Transportation Act Points Way to Future

The new and grandly named federal Transportation Equity Act for the 21st Century gives California $18 billion for highway and transit projects, more money than any other state. And with the money comes a significant new vision for California, as freight handler to the nation, shipper of the world’s goods to the U.S. interior.

Indeed, one of the projects cited by Sen. Barbara Boxer (D-Calif.), who played a key role in getting transportation money for the state, is called Gateway for America.

That’s an ambitious effort to create 55 rail and highway crossings in the San Gabriel Valley so that freight trains coming off the Alameda Corridor don’t cause massive street congestion as they pass through Montebello, Industry, Diamond Bar and other cities on their way to Ontario Airport or the rail yards at Colton. Ultimately that project, also called Alameda Corridor East, will cost about $1 billion.

Meanwhile, the original $4-billion Alameda Corridor project, designed to speed freight from the ports of Los Angeles and Long Beach to rail yards near downtown Los Angeles, moves forward slowly. “Some slippage” in scheduling has occurred because of difficulties in getting rights of way for the 19-mile corridor, but Dwayne Kanegy, the project’s chief engineer, says construction should begin this fall and the project will be completed by “the end of 2001.”

The state and nation have gone trade-corridor happy. Interstate 5, which runs from San Diego to the Canadian border and is the lifeline of California’s agriculture-rich Central Valley, is declared a trade corridor in the new act. So are Interstate 15 from California through Nevada to Utah and Interstate 40 from this region to New Mexico.

And there is money to begin study of the Southwest Passage, a corridor that would create special truck lanes and rail lines along Interstates 10 and 8 anticipating growth of two-way trade between this region and Arizona, New Mexico, Texas and Mexico. The designation qualifies more than 40 corridors in the U.S. to share in $840 million of federal grants.

Why all the money for transportation? Politics, partly. The new law has been criticized as pork barrel spending. But it’s pork with a purpose. The emphasis on expanding rail and highway complexes to handle more freight recognizes that international trade has become a major endeavor of California, says Arthur Sohikien of the Metro Investment Report newsletter.

And building proper infrastructure is essential to supporting job-creating industry. International trade generated more than 400,000 jobs last year in the Los Angeles region alone.

Yet if there are questions amid the flow of federal transportation money, it is about jobs. An argument has flared anew over how many people will get work building the Alameda Corridor, with the corridor’s administrators sticking to an estimate of 10,000 jobs, but skeptics saying only 800 jobs will be added. State Sen. Quentin L. Kopp (I-San Francisco) plans new hearings on the jobs question by the end of this month.

Beyond construction, economic experts are beginning to look at Southern California’s low-wage job picture and ask how international trade can be used to improve it. Freight forwarding and warehousing are growth businesses, but by themselves generate few high-paying jobs, experts say. “There’s a difference between trade as industry and the effects of trade on industry,” says economist Manuel Pastor of UC Santa Cruz.

Economist Jack Kyser of Los Angeles County’s Economic Development Corp. wants the region’s cities to focus on activities in which they have an advantage. “We have a lot of metalworking expertise in this area thanks to aerospace,” Kyser says. His aim is to encourage jobs paying at least $7.82 an hour--a modest $16,000 a year roughly, but an improvement on what many workers in the region now earn.

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Cities are beginning to look out for their interests. With its proximity to Los Angeles International Airport, Hawthorne has attracted freight forwarding facilities. But the city recently declared a moratorium on new air freight projects, says City Manager Bud Cormier. The city wants to compare the return it gets in tax income and jobs from air freight to other industries for the street repairs and municipal services it provides.

In the San Gabriel Valley, 30 cities joined in a council of governments to support lobbying in Washington to get the money for Gateway for America. The alternative was to see increased congestion clog local streets and slow down business, explains Algird Leiga, Claremont City Council member.

Indeed, international freight has increasingly flowed through the region even in this year of the Asian crisis.

The next step for the San Gabriel Valley area is to see how enhanced access to trade with other countries and other parts of the United States can benefit the electronic and biomedical companies growing in Industry, Pomona and other cities. Such access also can be a plus for the Valley’s garment and food processing companies.

One cause for concern is that most of the trade corridors in California and the West depend on Union Pacific Railroad making investments to expand its yard at Colton and to upgrade trackage here and elsewhere. Yet Union Pacific, because of its terrible performance since the 1996 merger with Southern Pacific, is in danger of being weakened this week. Transportation authorities in Houston are contemplating handing UP tracks over to competitors who may do a better job. Yet it would be better for California if UP is allowed to keep its tracks, reform its management and invest in its facilities.

Another concern of transportation experts is that contracting on the Alameda and other corridors will become a fiasco of cost overruns reminiscent of the Los Angeles Metropolitan Transportation Authority’s recent history. But that probably won’t happen.

There will be more businesslike oversight of transportation projects from now on, as befits a state and region that has become freight handler to the nation, goods shipper to the world.