13 Investigates Fact Checker: Highway funding bill unlikely to create 9,800 jobs
As Governor Mike Pence signed HEA 1002 into law last week, he said the new law to provide much-needed highway funding for Indiana will create nearly 10,000 new jobs.
But 13 Investigates has discovered the governor's job creation numbers may not add up.
As the governor signed the $400 million road funding bill in Valparaiso, his communications staff issued a press release on behalf of the governor. It focused on the new law's impact on job creation.
"The legislation I signed today will put Hoosiers to work now and make sure we remain the Crossroads of America," the release said, pointing out "this legislation will create an estimated 9,800 jobs" for Hoosiers.
The press release, along with the 9,800 number, was broadcast and published by media around the state.
WTHR asked the governor to explain the source of his job creation statistic.
"I think the number that I was presented came from industry sources," he said. "That's what the industry tells us, is that that level of expenditure on infrastructure generates about 10,000 jobs."
The governor's office directed 13 Investigates to a document which, it says, is the basis of its calculation.
"This figure is calculated based on a Federal Highway Administration (FHWA) report from 2007 that every billion dollars of transportation infrastructure investment supports 27,800 jobs," wrote spokeswoman Bridget Cleveland.
A closer look at the 7-year-old federal report, titled "Employment Impacts of Highway Infrastructure Investment," shows the authors advise caution about using the job employment figures.
The Federal Highway Administration instructs "the estimated jobs figure should be used carefully" and that "the FHWA analysis refers to jobs supported by highway investments." In other words, the federal report cited by the governor's office shows how many jobs are supported by infrastructure spending, not how many new jobs are created. The report indicates some new jobs may result from such highway investment, but the majority of the jobs calculated represent existing jobs that are retained.
And based on the FHWA calculations, the infrastructure spending will support the total number of estimated jobs for one year. That means many of the jobs the governor promoted would likely be temporary jobs.
Another federal report shows a much more conservative estimate of job creation linked to government spending. In 2009, the White House released guidelines to estimate job creation resulting from the American Recovery and Reinvestment Act. Using those estimates, the number of jobs resulting from Indiana's new highway spending would be less than half the number promoted last week by the governor - about 4,300 jobs instead of 9,800.
Clearly, the money allocated in the state's new highway funding bill is very much needed. The $400 million will help put some Hoosiers back to work, keep other Indiana workers on the job and improve major state highways. It might even help get rid of some of the seemingly 9,800 potholes along I-65, I-69 and I-70.
But based on the report used to calculate the number, it is very unlikely to "create an estimated 9,800 jobs" as the governor's office said it would.