Questions are being asked about what we can expect from the $4.15 billion of construction just approved by the California High Speed Rail Authority. Last year, we published a short report looking at the job creation claims, which applies to the current situation.
The bottom line is that very few, if any, net new jobs will be created. This finding directly contradict claims of 80,000 or more jobs.
The math can get complicated but the key issue is that California will be providing $2 billion of the money. This will be debt financed and the cost of paying the interest and principal comes from the general fund. Every dollar of extra spending means a dollar of spending cuts and jobs with it. You could see some steelworker jobs created, but at the cost of teacher jobs.
It didn’t have to be this way. California didn’t have to match the Federal Funds, but once it decided to do so, the stimulus effect was going to be limited.