Train to Nowhere: Full Speed Ahead

by John Fund

Vote for high-speed rail pushes California over a fiscal cliff.

Sacramento, Calif. — It’s hard to express how sad it was for me to watch, in person, as the state I grew up in committed fiscal suicide.

I went down to the state capitol here on Friday afternoon to watch the state senate approve, by a single vote, a $4.7 billion bond package to build a high-speed-rail system from nowhere to nowhere. If the whole system is ever built — highly doubtful — it will cost at least $68 billion and run between Los Angeles and San Francisco. But this first 130-mile segment will run from Madera to Bakersfield, a stretch that less than 3 percent of the line’s potential ridership can use.

“Where [Governor Brown], with the state going bankrupt, is even thinking about an expenditure like this is beyond comprehension,” leading California demographer Joel Kotkin told the Wall Street Journal. “When the schools are falling apart, when the roads are falling apart, the bridges are unsafe, the state economy is in free fall. We’re still doing much worse than the rest of the country, we’ve got this growing permanent welfare class, and high-speed rail is going to solve this?”

The whole operation began in 2008, when voters narrowly approved $9.9 billion in bonds. It was a time when the estimated total cost was $33 billion and projections showed the project would be finished by 2020. The bond measure stipulated that the system must deliver passengers from the Bay Area to Los Angeles in 160 minutes or less.

Environmentalists and other opposition groups have made the 160-minute target impossible to meet, the costs have more than doubled, and the completion date has been pushed back to 2032 — and counting.

But there’s no stopping the runaway train. It’s full steam ahead, even though no one knows where all the money will come from after the nowhere-to-nowhere segment is completed, and even though Congress warns that builders shouldn’t count on more than a $3.3 billion down payment from Washington (a leftover from the 2009 stimulus bill).

The public has turned against the project because of concerns that it will never be finished and that it will line the pockets of government-linked business and union interests. A majority of voters want a re-vote, and 59 percent of Californians now oppose the project.

The state senate ignored the public on Friday, and the bill authorizing the bonds will be signed into law by Governor Brown, a big booster of the project. Before the senate vote, supporters waxed eloquent about the historic nature of the line. “How many chances do we have to vote on something that will inject a colossal stimulus into today’s economy while looking into the future far beyond our days in this house?” asked senate president Darrell Steinberg. “Do we have the ability to see beyond the challenges, the political point-scoring and controversies of today? Are we willing to take some short-term risk, knowing that the benefit to this great state will be, for centuries, enormous?”

Republican senator Tony Strickland responded by pointing to the state’s perennial budget deficits and asked why Democrats would put high-speed rail ahead of the pressing need to provide health care for children, prevent soaring increases in university tuition, and make necessary infrastructure repairs.

“I do believe Californians will remember in November — they will remember how out of touch you are in your spending priorities when you ask them to dig deeper,” Strickland told his colleagues. “They will see you spent money we simply don’t have.”

Passage of the high-speed-rail bill could also make it difficult for Governor Brown to achieve his other goals. The governor and Democratic legislators are backing a large tax increase on the November ballot, and they are risking voter backlash by spending money on the choo-choo project at a time when voter priorities are elsewhere. A new Field Poll finds that a full 21 percent of current supporters of Brown’s tax package will be less likely to support it with the bullet-train funding approved. The tax package is already hovering at just above 50 percent support in polls. The silver lining of Friday’s vote is that it may make Brown’s November measure the ninth straight tax increase rejected by California voters.

Voters have absorbed the reality that California’s taxes are already sky-high. The top rate of its individual income tax is 10.3 percent, the second-highest in the country. A single middle-class worker earning just $48,000 pays a top rate of 9.3 percent, which is higher than the rate for millionaires in 47 other states. The Golden State is a Golden Turkey for business: Its regulatory and tax climate for business is the third-worst in the nation, according to the Tax Foundation. It’s no wonder that 4 million more people have fled the state since the early 1990s than have moved to California from other states. (Immigration is the only reason that the state’s population is stable or slightly growing.)

Even former supporters of high-speed rail have soured on the idea of a train as an economic boon to the state. Former San Francisco state senator Quentin Kopp, until 2010 a member of the state’s High-Speed Rail Authority board, told the Los Angeles Times that he now views the project as “the great train robbery.” He notes that his former colleagues approved the bill (without a vote to spare) only after they nabbed federal pork for local transit in exchange for their vote.

It was wrenching to watch the California state legislature — for which I worked in the 1980s — as it led California over a fiscal cliff. The high-speed-rail line that was approved on Friday is a train to nowhere. And it’s offering Californians a nonstop ticket to their future as residents of a homegrown version of Greece.

— John Fund is national-affairs columnist for NRO.