We can’t afford not to spend money on Transportation – RailPAC: Rail Passenger Association of CA & NV

Opinion by Noel T. Braymer

When people in the San Joaquin Valley talk about the High Speed Rail Project there is very little talk about how quickly they will be able to get to Los Angeles or San Francisco or about the cost of the project. If you are a farm owner in the San Joaquin Valley the issue is about what impact construction of High Speed Rail will have on their property. For most everyone else the issue is how many jobs High Speed Rail will create. No wonder considering that the recorded unemployment in the San Joaquin Valley ranged from a ‘low” in Madera County of 15.3 percent to a high of 18.9 percent in Merced County compared with a Nation average unemployment of 9.7 percent as of July 2010. Jobs or lack there of is the most pressing issue for most people in this county, not that you would see it on TV news.The United States has a large backlog of construction projects in the trillions of dollars. We don’t need many new roads, but the roads we have are in poor shape, particularly the bridges on many of these existing roads.

Transportation is at the heart of an healthy economy. Any study of geography shows that major cities are always at major junctions of transportation. This includes harbors, rivers. rail and roads.California voters have shown their support for transportation spending with the passage in 2006 of Prop. 1B for almost 20 billion dollars for transportation construction with bonds; with just over half for highway construction and over 20 percent for rail project. Again in 2008 the public passed Prop 1A with almost 10 billion dollars of bonds for High Speed Rail and improved rail service state wide. Also in 2008 several counties in California passed by over 2/3 majorities increases to local sales taxes for improved transportation. In Los Angeles County the sale tax was increased to a full 1 percent to help pay for major construction projects, much of it for rail transit. Much of this support for transportation projects in California was both recognition of the terrible shape of our transportation infrastructure and the stimulus effect of construction on the economy by the voters.

Congress recently proposed cutting Federal spending on Transportation by 30 percent. At the same time there is also bi-partisan support for the creation of a Transportation Infrastructure Bank. In the case of Los Angeles County this bank will be good news. Los Angeles has a program called 30/10. Los Angeles’ goal is to build 30 years of projects in 10 years while paying for them over the next 30 years with borrowed money. The need is now and construction cost most likely will increase in the next 30 years. The problem with a bank is you need money to pay it back.The problem for most local government is their tax revenues are way down. The reason for that is the economy is down because most people have less money to spend. It will be difficult for many local governments to qualify for loans no matter how important the projects are. In those states that have cut spending unemployment has gone up for both public and private sectors.The local economies and tax revenues as a result have sunk. By comparison states that have increased spending have seen job and economic growth. In 2008 Moody’s the Wall Street rating service calculated that for every dollars spent on infrastructure that the economy would get a benefit of $1.59. For personal income tax cuts the amount was 29 cents, for corporate income tax cuts it was 30 cents and for capital gains cuts the figure was 37 cents.

Spending money for infrastructure is nothing new during bad economic times.When we think of the Hoover Dam many think of it as a great engineering achievement from the depths of the great depression of the 1930’s.The reason it is called the Hoover Dam is because the project was started during the Administration of Republican Herbert Hoover. Many of the public works projects built by the Roosevelt Administration had its roots during the Hoover Administration. Historically tax supported public works projects like transportation have been a non-partisan issue and should continue to be.