CIC PRESS RELEASE

Released June 17, 2004
Contact Beth Miller Malek 916-442-5000

Restoration of Transportation Funding Good News for California's Economy and Business Climate

Study Finds Broad Reaching Economic Benefits from Transportation Investment

SACRAMENTO - Restoring California's transportation funding substantially increases employment and spending, ultimately impacting a wide variety of sectors in the California economy, according to a report issued today by the California Infrastructure Coalition (CIC), formerly the California Rebuild America Coalition (CalRAC). The CIC report was commissioned by the California Business Roundtable, a founding member of the coalition, in partnership with the California Alliance for Jobs and Transportation California, to demonstrate the positive economic impact California's $2 trillion transportation infrastructure system can have in fueling the state's economic engine.

"Investment in California's transportation is a wise investment in the state's infrastructure and its economy that will pay enormous dividends today and for generations to come," said Bill Hauck, President of the California Business Roundtable and Vice Chair of the California Infrastructure Coalition. "Not only will increased transportation spending rebuild a decaying infrastructure that is in desperate need of renewal, it will create jobs in California and encourage vital business investment to ignite the state's economic recovery."

Potential economic impacts of increased funding for California's transportation infrastructure include:

• For every state dollar spent on transportation projects, the state would see an additional $.97 in indirect and induced spending in the economy - many of these additional transactions result in sales tax revenues and additional income for taxpayers in the state, creating additional revenue not only for the state but local governments as well.
  
  
• Every one billion dollars of transportation spending in California creates approximately 18,000 new jobs in the state (net of procurement).
  
  
• Project expenditures will improve the state's transportation infrastructure and business environment resulting in ongoing general economic benefit.

Based on the CIC report, increased funding for California’s transportation infrastructure benefits a wide array of segments in the economy. Roadway and transit construction and associated procurement activities directly create employment and influence the purchase of good and services across the state. These activities also affect linked industries throughout California with direct, indirect and induced benefits. Construction projects require architectural and engineering services, as well as tools, supplies and other services directly tied to the projects. Additionally, construction employees purchase items from groceries and household goods to services from family physicians, insurance, hospitals and banks. The comprehensive economic impact resulting from the actual construction of the projects and the employment of thousands of construction workers is broad reaching.

Since fiscal year 2001-02, the state General Fund has borrowed substantial amounts of monies from various transportation funds. During the May revise of the state budget for 2004-05, the Schwarzenegger Administration proposed to provide $383 million to the Traffic Congestion Relief Fund (TCRF). Most recently, the Administration has indicated it would repay the remaining one billion dollars still owed to the TCRF by the General Fund by allocating any potential one-time revenue from the renegotiation of the tribal gaming compacts.

The complete report, fact sheet/backgrounder on transportation funding and a description of the study’s methodology are available through the California Infrastructure Coalition at www.calinfrastructure.org.

About the California Infrastructure Coalition

The California Infrastructure Coalition, formerly known as the California Rebuild America Coalition (CalRAC), is a non-profit, broad-based organization whose mission is to build support for dedicated and consistent sources of funding sufficient to sustain California's vital infrastructure facilities and systems. California Infrastructure Coalition membership includes California cities, counties, special districts and other regional organizations, and corporations, as well as other non-profit organizations that represent all who are impacted by infrastructure investment policy.

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