New report finds SB-1 will pump $182.6 billion into California economy over next decade

Senate Bill 1 will add $182.6 billion and support more than 682,000 jobs in the next decade, according to a new report released this week by the American Road and Builders Assn. The report is posted above or you can find it here.

As many of you know, SB 1 was approved by the Legislature last year and signed into law by Gov. Jerry Brown. The bill raised the state gas tax (for the first time in 23 years) and state vehicle fees and will supply a perpetual source of funding to fix California roadways, improve transit and build walking and biking projects.

Metro is set to receive about $1.8 billion in state funds that are heavily dependent on SB-1 to help build a variety of road and transit projects, including the Gold Line extension to Claremont and Montclair, the Orange Line Improvements Project, the West Santa Ana Branch Corridor and the Green Line Extension to Torrance. On the highway side, SB-1 will help funds truck lanes and improvements on the 5 freeway in the Santa Clarita Valley, upgrades to the 71 freeway in Pomona and rebuilt junctions of the 605/91 and the 57/60 freeways. Without the SB-1 funding, Metro will have to find other monies.

As for the above report, here are some excerpts:

•In Los Angeles County, SB 1 will generate $29.2 billion in economic activity and user benefits over 10 years. This includes $6.8 billion in savings for drivers, transit riders and businesses, and $18.0 billion in economic output. In addition, the increased investment will create or support over 9,000 jobs per year, totaling 90,161 job-years over 10 years; these workers will earn $4.3 billion. More L.A. County specific numbers are here.

•Across the state, SB 1 will support the repair, repaving and reconstruction of over 84,000 lane miles on nearly 19,000 miles of roadway, including work on over 18,300 lane miles of urban interstate, and 7,000 lane miles of rural interstate over 10 years.

•With improved conditions, drivers will spend less money on fixing their cars and trucks. Drivers will save an average of $818 million per year in operating costs, adding up to $8.2 billion over 10 years.

•Better roads also mean safer roads. This adds up to an average of $58 million per year in additional safety benefits, or $584 million over 10 years. As crash, injury and fatality rates decline, there will be fewer costs associated with injuries, fatalities and property damage.

•Additional investment under SB 1 will enable the replacement of an additional 556 state and local bridges in the first five years of the program. This will result in 387 fewer structurally deficient or functionally obsolete bridges.

•In Sales and output by California businesses in all sectors will increase by $11 billion each year, totaling $111.8 billion over 10 years. This additional investment will support or create an additional 68,203 jobs on average each year, adding up to 682,029 job-years over 10 years. n Those workers will earn an average of $3.3 billion per year, resulting in $32.6 billion in additional earnings over 10 years.

•Support or create an additional 68,203 jobs on average each year, with 77 percent of the employment outside of the construction industry, including an estimated 13,964 jobs in transportation and warehousing, 7,466 jobs in other services, 4,308 jobs in retail trade and 3,867 jobs in real estate and rental and leasing. This will add up to a total of 682,029 jobyears supported or created by additional SB 1 spending over the next 10 years.

Here are a couple of pages from the report on the cost of traffic congestion.

4 replies

  1. After November there will be no SB1. it WILL be repealed by the voters. If things are done proper and the looted money from our gas and licence taxes are used for highways and transit not to the general fund or other uses including retirement, we will have more than what was lost from SB1.

  2. 1 OF 2 — It looks like a number of people spent many hours compiling all of this data. You may not be looking at the “big picture,” which is, “What is being delivered that is relevant to ordinary people’s everyday lives?” An economy must fundamentally exist to satisfy the needs and wants of ordinary people.

    The pie chart, “Additional California Jobs Supported/Created by SB 1 Investment” is telling because manufacturing is only 5% of the pie. What should be the most relevant category is treated as nearly irrelevant. Some of the category definitions are troubling. Why is Waste Management mixed with Administrative Services? One is trash disposal, the other is bureaucracy. Why is health care mixed in with social services? Everybody who sees a doctor is not on Medi Cal. Accommodation and Food Services sounds like Section 8 or government housing and EBT. If so, the 4% is eye opening by its size!

    Is bureaucracy marbled into the categories? Are insurance and banking bureaucracies part of the 3%? Is health care bureaucracy buried within health care?

    You have to understand that what ordinary people can use to improve their standard of living depends very heavily on what is outputted. While infrastructure is important, it should not be a dominant pathway for investment capital, or else it steers us in a direction of, “Johnny doesn’t have decent shoes, but we sure have a beautiful looking freeway.” The lesson was even sharper in the former Soviet Union, which infamously directed its capital towards fueling its side of the arms race vs. the United States. Russians were really angry that they could not have goods that were available in the Western Bloc. We Californians are certainly not near that point, but you also have proven that we output way too much that ordinary people don’t take home with them.

    The percentages in the left side of the pie chart are too big. Administrative and Waste Management ought to be on the order of 1%. We don’t need to have so many people working in real estate sector. It just forces ordinary people to pay more for housing. Why is construction 24%? Do you realize that the output bypasses many working class people? These are mostly, gargantuan high rise buildings, with owners who may be rich foreigners. Then there are the safety net items. When your safety net is large and always overflowing with people, your society is getting poorer, not richer.

  3. 2 OF 2 — Ordinary people are not allowed to decide with their buying habits and personal preferences how capital should be allocated. Government officials do it for them.

    For instance, UC Irvine spent huge amounts of money to change the original landscape of the south side of campus where Engineering and Physical Science buildings are located. Taxpayers and parents of UCI students pay year after year for these improvements that look a lot more like a glamour project than truly important change. Top-down decision making by people who want to be kings and queens decided to push this project ahead. Why not? They didn’t pay for it out of their own pockets.

    You should not assume that just because you can project big numbers for the near future that the capital allocated by government will make most Californians happier. 40% of Californians surveyed this year have trouble making ends meet.

    If you understood that a Free Market is one where the combined decisions of ordinary people drive capital allocation, you would realize that we are making way too many skyscrapers and way too few goods that ordinary people use. By relying on other countries to make goods for us, we are empowering business owners in those countries to buy up our real estate. This is why I suspect that many coming skyscrapers are going to be either foreign-owned, or owned by a corporation opaquely controlled by rich foreigners.

    As for fixing our roads, the long-running 18 cent per gallon gasoline tax was supposed to do that. The money was diverted. Your enormous report that is supposed to prove we should vote for more tax completely avoids mention that road repair would be fully funded already if politicians weren’t such smart-alecks. Furthermore, President Obama spent at least $787 billion on infrastructure, promising road repair in 2009. Why should we believe that more taxes will finally fix our roads when repair has been funded twice, with little real result?