Nation’s ‘Sacrifices’ Build Hope for a Payoff in O.C.

Less than a week after President Clinton asked Americans for their help and forbearance in cooling off growth in the federal deficit, the political talk at Mimi’s Cafe here on Brookhurst Street was as hot as the coffee.

“He’s asking us to send more money and he’s putting in a $30,000 jogging track at the White House?” said Gloria S. Kish, 65, who was sipping her first cup of the morning. “It’s the wrong time! Let’s hear about how he’s going to make a personal sacrifice first.”

Her husband, Bill, nodded and quickly added: “Yeah, the only jobs we see him creating are the ones working on that track.”

Yet the retired couple said they believe--like more than a dozen people interviewed in the past few days on one block in Fountain Valley and elsewhere--that Clinton energized the nation with his address by offering a measure of hope and a firm plan for growth.

The Administration’s new emphasis on transportation spending, for instance, was welcome news to Orange County transit officials, who expect that the county’s “fair share” of additional federal transportation projects will include millions of dollars for highway construction and improved traffic management systems.

And business people suggested that the President’s proposal to offer tax incentives for equipment purchases might not only encourage them to buy things, but boost the confidence level of their own customers, increasing the pent-up demand for their products.

Said Gary Gomer, owner of a dry-cleaning supply business, who had stopped at Mimi’s for breakfast with his bookkeeper: “People now are hanging onto their money. They’re cutting corners. Anything that will stimulate spending will help me.”

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Research at Chapman University’s Center for Economic Research supports Gomer’s common-sense notion. According to economist Esmael Adibi, director of the center, each dollar spent in Orange County typically ends up being worth $2.20 to the economy, as that dollar is spent again and again.

Some people who might incur higher dry-cleaning bills are the civil engineers, the surveyors and electricians needed to build more roads here. Even before the inauguration, Clinton’s transition team had asked state and county transportation officials for a list of projects that would lead to the immediate hiring of workers.

Given high priority were these “jump start” projects:

* The $16-million installation of car-pool lanes on the Riverside Freeway, between the Costa Mesa and Orange freeways, which will be ready to go to construction in April.

* The $160-million reconstruction of the El Toro “Y,” where the Santa Ana and San Diego freeways converge in Irvine, and installation of car-pool lanes through South County.

* About $200 million in street repairs throughout the county’s 31 cities.

Also on the list are new Katella Avenue and West Street off-ramps on the Santa Ana Freeway, which the California Department of Transportation was already planning to build as part of the massive, $1.9-billion Interstate 5 widening project. The ramps would benefit the entire Anaheim resort-recreation area, but especially the planned Disneyland expansion.

One contractor eager to get some of those jobs is Santa Ana-based construction contractor Steven S. Rados.

“We’re prepared to do the work--it’s one heck of a way to stimulate the economy,” said Rados, whose field force of 150 craftspeople is down 50% from pre-recession days. “When you put work out into the public-works sector, there are so many other things that go along with it. Suppliers start selling hammers, shovels, hard hats and many other things.”

Many of the traffic improvements listed for the county are already funded through Measure M, the half-cent sales tax and 20-year transportation program approved by voters in November, 1990. But officials said that by substituting federal dollars, Measure M money could help accelerate projects that aren’t yet ready for construction and thus can’t take advantage of Clinton’s immediate job-creation strategy.

The list of area projects submitted to the Clinton transition team by local and state transit agencies totaled $2.7 billion, with an estimated federal share of $1.5 billion. Based on a construction industry formula of 34 jobs for each $1 million in construction spending, $1.5 billion would generate about 51,000 jobs in the county.

But Orange County Transportation Authority chief Stan Oftelie said local officials know they are likely to get funding for only a few projects. With Administration and state officials estimating that a more realistic figure is 50,000 new jobs for the entire state, Orange County’s so-called fair share would be about 10%--roughly 5,000 jobs.

“That would be great for Orange County,” Oftelie said. “But we’re hoping to do even better than the fair-share amount because we went ahead and became specific-project ready,” a reference to the projects that can employ workers almost immediately.

“As soon as we better understand how President Clinton intends to move on this, we’ll supply the projects he wants,” Oftelie said.

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When commuters get off those roads, William S. Miller would like to sell them a charbroiled chicken burger with extra sauce.

As chief executive of Red Robin International in Irvine, a chain of 98 restaurants in the United States and Canada, he said he considered Clinton’s proposals “fair”--and helpful.

“I am willing to pay more money to get things going up because the alternative is down, and that would really affect business. I think the President can get things moving again,” said Miller, who acknowledged that he would be subject to the new federal levy of 36% for families with income over $180,000 and a 10% surcharge for income over $250,000.

Clinton’s proposal to offer businesses a 7% investment tax credit over the next two years particularly whet Miller’s appetite to build more restaurants, since they cost more than $1 million each to erect and employ 100 people.

“I am building as many as I can handle, and I can use the extra tax money to finance even more,” said the 56-year-old Republican who crossed over to vote for Clinton last fall. “I’m feeling very positive.”

Indeed, food service firms that supply Miller’s chain might receive the greatest benefit from Clinton’s proposed infrastructure program.

That’s because “the big gains” in productivity from new highways come from trucking efficiencies, not faster commutes, according to UC Irvine professor Pete Fielding, former director of the Institute of Transportation Studies.

“When you build highways, you enable trucks to move more easily through metropolitan areas,” said Fielding, noting that most of the nation’s goods move by big-rig. “You reduce the costs of their operation and increase reliability, so that you can reduce costly warehousing requirements,” in turn, at markets and restaurants.

That can add up to a savings of a third in the cost of moving goods, he figures, spotlighting a hidden public return on Clinton’s proposed investment in roads.

“Savings in commuting time is convenient, but I’m not sure that commuters don’t spend the time having another cup of coffee,” Fielding said. “But if it speeds the delivery of the equipment they use in the office every day, it shows up.”

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Back in Fountain Valley, across the parking lot from Mimi’s Cafe, Mike Whaley sat alone behind his desk in a Renaissance Doors & Windows office, waiting for customers to drive up.

Entering sales figures by hand on an analysis pad, the burly salesman said he was “knocked out by how vague” Clinton’s address sounded.

“No one knows what the details are,” he moaned, a Rolex watch flashing on his wrist as he leaned back in his chair. “I don’t mind paying more in taxes--but I want to see an itemized list of Clinton’s spending cuts first.”

Fountain Valley is exactly the kind of middle-class town that would shoulder a significant part of the Administration’s new tax burden. Orange County is ranked No. 10 in the nation in median family income at $51,269, but this central county town straddling the San Diego Freeway boasts a median family income of $10,000 more than that.

In a good year, the income of Whaley and his wife, who sells real estate, soars past that figure to top $140,000--yet he concedes that Clinton’s plans might yield a net gain.

“The tax credits could be a perfect opportunity to help this company grow,” he said.

He ticked off a few items: The custom door manufacturing firm has three storefronts and would like to open seven more. It just moved into a huge new factory in Fullerton, and if its three partners felt confident of new sales, the firm could buy $500,000 in new equipment--including a new $70,000 paint booth and some $50,000 drum sanders. And, pointing to the old-fashioned spreadsheet pad on his desk, Whaley added wistfully: “As you can see, we’re not computerized here. We’d like to buy a terminal for each office. . . .”

Clearly, though, Whaley is not sold on the Administration’s program. He pulled his latest pay stub out of a drawer, ran his finger across the “taxes paid to date” column, and said:

“If the government will sacrifice, I’ll sacrifice, a little, I guess. But it kicks me when they call me rich. We might make over $100,000, but I drive a Pontiac. We travel a little, but we are not wealthy. We struggle to get by. We save a little, but it blows my mind that those people in Washington would consider people earning $30,000 to be middle class. If you earn that much in California, you’re broke! It’s a farce. I don’t want everything judged by Little Rock’s economy.”

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A few doors down from Whaley’s office, Dr. John S. Fidone offered a new way to frame the debate. A Republican who voted for Ross Perot last fall, he said he “didn’t have a problem” with paying more in taxes “as long as everybody pays.” But that, he believes, is unlikely.

“The smart businessman, the intelligent manipulator, will always get out of paying,” said the chiropractor, whose office brimmed with patients. “And that’s not fair. But it’s like auto insurance. I pay $3,000 a year despite a clean record because there are a jillion people out there who pay nothing.”

Fidone said Clinton’s speech gave him “a lift,” and declared that the tax credits would give him “incentive to act now” to buy three new ultrasound machines, at $1,200 each, even though layoffs at such local aerospace firms as Rockwell International and McDonnell Douglas have slashed his business by up to 12% over the past year. (“Jobless workers don’t hurt their backs,” he said.)

But the lifelong athlete used a sports analogy to indicate that he was still heartened by psychological benefits that he perceived might result from Clinton’s address.

“I think the President prepared the nation mentally for his game plan,” Fidone said. “He explained himself well--there was a change in attitude that made me feel there was a light at the end of the tunnel. That made me feel good about him. With the right mental preparation, we can go on to play the physical game, and we can win.”

Freeway Aid

Highway projects that could get federal aid as part of President Clinton’s job stimulous package, in millions of dollars: Project: Santa Ana Freeway Pacific Coast Highway to El Toro Rd. Total cost: $65 Federal share: $57 Description: Widen freeway with two high high occupancy vehicle lanes Project: Santa Ana Freeway Katella Ave./West St. Total cost: $70 Federal share: $62 Description: Construct off-ramps in special events and recreational area Project: Santa Ana Freeway I-5/I-405 confluence Total cost: $152 Federal share: $134 Description: Add four carpool lanes, collector-distributor lanes and HOV connectors Project: Santa Ana Freeway Lincoln St. to Calif. 22 Total cost: $154 Federal share: $136 Description: Widen freeway, and add HOV lanes Project: Santa Ana Freeway at Bake Parkway Total cost: $20 Federal share: $18 Description: Construct new arterial interchange Project: San Diego Freeway I-405/SR-55 transitway interchange Total cost: $197 Federal share: $173 Description: Acquisition of right of way, construction of HOV connectors Project: Riverside Freeway SR-57 to SR-55 Total cost: $16 Federal share: $14 Description: Widen with two HOV lanes Project: San Joaquin Hills Transportation Corridor Total cost: $916 Federal share: $321 Description: Federal share to construct new toll facility Project: Foothill Transportation Corridor Total cost: $700 Federal share: $245 Description: Federal share to construct new toll facility Project: Beach Blvd. “super-street” Lincoln Ave to Calif. 91 Total cost: $15 Federal share: $13 Description: Acquire right of way, construction of superstreet improvements Project: Intelligent Vehicle Highway Systems (IVHS) Investment Total cost: $15 Federal share: $13 Description: Countywide traveler information system, traffic operation centers, regional transportation management systems Project: Regional streets, roads rehabilitation projects Total cost: $50 Federal share: $44 Description: Rehabilitation of major streets, roads throughout Orange County Project: Regional streets, roads rail grade separation projects Total cost: $35 Federal share: $31 Description: Fully grade separate rail, streets and highways to allow for higher train speed, lower vehicle delays at current crossings Project: Regional streets, roads capacity enhancement projects Total cost: $150 Federal share: $132 Description: Congestion relief projects countywide that are ready for construction given available funds Project: Regional streets, roads freeway interchange reconstruction Total cost: $30 Federal share: $26 Description: Reconstruction of freeway to street interchanges, adding capacity, improving safety Project: Regional streets, roads seismic retrofit projects Total cost: $15 Federal share: $13 Description: Seismic retrofit of critical bridges throughout Orange County Project: Metrolink Total cost: $47 Federal share: $38 Description: Acquisition of new rolling stock to increase commuter rail service in Orange County with clean fuel retrofitting Project: Central Maintenance Facility Total cost: $7 Federal share: $6 Description: Acquisition of property, construction, purchase of equipment for Central Maintenance Facility for transit vehicles Project: Transit vehicles replacement Total cost: $71 Federal share: $57 Description: Replace older transit fleet vehicles to meet 1996 cleanfuel standards, including electric driver shuttle cars Totals Total cost: $2,725 Federal share: $1,532 Source: Orange County Transit Authority