,300 $43,734,000 $61,732,000 $9,632,000 $15,770,000 Fueling American Prosperity Cost of Goods Sold $93,361,229,569 $1,268,243,743 $1,232,262,230 $2,552,334,376 $2,415,070,972 $380,652,244 $927,661,196 Number of Counties 1, Number of Truck Stops 1, Number of Truck Repair Facilities 2, Number of Fuel Stops with Food Number of Fuel Stops without Food 1, Number of Gasoline Stations with Food 2, Number of Gasoline Stations without Food 12, Number of Food Establishments with Limited Fast Food 14, Number of Food Establishments with Full Service 4, Number of Food Establishments with Other 21, Number of Hotels Motels with Food 1, Number of Hotels Motels without Food 12,

44 Total U.S. Massachusetts Michigan Minnesota Mississippi Missouri Montana Gasoline Gallons 22,429,500, ,350, ,450, ,550, ,250, ,800, ,200,000 Diesel Gallons 31,483,630, ,300, ,490, ,070, ,960, ,850, ,810, The NATSO Foundation Gasoline Sales $29,494,605,850 $441,762,650 $836,334,400 $539,137,200 $493,238,000 $773,539,200 $221,780,800 Diesel Sales $41,180,789,500 $311,157,300 $1,114,895,280 $790,413,450 $801,894,800 $1,218,902,700 $621,441,585 Convenience Store Sales $18,542,550,000 $229,300,000 $526,150,000 $331,550,000 $330,100,000 $517,950,000 $163,550,000 Repair Service Sales $5,082,000,000 $22,000,000 $102,000,000 $122,000,000 $60,000,000 $168,000,000 $80,000,000 Restaurant Sales $40,934,770,000 $506,340,000 $1,260,760,000 $844,430,000 $537,560,000 $1,033,570,000 $230,560,000 Hotel/Motel Sales $34,479,000,000 $453,700,000 $931,900,000 $605,900,000 $546,600,000 $812,600,000 $366,800,000 Other Sales $1,441,939,000 $11,060,000 $40,597,000 $27,231,000 $28,778,000 $43,445,000 $19,133,000 Total Sales $171,155,654,350 $1,975,319,950 $4,812,636,680 $3,260,661,650 $2,798,170,800 $4,568,006,900 $1,703,265,385 Employees (Full-time Equivalents) 1,596,005 19,75 46,932 31,837 23,156 41,215 12,743 Total Employees (Including Part-time) 2,059,952 25,459 60,602 41,080 29,939 53,252 16,451 Employee Compensation $30,094,166,000 $376,056,000 $869,631,000 $584,616,000 $449,900,000 $769,864,000 $257,355,000 Employee Compensation (Earnings Multiplier) 65,003,398, ,280,960 1,878,402,960 1,262,770, ,784,000 1,662,906, ,886,800 Property Tax $1,516,417,000 $18,914,300 $42,115,300 $27,179,500 $23,865,300 $37,724,900 $14,804,700 Sales Tax $3,588,081,153 $38,435,000 $115,770,420 $86,138,715 $66,950,660 $75,807,495 $0 Federal Fuel Tax $11,809,033,720 $109,525,600 $331,154,360 $216,142,280 $225,504,240 $346,950,600 $138,554,440 State Fuel Tax $10,549,641,690 $110,806,500 $252,589,000 $196,324,000 $187,166,640 $267,010,500 $167,003,775 State Lodging Tax $2,171,798,311 $30,851,600 $83,871,000 $35,142,200 $15,851,400 $73,702,820 $0 Local Lodging Tax $1,705,231,690 $25,860,900 $55,914,000 $39,383,500 $38,262,000 $34,372,980 $14,672,000 Cost of Goods Sold $93,361,229,569 $1,020,928,394 $2,610,001,423 $1,778,844,341 $1,624,790,724 $2,598,731,830 $1,006,765,284 Number of Counties 1, Number of Truck Stops 1, Number of Truck Repair Facilities 2, Number of Fuel Stops with Food Number of Fuel Stops without Food 1, Number of Gasoline Stations with Food 2, Number of Gasoline Stations without Food 12, Number of Food Establishments with Limited Fast Food 14, Number of Food Establishments with Full Service 4, Number of Food Establishments with Other 21, Number of Hotels Motels with Food 1, Number of Hotels Motels without Food 12, How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses

45 The NATSO Foundation 42 Appendix C - State Tables of Services and Economic Activity for 2002 Total U.S. Nebraska Nevada New Hampshire New Jersey New Mexico New York Gasoline Gallons 22,429,500, ,950, ,900,000 89,150, ,400, ,050, ,650,000 Diesel Gallons 31,483,630, ,130, ,420, ,710, ,560, ,900, ,070,000 Gasoline Sales $29,494,605,850 $226,224,050 $194,624,750 $118,658,650 $296,423,400 $351,067,500 $715,074,500 Diesel Sales $41,180,789,500 $507,284,030 $392,335,790 $163,562,050 $240,207,960 $577,169,400 $919,800,315 Convenience Store Sales $18,542,550,000 $159,350,000 $128,100,000 $74,450,000 $170,800,000 $226,400,000 $435,450,000 Repair Service Sales $5,082,000,000 $76,000,000 $52,000,000 $14,000,000 $38,000,000 $80,000,000 $70,000,000 Restaurant Sales $40,934,770,000 $243,180,000 $210,050,000 $147,130,000 $400,710,000 $341,910,000 $965,600,000 Hotel/Motel Sales $34,479,000,000 $323,300,000 $450,800,000 $139,800,000 $324,700,000 $460,600,000 $850,200,000 Other Sales $1,441,939,000 $16,259,000 $11,786,000 $5,883,000 $9,518,000 $20,100,000 $31,761,000 Total Sales $171,155,654,350 $1,551,597,080 $1,439,696,540 $663,483,700 $1,480,359,360 $2,057,246,900 $3,987,885,815 Employees (Full-time Equivalents) 1,596,005 11,761 11,836 5,859 15,180 15,850 38,611 Total Employees (Including Part-time) 2,059,952 15,191 15,290 7,556 19,538 20,463 49,777 Employee Compensation $30,094,166,000 $235,863,000 $255,526,000 $112,437,000 $283,854,000 $321,255,000 $727,935,000 Employee Compensation (Earnings Multiplier) 65,003,398, ,464, ,936, ,863, ,124, ,910,800 1,572,339,600 Property Tax $1,516,417,000 $13,298,000 $15,934,300 $5,866,900 $14,189,200 $18,948,800 $36,627,100 Sales Tax $3,588,081,153 $27,213,395 $26,125,840 $0 $37,141,680 $33,420,500 $60,112,440 Federal Fuel Tax $11,809,033,720 $124,082,520 $93,680,080 $45,856,840 $89,806,240 $159,088,800 $264,620,680 State Fuel Tax $10,549,641,690 $131,469,120 $112,044,300 $40,922,700 $50,427,600 $137,009,750 $255,794,675 State Lodging Tax $2,171,798,311 $27,480,500 $31,556,000 $0 $11,039,800 $25,333,000 $87,570,600 Local Lodging Tax $1,705,231,690 $19,398,000 $9,016,000 $11,184,000 $19,482,000 $23,030,000 $34,008,000 Fueling American Prosperity Cost of Goods Sold $93,361,229,569 $902,006,078 $722,558,438 $365,745,124 $757,572,341 $1,160,974,734 $2,152,168,167 Number of Counties 1, Number of Truck Stops 1, Number of Truck Repair Facilities 2, Number of Fuel Stops with Food Number of Fuel Stops without Food 1, Number of Gasoline Stations with Food 2, Number of Gasoline Stations without Food 12, Number of Food Establishments with Limited Fast Food 14, Number of Food Establishments with Full Service 4, Number of Food Establishments with Other 21, Number of Hotels Motels with Food 1, Number of Hotels Motels without Food 12,

46 Total U.S. North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Gasoline Gallons 22,429,500, ,950,000 99,650, ,150, ,200, ,150, ,750,000 Diesel Gallons 31,483,630, ,630, ,980, ,400, ,580, ,780,000 1,198,270, The NATSO Foundation Gasoline Sales $29,494,605,850 $941,858,950 $139,211,050 $1,123,402,500 $392,296,800 $456,079,050 $810,493,500 Diesel Sales $41,180,789,500 $1,305,332,870 $350,211,960 $1,234,934,400 $677,082,560 $648,030,520 $1,711,129,560 Convenience Store Sales $18,542,550,000 $597,450,000 $102,900,000 $651,400,000 $279,900,000 $272,200,000 $545,950,000 Repair Service Sales $5,082,000,000 $142,000,000 $96,000,000 $174,000,000 $138,000,000 $82,000,000 $206,000,000 Restaurant Sales $40,934,770,000 $1,351,790,000 $159,490,000 $1,721,330,000 $586,490,000 $688,130,000 $936,750,000 Hotel/Motel Sales $34,479,000,000 $1,316,800,000 $177,600,000 $1,354,500,000 $652,200,000 $655,000,000 $914,500,000 Other Sales $1,441,939,000 $45,319,000 $11,624,000 $44,040,000 $24,884,000 $21,844,000 $51,331,000 Total Sales $171,155,654,350 $5,700,550,820 $1,037,037,010 $6,303,606,900 $2,750,853,360 $2,823,283,570 $5,176,154,060 Employees (Full-time Equivalents) 1,596,005 55,607 8,147 63,633 24,889 27,749 40,583 Total Employees (Including Part-time) 2,059,952 71,833 10,524 82,211 32,128 35,773 52,399 Employee Compensation $30,094,166,000 $1,064,971,000 $156,408,000 $1,193,027,000 $487,554,000 $527,476,000 $780,208,000 Employee Compensation (Earnings Multiplier) 65,003,398,560 2,300,337, ,841,280 2,576,938,320 1,053,116,640 1,139,348,160 1,685,249,280 Property Tax $1,516,417,000 $55,500,400 $7,767,800 $58,791,900 $26,520,800 $27,334,900 $40,813,900 Sales Tax $3,588,081,153 $96,145,155 $18,500,700 $129,538,500 $46,317,330 $0 $104,401,860 Federal Fuel Tax $11,809,033,720 $369,308,520 $83,966,720 $382,085,200 $192,830,320 $178,173,920 $403,835,880 State Fuel Tax $10,549,641,690 $411,053,940 $77,412,300 $389,521,000 $131,205,200 $194,383,200 $527,760,430 State Lodging Tax $2,171,798,311 $105,344,000 $7,104,000 $106,328,250 $37,827,600 $58,950,000 $64,015,000 Local Lodging Tax $1,705,231,690 $52,672,000 $8,880,000 $77,883,750 $30,001,200 $0 $54,870,000 Cost of Goods Sold $93,361,229,569 $2,974,295,060 $616,150,379 $3,240,536,777 $1,428,676,029 $1,464,787,366 $3,107,165,967 Number of Counties 1, Number of Truck Stops 1, Number of Truck Repair Facilities 2, Number of Fuel Stops with Food Number of Fuel Stops without Food 1, Number of Gasoline Stations with Food 2, Number of Gasoline Stations without Food 12, Number of Food Establishments with Limited Fast Food 14, Number of Food Establishments with Full Service 4, Number of Food Establishments with Other 21, Number of Hotels Motels with Food 1, Number of Hotels Motels without Food 12, How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses

47 The NATSO Foundation 44 Appendix C - State Tables of Services and Economic Activity for 2002 Total U.S. Rhode Island South Carolina South Dakota Tennessee Texas Utah Gasoline Gallons 22,429,500,000 40,300, ,500, ,000, ,650,000 2,085,250, ,550,000 Diesel Gallons 31,483,630,000 39,860, ,670, ,510, ,960,000 2,664,370, ,720,000 Gasoline Sales $29,494,605,850 $57,346,900 $632,835,000 $195,003,000 $1,005,224,450 $2,656,608,500 $328,662,600 Diesel Sales $41,180,789,500 $58,355,040 $1,185,824,220 $379,837,120 $1,234,185,520 $3,386,414,270 $524,563,120 Convenience Store Sales $18,542,550,000 $31,100,000 $457,750,000 $130,550,000 $634,800,000 $1,683,650,000 $205,600,000 Repair Service Sales $5,082,000,000 $10,000,000 $96,000,000 $96,000,000 $160,000,000 $566,000,000 $60,000,000 Restaurant Sales $40,934,770,000 $66,490,000 $825,800,000 $175,780,000 $1,287,530,000 $3,935,390,000 $412,750,000 Hotel/Motel Sales $34,479,000,000 $38,300,000 $920,700,000 $303,100,000 $1,392,500,000 $2,907,100,000 $320,400,000 Other Sales $1,441,939,000 $1,968,000 $41,961,000 $12,903,000 $45,798,000 $123,781,000 $17,436,000 Total Sales $171,155,654,350 $263,559,940 $4,160,870,220 $1,293,173,120 $5,760,037,970 $15,258,943,770 $1,869,411,720 Employees (Full-time Equivalents) 1,596,005 2,444 34,853 9,383 53, ,857 16,163 Total Employees (Including Part-time) 2,059,952 3,150 45,061 12,101 69, ,507 20,874 Employee Compensation $30,094,166,000 $43,940,000 $689,133,000 $194,668,000 $1,055,655,000 $2,722,853,000 $301,755,000 Employee Compensation (Earnings Multiplier) 65,003,398,560 94,910,400 1,488,527, ,482,880 2,280,214,800 5,881,362, ,790,800 Property Tax $1,516,417,000 $1,869,200 $38,774,000 $12,287,100 $57,515,800 $132,406,300 $14,962,600 Sales Tax $3,588,081,153 $7,669,060 $71,075,550 $16,609,320 $148,968,960 $397,455,723 $33,397,728 Federal Fuel Tax $11,809,033,720 $17,141,040 $323,215,480 $96,584,440 $383,917,840 $1,033,792,280 $139,168,880 State Fuel Tax $10,549,641,690 $23,246,400 $232,187,200 $94,712,200 $324,183,200 $949,924,000 $154,171,150 State Lodging Tax $2,171,798,311 $0 $46,035,000 $9,093,000 $101,652,500 $261,639,000 $18,743,400 Local Lodging Tax $1,705,231,690 $4,596,000 $64,449,000 $18,186,000 $83,550,000 $174,426,000 $15,219,000 Fueling American Prosperity Cost of Goods Sold $93,361,229,569 $153,558,437 $2,309,625,118 $720,474,067 $2,980,729,481 $8,231,603,351 $1,088,621,115 Number of Counties 1, Number of Truck Stops 1, Number of Truck Repair Facilities 2, Number of Fuel Stops with Food Number of Fuel Stops without Food 1, Number of Gasoline Stations with Food 2, Number of Gasoline Stations without Food 12, , Number of Food Establishments with Limited Fast Food 14, , Number of Food Establishments with Full Service 4, Number of Food Establishments with Other 21, , Number of Hotels Motels with Food 1, Number of Hotels Motels without Food 12, ,

48 Total U.S. Vermont Virginia Washington West Virginia Wisconsin Wyoming Gasoline Gallons 22,429,500,000 77,300, ,100, ,800, ,700, ,200, ,300,000 Diesel Gallons 31,483,630,000 86,200, ,730, ,480, ,860, ,330, ,300, The NATSO Foundation Gasoline Sales $29,494,605,850 $106,519,400 $945,951,000 $798,019,200 $284,315,850 $443,491,200 $290,064,500 Diesel Sales $41,180,789,500 $127,489,800 $1,052,309,520 $839,044,240 $395,296,850 $983,264,660 $906,302,300 Convenience Store Sales $18,542,550,000 $61,500,000 $575,450,000 $446,700,000 $169,000,000 $296,250,000 $248,100,000 Repair Service Sales $5,082,000,000 $6,000,000 $88,000,000 $144,000,000 $46,000,000 $98,000,000 $72,000,000 Restaurant Sales $40,934,770,000 $60,970,000 $1,223,160,000 $1,276,400,000 $379,270,000 $545,690,000 $223,620,000 Hotel/Motel Sales $34,479,000,000 $114,600,000 $1,149,200,000 $689,300,000 $282,200,000 $496,200,000 $346,700,000 Other Sales $1,441,939,000 $4,180,000 $40,539,000 $28,324,000 $12,868,000 $30,149,000 $30,500,000 Total Sales $171,155,654,350 $481,259,200 $5,074,609,520 $4,221,787,440 $1,568,950,700 $2,893,044,860 $2,117,286,800 Employees (Full-time Equivalents) 1,596,005 3,730 48,910 43,472 14,188 22,929 12,947 Total Employees (Including Part-time) 2,059,952 4,814 63,168 56,003 18,334 29,620 16,747 Employee Compensation $30,094,166,000 $77,123,000 $938,104,000 $772,357,000 $264,368,000 $435,784,000 $264,016,000 Employee Compensation (Earnings Multiplier) 65,003,398, ,585,680 2,026,304,640 1,668,291, ,034, ,293, ,274,560 Property Tax $1,516,417,000 $4,608,200 $48,533,100 $33,408,600 $13,060,700 $22,471,200 $15,208,900 Sales Tax $3,588,081,153 $6,632,500 $86,721,705 $123,202,560 $36,428,280 $48,504,450 $22,968,800 Federal Fuel Tax $11,809,033,720 $35,256,000 $342,640,520 $249,236,320 $107,050,640 $228,753,320 $220,384,400 State Fuel Tax $10,549,641,690 $37,872,000 $263,924,300 $267,784,400 $125,572,140 $276,966,690 $134,344,000 State Lodging Tax $2,171,798,311 $0 $91,936,000 $39,979,400 $8,466,000 $33,741,600 $13,868,000 Local Lodging Tax $1,705,231,690 $10,314,000 $40,222,000 $44,804,500 $16,932,000 $24,810,000 $13,868,000 Cost of Goods Sold $93,361,229,569 $280,198,251 $2,666,278,462 $2,287,401,403 $883,880,292 $1,746,643,359 $1,392,649,222 Number of Counties 1, Number of Truck Stops 1, Number of Truck Repair Facilities 2, Number of Fuel Stops with Food Number of Fuel Stops without Food 1, Number of Gasoline Stations with Food 2, Number of Gasoline Stations without Food 12, Number of Food Establishments with Limited Fast Food 14, Number of Food Establishments with Full Service 4, Number of Food Establishments with Other 21, Number of Hotels Motels with Food 1, Number of Hotels Motels without Food 12, How Rest Area Commercialization Will Devastate the Economic Contributions of Interstate Businesses

49 Fueling American Prosperity References 2002 Restaurant Industry Operations Report, National Restaurant Association, Deloitte & Touche, Desktop Data Files, County Projections, Woods & Poole Economics, Washington, DC, January American Association of State Highway and Transportation Officials, Transportation: Invest in America, Washington, D.C., 2002, p. 1. American Petroleum Institute, Industry Statistics, Impact of Room Tax Increases on the Lodging Industry, prepared by American Economics Group, Inc. in association with the American Hotel Foundation, Trend & Host Report, Smith Travel Research, Hendersonville, TN, July US Department of Commerce, Bureau of Economic Analysis, National Income and Product Accounts Table, US Department of Transportation, Federal Highway Administration, Highway Performance Monitoring System Analytical Process, Washington, DC. US Department of Transportation, Federal Highway Administration, Monthly Motor Fuel Reported by States, The NATSO Foundation 46

50 The NATSO Foundation 1199 North Fairfax Street, Suite 801 Alexandria, VA (703) Fax (703)