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Arkansas Business and Economic Review. 28(1):13-19 (Spring 1995)
Transportation, and Economic Growth
Will Miller
Kim Fendley Much scholarly attention has been paid to determining what attracts businesses to a community. Previous researchers in this journal (Veasey and Oots, 1991) have surveyed Arkansas community business, governmental and education elites to determine what effect their beliefs have on growth. This is important research, but in some sense new business interests and the local elite are only two legs of a three legged stool. The third leg, necessary for stable and sustained growth, consists of the residents of the community who, through the normal electoral process or through "ballot box planning," can provide support for growth or stop projects cold. As Schneider has argued, residents of the community need to see significant payoffs in their quality of life if they are to support continued growth (Schneider, 1992). Northwest Arkansas is one of the fastest growing regions in the state of Arkansas. For purposes of this study, Northwest Arkansas consists of the Fayetteville-Springdale-Rogers MSA (Metropolitan Statistical Area) which includes all of Benton and Washington counties. Between 1970 and 1990 there was a 46 percent increase in population in Washington County and a 93.1 percent increase in Benton County. The MSA enjoyed a 65 percent increase during the period. Estimates are that the MSA will have increased another 8% by 1995 (Arkansas Institute for Economic Advancement, May, 1993). Personal income is derived from a diverse economy. In 1992, employment in retail trade accounted for 17.8 percent of income in the MSA. Services accounted for 16.5 percent. Non-durable goods manufacturing was 15.5 percent and state and local government was 12.9 percent (Bureau of Economic Analysis, May, 1994). The estimated unemployment rate in 1994 was 2.7 percent (Labor Marker Information, 1995). Northwest Arkansas has a strong and diversified economic base with the headquarters for Wal-Mart, Tyson Foods, and J.B. Hunt (trucking) located in the area. Other major contributors include Cargill, Campbell Soup, Levi Strauss, Washington Regional Medical Center, the Veteran's Hospital, and the University of Arkansas. Northwest Arkansas has also been nationally recognized for its quality of life. Money magazine rated Fayetteville (located in Washington County) favorably on a quality-of-life scale (Smith and Nance-Nash, 1993). Still, there is disagreement among business leaders, other community and political leaders and neighborhood residents concerning the shape of future development. Plans for growth are not without dispute. For example, Fayetteville continues to make bond payments for an incinerator that political leaders wanted but citizens never allowed to be built. Similarly, a proposed regional airport was recently threatened by a citizens' initiative vote in 1993. In the Spring of 1994 the second in a series of studies was conducted by the authors to examine citizens' feelings about growth and to set a baseline for residents' perceptions of quality of life as growth continues. Questionnaires were mailed to one thousand randomly selected registered voters in Benton and Washington counties. To encourage the response rate, the Dillman method was used with multiple follow-ups (Dillman, 1978). With a response rate of nearly 70 percent, the results from this survey are indicative of the opinions and feelings of registered voters in these counties. Nearly 120 questions were asked on a wide range of issues including crime, the environment, transportation ,and job satisfaction. A portion of the findings will be discussed in this article. Transportation and Economic Growth: Historically, the citizens of Northwest Arkansas have been ambivalent in their feelings about a new regional airport. In 1969 a proposal was made for such an airport and was submitted to the voters of the two counties. Washington county passed the issue, but Benton county defeated it. Yet with enplanements at Fayetteville's Drake Field increasing at twice the national average, discussion of a regional airport began to make its way back onto the agenda (Airport Facts, 1993). Like any complex policy issue, the idea of a regional airport has changed and evolved over the last four or five years. The primary sponsor of the proposed regional airport is an association of regional business and government elites (the Northwest Arkansas Council). Many of the association's members were also members of the newly created Airport Authority which first proposed a large regional cargo airport capable of landing large commercial cargo jets. The Federal Aviation Administration (FAA) doubted the need for the project and forced a change in design from a cargo airport to a smaller airport with a passenger emphasis (Element 1: Feasibility Report, Airport Authority, 1991 and FAA Response).
Respondents who supported building a new regional airport or building a regional airport along with the expansion of existing local airports tended more often to disagree with the proposition that the new regional airport will cause taxes to rise and overload public services. Those responding favorably to construction of the regional airport were also likely to have the opinion that the new airport will bring new jobs for local residents. However, the pattern reversed for respondents who said they did not support the regional airport (want only local airport development or no airport development). These respondents more often tended to agree with the proposition that taxes will increase and public infrastructure will be overloaded. They also tended to disagree that the new airport and highway facilities will mean more jobs for local people. As in the Fall 1993 survey, the majority of respondents in the 1994 survey supported a new regional airport. The more recent survey shows, however, that there are still some airport planning questions not settled. By combining the questionnaire responses favoring "building a new airport and improving local airports" with "improve local airports only," this shows that 64 percent of the respondents favor improving local airports. So, while it is true that a large majority of the respondents want a new regional airport, it is also true that a majority of the respondents want to improve local airports. At the time of the 1994 survey, the Federal Aviation Authority had already voiced concern about the potential for competition from local airports that might threaten the success of a new regional airport. Given the discussions in some municipal government bodies and the majority of respondents' support for local airport development, this is an area of policy development that became even more important as a policy issue. Copies of the survey results were sent to the FAA during the FAA's open comment period. This may have been at least one motivation for the FAA (in August of 1994) to insist on a non-competition agreement with all local municipal governments operating airports. The agency responsible for raising bond financing has joined the FAA in calling for such an agreement. The plan was that each government was to sign an agreement to give up any air passenger service if the new regional airport is to open. The agreement was rewritten when it was discovered that it contradicted the FAA's own regulations. Since Fayetteville has received federal funds to operate their local airport (Drake Field), it could not restrict access. A new, less restrictively worded agreement was signed by several local governments. Fayetteville has the most to lose. Should Drake Field close, the City Council members must be prepared to deal with the loss of several million dollars in airport revenue as well as an undetermined reduction in the amount of airport-related spending. In a year in which several council members and the mayor were up for reelection, the 64 percent who had an opinion and wanted to improve local airports had to be considered. Calls for a citizen vote on the closing of Drake Field in Fayetteville are troublesome for the promoters of a regional airport. Regional airport supporters insisted that the agreement must be signed quickly in order to secure the necessary grants from the federal government. In the end a revised agreement only committed Drake Field to refrain from "soliciting air service" in competition with the regional airport. (Northwest Arkansas Times, 1994.) Citizen opinion about local airports was certainly a factor in this negotiated settlement. To assess the frequency that respondents use airports in various locations, respondents were asked to indicate how often during the past five years they had flown in or out of various airports. This will only provide a partial indication of airport usage, because non-residents were not surveyed. However, it provides a good indicator of how our respondents feel they will use airport services. Fifty-three percent of the respondents had flown in or out of airports in Northwest Arkansas with 45 percent of these flying yearly. Of those who flew, airports in Northwest Arkansas were the airports used most often. Forty-one percent of the respondents had flown into or out of Oklahoma airports, again with yearly the largest category at 39 percent. Twelve percent used Arkansas airports outside Northwest Arkansas, with 11 percent of this number flying yearly. Finally, 9 percent of the respondents used Missouri airports yearly. The great majority of users of airport services fly perhaps a few times a year or not at all. In summary, some form of airport improvements was chosen as the most popular option in airport planning by most respondents. A minority (3 percent) of the people opt for no new airport developments of any kind. Given the air travel patterns, it might be that most respondents want airport development for other reasons, perhaps to bring better jobs. In terms of airport development options, there is majority support for a regional airport. The policy question that remains as the most interesting is whether there should be continued development of local airports along with a new regional airport, or if local airports should give up their scheduled passenger business to a new regional airport. Other responses concerning development issues contained some surprises. When respondents were asked about the seriousness of problems in Northwest Arkansas, traffic was ranked third. Half of all respondents say they drive on Highway 71 business daily. One might have expected, considering all the discussions about new highways and roads, that traffic would have ranked higher. Yet the respondents ranked landfills and population growth as first and second in terms of serious problems. Each is related to increased economic and population growth. Crime, contrary to what might be expected, ranked only fourth in terms of problem seriousness.
Regulating Growth and Protecting the Quality of Life: Yet respondents want growth. They believe that small businesses in the area will benefit from growth. Forty percent want local leaders to do more to encourage growth. Forty percent were neutral and eighteen percent disagree that local leaders should promote growth.
Only 25 percent of our current survey's respondents felt satisfied with local elected officials. Thirteen percent of respondents felt local government officials cared what they thought. Ambiguous attitudes about growth may be the result of uncertainly about having a voice in community affairs and fear of the threat to quality of life from rapid growth. The lobbying voice of the chambers of commerce and the regional growth coalition is guaranteed by the resources of these groups. Their vision of the future of Northwest Arkansas is well-represented in public debate. Many respondents to our surveys seem to fear that: 1) this vision may not be consistent with their vision for the future of their community; and 2) that they can not hold decision-makers accountable. Summary: The recent experience in Northwest Arkansas that we have reported is consistent with Kumcu and Vann's suggestion that there are "remedies the accountability problem through democratization of managerial macromarketing processes within the socio-economic development context..." (Kumcu, p. 52, 1991). Stated more simply, to avoid conflict, lawsuits, and angry citizen initiatives, the voices of a variety of citizen interests must be heard and considered (see Calavata, 1992). In this way a growth policy can be developed that is both broadly based and broadly rewarding. References
Airport Facts. Northwest Arkansas Council. (1993).
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The first survey conducted in Fall 1993 found that a majority (54 percent) of respondents supported the construction of a regional airport. The second survey conducted in 1994 was designed, among other things, to further explore the public's preferred policy options concerning the broader question of airport construction and improvement in Northwest Arkansas. When given five options on airport planning, 34 percent of our sample of registered voters in Northwest Arkansas said "build a new regional airport." (See Figure 1.) Another 25 percent said to both build the regional airport and improve local airports. Almost a third (30 percent), said they think it is best if we improve local airports but do not build a regional airport. Three percent chose no new airport development and about 8 percent had no opinion.
Several questions asked for responses indicating general feelings about growth. Respondents were divided in their responses when asked if rapid growth was a sign of community well-being. Most felt that increased growth would mean higher taxes and would create problems for people already living here. There was uncertainty and division about whether infrastructure, tax, and environmental costs could be justified. The majority (59 percent) felt that growth would most benefit bankers, real estate interests and land owners. Finally, most (56 percent) felt that environmental concerns should outweigh development concerns. (See Figure 2.) Harless has suggested that citizen involvement with local government environmental advisory boards, though not always friendly to rapid development, may address the environmental concern effectively (Harless, 1992).
The key to understanding this mix of both fear and encouragement of growth may be in understanding that respondents do not want growth of just any kind, or at any cost. Figure 3 illustrates that only 18 percent agree their community is doing a good job regulating growth. They don't want just any new jobs, but rather indicate a desire for higher end better paying jobs. Our Fall 1993 survey asked what kinds of jobs respondents most desired. It is interesting to compare these results with the survey of community leaders statewide conducted by Veasey and Oots. The leaders thought the greatest opportunities for expansion were in light manufacturing (30.9 percent), agriculture and food processing (25.5 percent) and tourism (16.1 percent). Our survey found citizens in Northwest Arkansas wanted development most in high-technology, education and agriculture. Food processing was at the bottom of their list of preferences. It is also interesting to note here that the Southern Growth Policies Board has found that high-technology firms rely heavily on good air transportation (Goetz, 1992).