Californians have a reputation for questioning authority. And increasingly, they appear to be questioning the High-Speed Rail Authority, which voters empowered in 2008 to issue $9.95 billion in bonds and build the nation’s largest such system.
Opposition hasn’t reached critical mass — not yet. But it is broad, and it includes Republicans, some Democrats, community groups, local governments, fiscal conservatives, and neighborhood preservationists.
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Reports from respectable engineering and financial teams, including state agencies, paint a far gloomier picture than the happy-talk done deal that’s been portrayed in the national media. Lawsuits further complicate the picture. The more money California sponges from states that have rejected federal high-speed-rail dollars, the more local support, which is critical for additional funding, seems to be melting away.
Money, or lack thereof, is the biggest problem, says Republican assemblywoman Diane Harkey, who spent 30 years in corporate finance and banking and has introduced a bill to defund high-speed rail. “We’re de facto bankrupt,” she adds. “We’re in this huge hole with a structural deficit. We’re trying to issue bonds for public works in the billion-dollar range and having problems getting any takers, and our rates are sky-high for municipal debt. . . . Is issuing more debt for high-speed rail a priority when competing for scarce resources for education, water, and local transportation?”
Just this week, a new report raised even more questions about plans to pay for the project: Compared with the plan the voters passed, the authors found, costs have doubled to $66 billion, and the scope of the project has been dramatically reduced. If built according to the original specs, the project would have the potential to almost double the state’s bonded indebtedness, to $200 billion or more. This would cost each of California’s 40 million residents $275 to $320 annually for 30 years.
The report, by retired Silicon Valley executives William H. Warren and William Grindley and Stanford Business School professor Alain Enthoven, used the Authority’s own, frequently revised line items to come up with the true price tag. A report by CARRD (Californians Advocating Responsible Rail Design) came up with similar numbers independently. And these estimates assume, Warren says, that a Republican House will provide $15 billion in “free money,” that municipalities will kick in $5 billion, and that private investors will contribute $35 to $54 billion.
Also devastating to supporters of the project are studies by official and quasi-official agencies that have questioned not just costs, but ridership and revenues — and thus the business plan that underlies the scheme. These include the state’s official “peer review” panel that oversees the Authority. In a critical 2010 draft report, it pointed out that the “Institute for Transportation Studies at the University of California at Berkeley, the Legislative Analyst’s Office, and the State Auditor’s office have raised sufficient concerns with the demand model so as to call into question the project’s fundamental basis for going forward.”
What’s the big deal about ridership estimates? The plan that voters approved specified that there would be no operating subsidies once the project had been built; therefore, if the ridership estimates are unreasonably high, there will be a budget gap. This creates what the panel called a “Chicken and Egg” problem: Investors expect a certain rate of return, and if it isn’t guaranteed, they’re not going to put up money; but the government can’t guarantee a rate of return, because to do so would be to promise illegal subsidies in the event of a shortfall. According to Harkey, the Democratic-controlled legislature is still waiting for new ridership estimates from the Authority, and it appears to be slow-walking the project until it sees something credible. A delay seems far more likely than outright killing the project, which is due to start in 2012.
Warren adds: “The real problem is, how will the legislature know they have a ridership estimate they can believe in — there is no track record of such estimates’ being correct. . . . The idea of doing a small project and seeing if they can validate a smaller forecast [before moving on to the full, massively expensive project] is not an idea they seem to be able to understand.”
If states were basketball players, California began with the natural talent of Kobi, MJ and King James rolled into one. No other state comes close to the level of beauty, climate, natural resources and overall potential of California. However, under a Leftist coaching staff, this extraordinary talent is sitting on the bench with a towel over its head.
California is a failed state. Perhaps near-term will be a wake-up call for many things. Too bad though, would've loved to have been going 200mph when an earthquake hits.
Yeah I don't know much about this project except that it is HSR WOO HOOO!. When will they realize that there is no daily need for long travel for like 99% of people. Each city or county is like it's own society or civilization.
What do you do when you arrive at a destination? Take a cab? It's likely not connected by additional mass transit routes unless you want to take a bus. I honestly don't know how many cities have a train system like NYC and I think Chicago.
I just get exhausted by all the senseless things that go on daily. Force-feeding does not make an idea go from bad to good.
The elected California Legislature and Governor are a like a bunch of addicts who are now expected to have the self-control to eliminate or drastically cut back on their drug use.
They not only will not do it...they cannot do it.
The State will have to 'spin, crash and burn' before the debt is resolved. Forfeiture on Bonds. Crushing Fees and Taxes on the rest of us.
Where's the logic? Who commutes between L.A. and Frisco ? I live in Ventura and the bus system does not run at night when I need it. There is not a route near my home and it's expensive. It's just awful! What a criminal misuse of money.
The sad fact is that California will have to hit rock bottom (total bankruptcy) before the state will ever get better.
The Calif government (state and locals) will keep taking and taking, regulating and regulating, borrowing and borrowing, until it simply stops due to lack of money. Also the lights will go out due to their insane energy policies.
The only question is whether that will be in 2018, 2025, 2037 (or whenever).
For conservatives who live in the state (like I used to), either move yourself or as much of your assets as possible.
I attended a recent meeting by the High Speed Rail board at a local community meeting. Many people were upset about the route thru Santa Clarita and the fact that the people presenting the project were totally unprepared to address local concerns of routing, property condemnation, noise, pollution, station access, etc.
The sooner they kill this project the better off California will be.
I can see why they want to do high speed rail because Amtrak is such a success. Its looses money and no one rides it. Its never a problem to get a seat.
I have an idea, why doesn't California let the farmers farm in the San Joaquin Valley? Hey it'll provide jobs. The little 2" minnow doesn't provide jobs nor food. But the environmentalists apparently trump the need for jobs.
Likewise, unions workers needing jobs (via taxpayer money) trump common sense. Go ahead, build the high speed rail. But when California is broke, no bail out. You break it, you buy it.
The HSR debate throws up interesting wider questions about how to deal with mass transit in the state… External Link
When local services are so poor and services such as CalTrain are about to get worse, it's hard to make the case for HSR, even though the economic benefits may outweigh the financial investments 5-10-20 years down the line.
It's time for a more strategic approach to planning mass transit for the state's growing population.
They are trying to present light rail as a fait' accompli in Detroit too. Maybe if all the bankrupt Michigan cities get a stop the economic boon will save them all!
Check out how much we need a train here:http://www.youtube.com/watch?v=Ld05-5OOLRg
One bizarre phenomenon is that they're trying to shove a hideous and completely un-aesthetic elevated High Speed Rail monstrosity *up* the Peninsula from San Jose to San Francisco, a densely and wealthy populated area, when there's already adequate and useful ridership in place.
The giant obnoxiously tall elevated tracks and electrical wires will severely and very negatively impact the home-values of *million-dollar* houses along the tracks, from very wealthy Palo Alto (Steve Jobs lives in a multi-million property just a few blocks away from the rail-line) and Menlo Park (med home price $1,008,500), and through mega-rich Atherton (med home price $3,595,000) on up - in altogether a deep blue Democrat-centric base populated by many-many LAWYERS. These guys don't sit around on their butts when their capital investments and lifestyle are at stake.
To get the land, construction will require massive Kelo-style takings, or it's go to cost a fortune in litigation and pay-outs. It's just a really-really stupid idea.
The Choo-Choo Train obsession sweeping the land is fascinating.
All over the country you hear the very same arguments for either Light Rail or High Speed Bullet Trains being made by Progressives.
How can a 19th Century technology ever be progress? If these busybodies really cared about reducing dependence on fossil fuels, reducing traffic gridlock, saving the planet, etcetera;
why don't they advocate the 21st Century technology of Telecommuting?
Obama the smartest man in the world that we all know he is, deciding high speed rail is the way of the future as it is in China and Japan.
Mr. Obama, and all of you people in states facing this problem need to learn a few facts, or get a Reality Check. I lived in Japan for 6 years, sure I was stationed there in the Marines, but that is sort of like living there. It works in Japan for a very specific reason, population density. Where the high speed rail runs in Japan has so many more people than California and New York combined it isn't even close. Distance, Japan is a small place by comparison to the United States. You can get ridership to maximum if you have way more people living in way less space than anyplace in America. It would work here too if everyone in America only lived in California, then it would be the same as Japan.
Likewise with China, where they have the high speed rail is so dense with people it is insane. Access to the train is a population larger than the entire population of the US, and the train doesn't have to travel all over China, it travels a rather small route.
California is too big, with too few people to ever make high speed rail anything but a stupid idea. Yes I know Americans tend to think California has many people, but I suggest you go live in Japan or China for awhile and you will understand the problem.
Mr. Obama this Reality Check is for you, because for all of the Czar's you have working for you, they don't seem to be very smart. I should be getting paid for explaining all of the things your administration fails to comprehend.
As much as we'd like to believe otherwise, the root of the problem is that cars and roads are MASSIVE money-losers, and NEVER come close to paying for themselves. External Link
As has been pointed out many times, even TxDOT admitted this: External Link
"there is not one road in Texas that pays for itself based on the tax system of today. Some roads pay for about half their true cost, but most roads we have analyzed pay for considerably less."
"For example, in Houston, the 15 miles of SH 99 from I-10 to US 290 will cost $1 billion to build and maintain over its lifetime, while only generating $162 million in gas taxes. That gives a tax gap ratio of .16, which means that the real gas tax rate people would need to pay on this segment of road to completely pay for it would be $2.22 per gallon".
Imagine adding $2.22 to the $3.25 per gallon we're paying today
We need more passenger trains and we need them NOW.Here in Texas, we're facing a $165 BILLION shortfall due to losses due to over-reliance on cars and roads - the most wasteful form of transportation known to man. External Link
AUSTIN — Texas faces a transportation funding crisis.
During the next 20 years, the Texas Department of Transportation will need $315 billion to spend on the state's roads and freeways for maintenance and construction just to keep traffic from getting worse, according to a report commissioned by the Texas Transportation Commission.
The gasoline tax, which provides the vast majority of TxDOT's funding for roadwork, will generate about only $160 billion.
You must compare the projected ridership estimates to that ofautomobiles. The average car carries 1.2 people - one of which is the operator. That's 0.2 passengers. For a typical 6-seat sedan, that's only a 3% load factor! If any plane, train, or bus carried a 3% load factor it would be terminated immediately.
I want a bus that takes me to and from work. Nobody commutes between L.A. and Frisco.
In Ventura County the bus service stinks - there's no night service, more routes are needed and fairs are too high. So they want to spend money on this train ... what are they trying to accomplish?
"The average car carries 1.2 people - one of which is the operator. That's 0.2 passengers."
You overlook that the driver is not a chauffeur. The capacity of your 6- passenger car is more like 20%. Your average government funded transit service would love a 20 percent load factor.
Nice try at manipulating the numbers to support your otherwise untenable opinion, though.
Oh, and 6- passenger cars are not that common any more. 1.2 passengers in a 4- passenger car is a load factor of 30%.
