The city’s proposed $5.3 billion elevated rail line will create local jobs, but nobody agrees how many.

While some economists and political critics question the city’s projections, the formula for rail projects used by the federal government and an industry association would promise even more jobs.

If construction begins this year, the rail project could create 4,000 construction jobs in 2010 and would ultimately create an estimated 10,000 jobs annually over the course of the project, the city says. A pending final Environmental Impact Statement will validate the numbers it has been using since its draft EIS was submitted in 2008, according to city officials.

Rail supporters have pitched job creation as a major benefit of the transit project. Rail has been also been presented as a cure to traffic woes, a way to stimulate the economy and a way to promote transit-oriented development the city hopes will occur along the rail line.

“Job creation is critical during this recession,” Mayor Mufi Hannemann said as recently as March. “Unemployment is at a 30-year peak. Rail construction can put thousands of residents back to work this year.”

About 46 percent of new jobs would be in construction directly related to the project and another 18 percent would be indirect construction jobs, according to the draft EIS. The remainder would be retail, food, beverage and service jobs created as companies buy supplies and workers spend their wages.

While critics say the multipliers the city uses to determine the job impact of the project are too high, they’re actually lower than the ones used by the Federal Transit Administration and the American Public Transportation Association, an industry trade group. Approval of the project by the FTA isn’t contingent on job creation numbers.

The national organizations say that each $1 billion invested in transit translates to 30,000 jobs. Even subtracting the $1 billion cushion in the transit budget, that would be more than 120,000 jobs over the eight years of construction.

“In terms of direct jobs related to construction, it’s more than 8,000 jobs (for each $1 billion spent). That’s still a little more than the numbers you have from (the city),” said Virginia Miller, a spokeswoman for the American Public Transportation Association.

But projects in other cities make the national organizations’ projections seem optimistic. In New York, the $1.9 billion JFK AirTrain project, created 4,150 construction jobs, total. In Vancouver, the first phase of the $1.2 billion SkyTrain project was expected to create 6,434 direct jobs and 2,693 indirect jobs. Later figures were unavailable.

Although Honolulu is not alone among cities pitching job creation benefits from rail, local analysts and rail critics have a more conservative view.

University of Hawaii economist Sumner La Croix said the city should reduce its job estimates by about one third, based on new data showing lower consumer spending due to unemployment and wage cuts.

“These multipliers the city uses are way too high,” La Croix said. “We have newer numbers.”

The city’s assumptions don’t account for the fact that some expenditures won’t lead to job growth, such as paying the interest on the financing for the project, he said. He also noted that the local economy won’t benefit from supplies purchased out-of-state, including the material for the steel-wheel-on-steel-track system. And given Hawaii’s isolation, the majority of supplies will need to be imported.

Buying land along the 20-mile route is another expenditure that won’t clearly lead to job growth, he said. “It’s not clear that we’ll see the same type of multipliers for property acquisition,” La Croix said.

The city said its numbers are correct.

Mayoral candidate Panos Prevedouros, a vocal anti-rail critic, in April challenged the city’s job creation estimates, citing unnamed UH economists as the basis for his analysis. He concluded that the project would create no more than 2,000 jobs and only half would go to Honolulu residents. “Almost all of the rail construction materials and technology comes from off-island sources, so at best 1,000 of these jobs are local,” he said. Prevedouros’ comments came before the Legislature passed a law requiring 80 percent of the jobs on a public project go to local residents.

Prevedouros said he based his estimates on direct numbers from the University of Hawaii Economic Research Institute, but the March 2009 report he cites offers more general projections about publicly financed projects. Addressing the combined construction impact of the state highway modernization plan and the Honolulu rail plan, the UH economists conclude “these programs have little near-term stimulative effect, but may provide a substantial boost to the industry in the medium term, adding more than $2 billion in annual real contracting receipts and nearly 6,000 additional jobs by 2013.” (The city’s construction timeline goes through 2017.)

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