KPCC's Shirley Jahad talks with Jack Kyser, Chief Economist with the Los Angeles County Economic Development Corporation, who says local economists are already sizing up how much federal stimulus money the Southland might get.
Shirley Jahad: This is All Things Considered. Good to have you with us, I'm Shirley Jahad. As you've been hearing, the U.S. Senate voting right now on the nearly $800 billion economic stimulus package. The House approved it earlier today. Speaker Nancy Pelosi was pleased.
Nancy Pelosi: It is a day for us to feel some sense of satisfaction that, working together under our new president, we were able to pass legislation today that is transformational for what it will do to our economy.
Jahad: A local economist sizing up how much the Southland might get, I talked about that with Jack Kyser, chief economist with the Los Angeles County Economic Development Corp.
Jack Kyser: We calculated the pice of the pie that Los Angeles– we should get between 75,000 and 100,000 jobs out of the package. Some of those jobs will be in the construction sector – heavy construction.
And we estimate probably about $6 billion will come into the L.A. County economy. The numbers keep changing, but this will give a positive boost to the economic situation.
Jahad: How does it look for the state of California?
Kyser: I think the state will do OK. You know, they're talking about $26 billion going to the state, and obviously the state is quite interested in this because, in the state budget, they're talking about cutting spending on schools and some health services, but the federal stimulus package will include money for schools and for some health services. So, hopefully it will help the state out – we just have to see what the final package is that comes out of D.C.
Jahad: If all of this gets passed and signed by next week, what does that mean in terms of getting money actually down to the state and local level?
Kyser: There's going to be a lag. I think a lot of people say, oh, the stimulus package has been signed, it was about a week ago, where is the money? People don't understand that there's a lot of details that have got to be worked out.
And then on the transportation related items, that money will at first go to the state transportation department, our Caltrans, and then it will be parsed out. And so, even though you have local leaders saying, well, we have shovel ready projects, they may not get to use those shovels until about the middle of the year, third quarter.
Jahad: That far away?
Kyser: That far away, yeah. I mean, there was this great sense of urgency created back in D.C. to get the stimulus package passed, but, you know, there's gonna be a time lag before we actually see it.
Jahad: Is the money from the feds going to help plug the holes, the cuts that the state lawmakers are talking about having to make?
Kyser: No. What you literally have is a situation where the federal government is putting money in California consumers' pockets, and the state is going to be taking some of the money out, because you're going to see an increase in the sales tax – they say for two years – an increase in the income tax charged by the state across the board, and of course, an increase in the vehicle license fee. And if you're an auto dealer, that's not going to make you too happy.
Jahad: So if it's really money in and money out of people's pockets right away, where's the stimulus?
Kyser: Well that's a good question. I think there'll, you know, there'll be more money coming in from the Fed than the state will take out. So, hopefully we will get a little bit of a boost.
Jahad: So are we going to see a lot of dams and levies being repaired? Are we going to see new carpool lanes being built? Are we going to see new train lines being constructed as a result of what's coming out of Washington?
Kyser: It's going to be a combination of things. You'll probably see some new school construction, you'll see highways either being improved or some expansions, bridges, access to ports.
Jahad: That's Jack Kyser, economist with the L.A. County Economic Development Corp.