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Do You Feel (Federally) Stimulated: Are Stimulus Dollars Really Having an Impact on California's Infrastructure?

By: Rick E. Rayl, Bradford B. Kuhn
09/15/09

At just over 200 days into the life of the American Recovery and Reinvestment Act of 2009 ("Stimulus Plan"), it seems like an appropriate time to take stock of whether the $792 billion (or thereabouts) in stimulus funds ($48 billion of which are earmarked for transportation projects) are really changing infrastructure on the ground in California. As one might imagine, the view of whether things are happening correctly, fast enough, etc., is subject to a fair amount of political spin, and the statistics are filled with opportunities to make whatever political point one might want to make.

However, some quantifiable measures of what has happened in 2009 do exist, and they reveal at least a bit of the Stimulus Plan's real world impact. First, some of the "big picture" numbers. The $792 billion in stimulus money is not all spending money; approximately $210 billion is realized through tax cuts. Of the approximately $580 billion in spending, only about 15 percent -- or $89 billion -- has been spent through early September. Another $128 billion is "in progress," and about $364 billion remains to be spent. But this does not tell the whole story if one wants to know about infrastructure projects, as much of the stimulus money has nothing to do with infrastructure.

When one looks at the various government agencies that control the money, it is clear that some agencies are spending their allocations much faster than others. For example, the Social Security Administration has spent about $13 of its $15 billion-dollar allocation around 86 percent. The Department of Transportation, by contrast, has spent only about $2 billion of its $48 billion-dollar allocation -- around five percent. In other words, where infrastructure is concerned, the expenditures in the first 200 days fall short of the 15 percent figure for overall spending. Even that does not tell the whole story if one wants to know about infrastructure projects in California.

Of the $48 billion earmarked for transportation projects (the most readily-identifiable infrastructure dollars), California's projected allocations include approximately (1) $2.57 billion for highways, local streets and roads, freight and passenger rail, and port infrastructure projects, and (2) $1.07 billion for transit projects. Another $13 billion in transportation funds (for things such as high speed rail, aviation, and AMTRAK) are not allocated to any particular jurisdiction, meaning California's overall allocation could be much higher.

As of August 7, approximately $1.8 billion had been allocated to California's transportation infrastructure. Of the 489 road and bridge stimulus projects that money represents, only eight percent were underway. On the other hand, that eight percent represent some of the larger projects being funded, as they will consume about a quarter of the $1.8-billion allocation.

In terms of some of the larger counties in the state, approved transportation allocations to date break down as follows:

  • Alameda -- $260 million for 10 projects;
  • Los Angeles -- $636 million for 20 projects;
  • Orange -- $86 million for 5 projects;
  • Riverside -- $34 million for 8 projects;
  • San Bernardino -- $155 million for 13 projects;
  • San Francisco -- $138 million for 21 projects; and
  • San Diego -- $133 million for 10 projects.

There are some visible bright spots, though they do not necessarily involve new infrastructure. For example, Caltrans just last week began repaving portions of the San Joaquin Hills Transportation Corridor (State Route 73) in Orange County; the project is being funded by a $77 million Stimulus Plan grant approved on July 10.

In the Bay Area, construction is set to commence this fall on badly needed improvements to a key approach to the Golden Gate Bridge. Thanks to $100 million in Stimulus Plan dollars, the project will be done now, rather than in April 2011, when it had been slated to begin.

Other large transportation projects currently (or soon to be) underway will also generate real benefits for California. These include:

  • The Alameda County Caldecott Tunnel Improvement Project, which involves constructing a fourth tunnel to connect Alameda and Contra Costa counties via State Route 24 (receiving $192 million in Stimulus Plan dollars). This project was put on hold earlier this year in light of California's state budget woes, but it appears that construction will commence this fall thanks to the Stimulus Plan dollars.

  • The I-215 North Corridor Project, which will add new lanes to the I-215 through the city of San Bernardino (receiving $128 million in Stimulus Plan dollars). Caltrans has acquired the right-of-way for Phase 3 of this project, and a groundbreaking ceremony is set for this week.

  • The SR-905 Project, which will add a new freeway from the I-805 to the Otay Mesa port of entry at the Mexico border (receiving $78 million in Stimulus Plan dollars). This project is currently under construction, and is one of the first projects involving new right-of-way to commence construction using Stimulus Plan dollars.

Aside from transportation projects, the Stimulus Plan calls for improvements to our utility system, education infrastructure, and energy infrastructure. As with transportation projects, the Stimulus Plan's first 200 days has not seen a flurry of shovels in the ground in these areas, but money has been allocated, construction is starting, and more money should follow in the upcoming months.

So what does it all mean? The money is getting here, but not nearly as fast as many hoped. And, even when it arrives, the Stimulus Plan does not ensure vast new infrastructure in California. Still, with things like four water main breaks in a few days (last week in Los Angeles) and a major crack discovered on the Bay Bridge (over Labor Day weekend), any money committed to California's aging infrastructure is welcome news.

Rick E. Rayl is a Partner in Nossaman's Eminent Domain and Valuation and Real Estate Practice Groups and is an experienced trial attorney dealing with eminent domain, inverse condemnation and other real estate and business disputes. He can be reached at rrayl@nossaman.com or 949.833.7800.

Brad Kuhn is a member of Nossaman's Eminent Domain and Valuation Practice Group and specializes in business and commercial litigation with an emphasis on eminent domain, inverse condemnation and other real estate disputes. He can be reached at
bkuhn@nossaman.com or 949.833.7800.

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