Edition: July 2005



 The Connection

 By Patrick Osio



Fuzzy Logic Follows Border Clarity
After proving crossing delays cost our economy
$1.28 billion, Sandag proposes a taxing solution

Discussions on economic disruptions caused by border crossing delays have been difficult for many San Diegans to understand because of a lack of actual figures supporting the negative economic impacts on all San Diego. To get a clearer picture of the issue, the San Diego Association of Governments commissioned a study on cross border personal trips for work, vacation, shopping or recreation. Over a four-month period, interviewers contacted 3,603 northbound border crossers (residents of the United States and Mexico) at the San Ysidro, Otay Mesa and Tecate ports-of-entry.

The effort provided the most comprehensive analysis on financial losses from visitors who forgo their trips. The study also estimated direct spending, indirect spending (businesses that are direct suppliers) and induced spending (changes in business output, employment, income and tax revenues) impacts.

The survey showed the average daily delay is 45 minutes. It is not unusual for delays to exceed an hour, or at peak times, two hours.)

A partial summary of the Sandag study reveals the following:

Direct impacts: “San Diego County loses more than 8 million trips a year that may result in $1.28 billion in additional revenues, after adjusting for the revenue gains because of the local forgone trips to Mexico. The retail sector is affected the most as it represents more than 90 percent of the impacted sectors. In addition, more than 3 million potential working hours in San Diego County are spent in delays at the border, averaging about 45 minutes per work trip, which may result in $42 million in wages lost. The overall impact at the state level, given that 5 percent of the trips are headed outside the San Diego region, is over $1.32 billion in addition to the $44.3 million in income loss for work trips.”

Indirect and induced impacts: “When accounting for the indirect and induced impact of the estimated revenue losses, the impact is more significant as it exceeds $2.2 billion in production losses (which is about 1.2 percent of the county total product) together with more than 31,000 jobs lost (which is about 1.7 percent of the San Diego County labor force), mainly in the retail sector (which represents about 13 percent of the labor force in the county retail sector jobs.). Similarly, at the state level the loss exceeds $2.4 billion in output (which is about 0.1 percent of the state overall product) and over 31,000 jobs lost (which is 0.2 percent of the state labor force). When accounting for uncertainty surrounding the estimating assumptions, the risk analysis reveals that with an 80 percent confidence interval, the loss in output for San Diego County is between $2 billion and $2.5 billion, and the job loss is between 28,000 and 35,000 jobs.”

So the Sandag study clearly provides evidence that border crossing delays cause billions of dollars in losses and thousands of jobs throughout the San Diego region as well as in other parts of the state.

But Sandag went one step too far with this survey when it proposed a potential partial solution to border delays; “A new point of entry may be built in East Otay Mesa that would provide a faster way to cross the border for people who are willing to pay a fee. If it costs three dollars to use this point of entry each time you crossed the border into the United States, would you use it?”

The results showed that 59.4 percent would pay always, 14.2 percent sometimes and 26.5 percent would decline.

But “faster” was not defined. Is it seconds, 2 to 3 minutes or 5 to 10 minutes? To use this port, one would travel through the congested Tijuana traffic for 30 to 40 minutes to reach the “fast” lanes. Were the program to succeed, how long would it be before those lanes would be as congested as other lanes? Since a great deal of the delay is caused by inspection of cars, will this practice be less frequent at the paid crossing?

SENTRI lanes in San Ysidro and Otay Mesa are supposed to be “fast” crossing lanes. To date more than 50,000 people have gone through the application, interview and background check ordeal and paid over $100 for access to those “fast” lanes that at times are as congested as other lanes. So why not open more such lanes in all ports?

A few years ago, a test was made at the San Ysidro port keeping all the lanes open 24 hours – amazingly the crossing time was less than 10 minutes that one day. Why not work on keeping all lanes open all day?

The more serious problem with Sandag’s introduction of the pay-to-cross idea is politicians and bureaucrats will use the results to introduce the idea that crossers don’t mind paying to cross with a “promise” that the money will be used to “speed” crossings. So start charging now, and maybe some time in the future things will improve.

On top of the delays, border crossers would pay an admission fee that would make the SENTRI flat fee a bargain. If SENTRI looks cheap, it would attract more applicants to that program and require more lanes be dedicated. That in turn would squeeze the number of lanes available to those who don’t want to pay. Overall, without more capacity or added hours, congestion will remain. It will just be more profitable for government programs.

Sen. Dianne Feinstein once proposed charging a toll at the border. Once she gets her hands on the Sandag report, look for this concept to float again. Never mind the other findings about economic loss from delays; she won’t even look at those.

Patrick Osio Jr. can be reached at posiojr@sandiegometro.com. The veteran consultant also has issued The Mexican Perspective, an intensive primer on business culture and protocol. Copies are available at http://www.hispanicvista.com/sales/book_sale.htm.


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