Editor’s note: This is the first in a two-part series on infrastructure legislation. The second part will be published Monday, and will feature local reaction on the potential changes in the U.S. Senate.
The United States ranks 13th in the world in overall infrastructure according to a World Economic Forum report in 2019, and California ranks 31st out of the 50 states according to U.S. News and World Report.
To address the infrastructure needs of the country, President Joe Biden unveiled a sweeping $2 trillion infrastructure proposal called the American Jobs Plan. The package would provide, in billions: $400 for home and community care, $213 for affordable housing, $174 for electric vehicles, $115 for roads and bridges, $100 for high-speed broadband, $100 for school construction, $100 for power grid/clean energy, $85 for public transit and $80 for railways, according to a graphic from the White House.
The proposal also includes a 28% corporate tax rate, a 33.3% increase from the tax cuts of 2017.
U.S. Rep. Salud Carbajal, D-Santa Barbara, announced his support of the plan in a statement to the News-Press, calling it “a long overdue and historic investment to rebuild infrastructure, handle the climate crisis and create good-paying jobs.”
“I have been advocating for more investments in our dilapidated infrastructure going all the way back to when I was a county supervisor and I have made it a top priority in Congress…With the American Rescue Plan signed into law, and vaccines being distributed more rapidly, there is finally a light at the end of the COVID-19 tunnel. The American Jobs Plan is the crucial next step in our recovery, ensuring we emerge from the pandemic with a strong economy that benefits all Americans.”
Gregg Hart, 2nd District supervisor, also praised the commander in chief’s proposal, saying that infrastructure is a subject he’s passionate about as the vice chair of the LOSSAN Rail Corridor Agency Board, which operates the Pacific Surfliner rail service between San Diego and San Luis Obispo.
“My main focus is on doing everything I can to help our local economy rebound from the pandemic-triggered recession and the Biden administration’s infrastructure package includes many elements that will assist county residents with the recovery,” he told the News-Press. “I’m very pleased to see federal infrastructure investment is finally getting the attention it requires.”
He said that the 101 HOV lane multimodal corridor project is the county’s top priority, and he hopes the infrastructure plan could provide the $200 million needed to complete the remaining 2.5 mile segment from Montecito to Santa Barbara on time. The proposal could also increase train service to the county by increasing current Amtrak funding by 580% for modernization, and reduce pollution from diesel buses by including federal transit funding for clean electric buses.
Also supporting the county’s mission of mitigating greenhouse gas emissions and climate change is the $15 billion for grants and incentives to build a national network of 500,000 electric vehicle chargers by 2030, which Supervisor Hart said would encourage more consumers to buy electric vehicles.
He added that he’s supporting the County Public Works director, Scott McGolpin, in his efforts to increase funding for local roads by directly allocating money to local governments for local road maintenance and bridge repair.
“This initiative will get federal transportation dollars directly into local communities as soon as possible to create and preserve American jobs, both in the public and private sector,” Supervisor Hart said.
Santa Barbara County Association of Governments, according to Executive Director Marjie Kirn, is encouraged by the national attention to infrastructure needs.
“As the American Jobs Plan looks to make historic investment in infrastructure to rebuild the way we address climate change and repair existing infrastructure, SBCAG’s focus right now is to work with our federal leaders to ensure Santa Barbara County’s regional priorities are represented in the plan’s objectives and able to be competitive for funding,” Ms. Kirn told the News-Press.
She said that there are more than $700 million ready-to-deliver transportation projects in the county’s communities that represent critical public safety and quality of life improvements on bridges, roads, transit systems and bicycle and pedestrian infrastructure, and that $700 million worth of transportation translate to 9,000 jobs for the region.
Ms. Kirn echoed the importance of the funding to the Highway 101 project.
“Santa Barbara County is unique in that we are a self-help county, meaning that local voters overwhelmingly elected to tax themselves through Measure A to invest in regional transportation programs and projects. Through Measure A, voters prioritized the Highway 101 Multimodal Corridor project as the number one regional transportation project,” she said. “Two and a half miles of the total 16-miles of the project remain unfunded. Collectively, 80% of the Highway 101 Multimodal Corridor project funding is coming from non-federal sources. We believe that the time is now for a significant amount of federal assistance to make a significant impact on this project for our community.”
However, some community members, and all Republicans in Congress and some moderate Democrats as well, take issue with some aspects of the president’s infrastructure package — namely, the 7% corporate tax increase, which is one of the largest increase in decades.
“A deep, dark recession. That’s what that 28% corporate tax is going to do,” Bobbi McGinnis, the county’s Republican Chair, told the News-Press. “We’re just coming out of a pandemic. I think it’s very irresponsible.”
She argued that the tax hike will chase companies out of the country and put people out of work rather than help get people back to work.
Dr. Peter Rupert, an economics professor at UCSB and the director of UCSB’s Economic Forecast Project, said it’s hard to tease out what the impacts of the tax increase would be.
“Unfortunately, our tax system is so complicated … Are businesses then going to say, ‘Hey, we can figure out some loopholes around that?’ Are they really going to collect those taxes?” he told the News-Press. He added that in general, he believes that if it costs corporations more to do business, they’re going to do less of it.
“California has the worst roads outside of Washington, D.C. We already pay a lot of road taxes, so why do we still have bad roads? What are we getting for our money?” Dr. Rupert said. “I think what people object to is increasing taxes and not seeing any benefit of it.”
Critics of the bill also say that the funding is largely going to items not exactly infrastructure-related, such as addressing inequality and climate change.
“I think it’s got very little infrastructure actually in it and it’s more of the government taking over,” Ms. McGinnis said. “That’s why there’s a lot of pushback from Republicans, which there should be.”
Dr. Rupert said that it’s important to remember that this massive price tag is debt-financed.
“We’ve already spent $4 trillion on the pandemic. Now we’re up to $6 trillion, which is a third of the GDP,” he said. “We haven’t seen debt like this in a long time … In the long run, people realize that there’s no free lunch and all this stuff that they get has to be paid back.”
Ultimately, the economics professor said that he’s more interested in the “how” than the “what.”
“To me, the devil is really in the details of this kind of thing. Why do I say that? When you look at affordable housing and subsidizing construction and more houses, that’s all fine, but now take Santa Barbara for example. Just because the federal government has more money for it doesn’t mean we can do it,” Dr. Rupert said. “If people aren’t ready to build affordable housing in downtown Santa Barbara, it’s just not going to happen.”
He referenced government housing projects that have gone poorly, and that cheap bad housing doesn’t solve the problem.
“It’s important to look at the large picture and the large picture is we’re going into more debt and we do have people that need jobs,” he said. “It’s really about those details that are going to mean success or failures of these programs. The last thing we want are unintended consequences of this thing.”
Because of the lack of bipartisan support on the infrastructure bill, the Senate parliamentarian advised that a revised budget resolution can include reconciliation instructions, allowing Democrats to pass spending legislation by a simple majority vote rather than needing 60 votes.