What We Learned From The Stimulus.
And how to use what we learned to speed job creation in the 2010 jobs bill
The latest data on stimulus spending show that funds spent on public transportation were a more effective job creator than stimulus funds spent on highways. In the 10 months since the American Recovery and Reinvestment Act (ARRA) was signed, investing in public transportation produced twice as many jobs per dollar as investing in roads:
Every billion dollars spent on public transportation produced 16,419 job-months.
Every billion dollars spent on projects funded under highway infrastructure programs produced 8,781 job-months.
As Congress and the Administration discuss a possible jobs bill, the implication is clear: shifting available funds toward public transportation will increase the resulting employment.
The latest data on stimulus spending show that funds spent on public transportation were a more effective job creator than stimulus funds spent on highways. In the 10 months since the American Recovery and Reinvestment Act (ARRA) was signed, investing in public transportation produced twice as many jobs per dollar as investing in roads:
Every billion dollars spent on public transportation produced 16,419 job-months.
Every billion dollars spent on projects funded under highway infrastructure programs produced 8,781 job-months.
As Congress and the Administration discuss a possible jobs bill, the implication is clear: shifting available funds toward public transportation will increase the resulting employment.
Shifting investment to public transportation would speed job creation
The United States has put under contract more than $20 billion dollars in transportation investments through ARRA. States are required to report the job creation and job retention resulting from each contract paid for with these funds. As the Congress and the Administration consider a jobs bill, they should learn from data gathered for ARRA.
The data tell us that every billion dollars in public transportation investments made as of October 31 2009 produced roughly an additional 8,000 job-months compared to highway projects. ARRA transportation funds have so far gone disproportionately to highways. If the total road + public transportation funding in the just-passed House jobs bill were invested equally in public transportation and highways, the same outlay would produce 71,415 additional job-months, equivalent to year-round employment for 5,951 additional people.
Public transportation creates more jobs by spending less on land and more on people
The increased job creation and retention that states are reporting from ARRA spending on public transportation is consistent with the data collected and reported prior to ARRA. Every previous study of the employment impacts of transportation spending has found that investment in public transportation produces more jobs than investment in roads.
The reasons are straightforward: compared to roads, public transportation systems tend to:
spend less money on land acquisition;
be more complex; and
buy and maintain vehicles.
Based on past studies, we can expect investments in public transit to produce even more jobs in the House jobs bill than in ARRA because more funds would likely to be allocated to operations instead of solely to capital investment. Initially, ARRA did not allow states or Metropolitan Planning Organizations (MPOs) over 200,000 population to spend any stimulus money on public transportation operations. In June, Congress gave states and MPOs over 200,000 the flexibility to spend up to 10% of federal transit capital funds on transit operations. Largely because so much of the money had been committed by then, we do not know of any meaningful use of that flexibility.
Under the House jobs bill, which continues that flexibility, more public transit funds would presumably be allocated to operations. Because states and MPOs would be able to use the flexibility from the beginning, and because so many systems are in such financial straits, it is likely much of the flexibility would likely be used. This would further add to the number of jobs created by public transportation funds, because past studies suggest that transit operations produce, on average, 72% more jobs than even transit capital investment. These jobs come from driving buses and operating trains; from routine maintenance, and from running the system (dispatching, etc.).
Public transportation saves jobs by allowing people to get to work
The data that this report analyzes counts only the jobs directly created through investing in and operating public transportation. It is important not to forget the jobs preserved by allowing people to continue get to their workplaces. The impacts of cuts in public transportation service around the country underscore how for many workers, public transportation is the only way to reach their jobs. And for many others, public transportation helps to save money, allowing them to pay their mortgage or spend on other goods and services.
The United States needs more transit for a 21st century transportation system
In addition to creating more jobs, investments in public transportation help make progress on an enormous need. America’s public transit systems have a substantial backlog of unmet needs. The American Society of Civil Engineers gives the condition of the U.S. public transportation network a ‘D’ grade in its 2009 Report Card. The Federal Transit Administration says that the nation’s seven largest systems alone (Chicago’s CTA, Boston’s MBTA, New York’s MTA, New Jersey Transit, San Francisco’s BART, Philadelphia’s SEPTA, and Washington’s WMATA) have a $50 billion backlog of repairs necessary to reach a state of good repair.
In addition to the FTA estimates of existing repair needs, there are tremendous unmet needs generated by the gap between rapidly rising public demand and lack of existing access to public transit:
Lack of access. Roughly 50% of U.S. households lack reliable access to public transportation. This number is much higher in rural areas and smaller cities and towns.
Rising use. In 2008, nearly 10.7 billion trips were taken on U.S. public transportation, a four percent increase over 2007 and the highest level since 1956. Public transportation use has increased 38 percent since 1995, nearly triple the US population growth rate.
Public demand. According to a January 2009 National Association of Realtors national opinion survey, a very strong majority of the public (80%) prefer that stimulus transportation funding be used for repairing roadways and bridges and for public transportation.
In sum, additional investments in public transportation infrastructure would help make progress on large and pressing long-term needs, as well as generating a quick boost to employment.
Nationally, ARRA public transportation and road funds are spending out at the same rate
The data reported by the House Transportation & Infrastructure Committee also contains useful information concerning states’ productivity in converting ARRA funds into projects. The committee’s spreadsheet shows dollar amounts, state-by-state, associated with key benchmarks in the process: funds obligated, projects put out to bid, projects under contract, projects in which work has begun, and completed projects. These figures can be aggregated to show the process at work on the national level as well.
What do all these numbers tell us? First, there is very little difference in the overall rates at which ARRA-funded highway projects and transit projects are moving forward, with transit actually outperforming highways at most points. This is illustrated by Figure 1, below.
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