Analysis states transportation projects eclipse $1B for Solano economy

January 18 2018

Daily Republic By Todd R. Hansen

FAIRFIELD — An economic analysis of the Solano Transportation Authority’s top priority projects states the infrastructure investment will generate more than $1.1 billion for the Solano County economy over the life of the projects.

“Transportation infrastructure projects have economic impacts based on both construction and use once completed,” the executive summary of the report produced by economist Robert Eyler, owner of Economic Forensics and Analytics in Petaluma, states.

The Solano Transportation Authority contracted with the Solano Economic Development Corp. for $25,000. The economic development agency then hired Eyler to produce the report.

“I think the key thing is that funding infrastructure projects have a positive impact on the economy,” said Sean Quinn, a consultant with the Solano Economic Development Corp.

He is particularly impressed with the fact the report not only studies the actual construction and other direct spending benefits, but also the economy created by relieving congestion.

Eyler looked at the economic impacts that would be created by replacing the truck scales on westbound Interstate 80; the two parts of the second phase and proposed third phase of the Interstate-80/Interstate-680/Highway 12 Interchange; and extending the I-80 express lanes from Air Base Parkway to Interstate 505.

“This study shows that over $740 million in construction spending creates over $1.003 billion in local economic impacts, including support for over 5,700 jobs and $35 million in state and local tax revenues during construction,” the summary states.

“Reducing congestion for trucking generates another $93.8 million on average for five years after project completion. Over 600 more jobs are supported due to these annual savings, and almost $5 million in state and local tax revenues,” the summary states.

Those numbers add up to nearly $1.102 billion.

The report will be used to show state and federal officials the importance of funding the projects. The longer it takes to begin work, Eyler said, the economic output decreases.

Eyler said in a phone interview Wednesday that the model used does not presume that all the jobs created during construction, or the jobs created after the projects are completed, will be filled by Solano County residents. However, it is assumed that some percentage of those jobs will be filled by local residents.

The study takes into consideration more than 536 industries, so each of those would have to be pulled and analyzed to determine what that overall percentage would be.

“And I do not assume 100 percent of the wages stay locally,” Eyler said. “It would not be reasonable to think that.”

Eyler also notes that he does not know what the impact of the post-wildfire job environment will have on projects in the immediate future. That could be a plus for skilled local workers, since heavy construction firms may look to an expanded workforce to fill those jobs.

Like Quinn, Eyler is intrigued by the economy created by reducing congestion, but admits economists are divided on what that actually means.

He based his numbers on Solano County’s median wage of $18.32 an hour of workers delayed by congestion.

Eyler also noted that while the analysis is not part of the study, there are some lost economies. For example, less congestion likely means fewer accidents, and that could have a negative impact on automotive repair and related businesses. He said the data is too insufficient to use.

Beyond the dollars and cents, however, the economist said there are social values that cannot be easily quantified.

If a commuter, for example, gets home faster and can spend more time with family or just relaxing, what economic value can be attached to that? Does work production go up if the commuter is happier? Gets more sleep? Or various other possibilities?

“There is a social and economic value,” Eyler said about funding infrastructure projects.