In his State of the Commonwealth address, Virginia Gov. Bob McDonnell spent a lot of his time selling his plan to spur additional road construction in Virginia. Democrats are skeptical of taking on new debt to pay for transportation, but if the plan passes, it could end one of the state’s longest-running debates.
And, McDonnell added, it would create jobs.
“Building now will produce another benefit for our Commonwealth: road building means job creation,” McDonnell said. “It is estimated that every $100 million spent on construction generates 3,000 new jobs.”
McDonnell wants to spend $4 billion over the next three years on transportation, a significant part of it on road construction, so we were wondering: Will all this building actually put tens of thousands of Virginians back to work?
A McDonnell spokeswoman said the source of the jobs claim was a report by the American Association of State Highway and Transportation Officials that uses 2007 data from the Federal Highway Administration. The report "estimates that a total of 34,779 jobs ... would be supported by each $1.25 billion in highway capital investment." Do the math, and that turns out to be 2,782 jobs for every $100 million spent.
But the report comes with plenty of caveats. The most important to us is the following: "The FHWA analysis refers to jobs supported by highway investments, not jobs created." McDonnell said the spending would "generate ... new" jobs, but the report only says jobs will be supported, not created. That could mean saving jobs that might otherwise disappear, creating new ones, or continuing to fund existing jobs not at risk.
The report also states that annual highway funding would support the same jobs year after year, but an increase in funds would create new ones. McDonnell's argument is based on a burst of spending. "This would be an immediate infusion of funds the likes of which our Commonwealth hasn't seen in decades," he said in the speech.
The study from AASHTO notes that with the exception of certain projects, "highway funds spend out slowly, with only 27% of a project, on average, outlaying in the first year." In fact, the report makes a point to caution against using the numbers to argue for including highway spending in economic stimulus packages, as many had done in the case of President Obama's 2009 legislation.
McDonnell is right that road construction has been linked to job growth, but the relationship is more complex than he made it seem in his address. He makes it sound like spending $100 million on road construction will instantly move 3,000 Virginians directly from the unemployment line to work. That's not how it works. What he said is Only Kind of True.