Every $1 in California Transportation Spending Equals $4.30 in Gains, Report Finds

A first-of-its-kind report finds that upcoming spending on federal, state, and local infrastructure will generate nearly $200 billion in economic activity in California, annually, over the next decade, as well as support 700,000 jobs per year.

According to the report, in the next 10 years government investments in California’s transportation infrastructure will grow from $40.4 billion in 2021 to $52.6 billion in 2030. This equates to a return of $4.30 in economic activity for every $1 spent on the transportation system. Every $1 billion spent supports over 15,000 jobs throughout the economy.

The “Economic Impacts of Highway, Street, Bridge, & Transit Investment in California” is the first to examine the impacts of transportation infrastructure spending on all sectors of the California economy, not just the transportation sector. The release includes the launch of a new, searchable online database that breaks down the economic benefits of infrastructure spending in every California county.

Specifically, the report found that:

California highway, street, bridge, and transit investment will support the following $200 billion in annual benefits over the next decade:

• Generate nearly $101.5 billion annually in economic output as businesses throughout the economy sell goods and services to both other businesses and consumers, totaling $1 trillion over 10 years.
• Contribute $52 billion per year of state GSP, adding up to $520 billion over 10 years. This accounts for nearly 2% of total GSP.
• Support nearly 700,000 jobs on average each year throughout the economy, with 86% of the employment outside of the construction industry. This includes an estimated 220,000 jobs in transportation and warehousing, 80,000 jobs in manufacturing and trade and 68,000 jobs in professional and business services. This will add up to over seven million job-years supported or created over the next 10 years.
• These workers will earn nearly $30.3 billion in wages, annually, totaling $303 billion over 10 years.
• $21.2 billion in additional tax revenues each year, adding up to $212.2 billion over 10 years, which includes $6 billion in annual state and local tax revenue from payroll, business, income, sales and use taxes, totaling $60.9 billion over 10 years, and $15 billion in annual federal payroll, income, and business taxes, totaling $151.3 billion over 10 years.

The economic activity is driven by construction spending as well as expenditures on transit operations, planning and design work, right-of-way purchases, construction support, administration, and research. The positive benefits of transportation investment flow to all levels of government.

“This report underscores the benefits of maintaining and repairing existing roads. Taking a ‘fix-it-first’ approach is environmentally and financially sustainable, while also contributing significantly to the local economy,” said Graham Knaus, executive director, California State Association of Counties.

The research was conducted by Dr. Alison Premo Black, Chief Economist at the American Road & Transportation Builders Association (ARTBA) and released by the California Alliance for Jobs (CAJ), California Transit Association, California State Association of Counties (CSAC), and the League of California Cities (Cal Cities). The newly-created website allows for creation of specific sector reports and more.

The report uses a series of sophisticated models to quantify both the immediate economic activity from increased highway, street, bridge, and transit program spending levels in California and the longer-term user benefits that accrue from improving the transportation system.