John Fund has a good piece over on the homepage on California’s recent vote to fun its high-speed fail boondoggle. He writes:
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).
Actually, there might be some good news on this front. Although the money has been approved, construction is far from imminent. From today’s WSJ:
For Now, Bullet Train May Go Nowhere
SACRAMENTO, Calif.—After clearing a major legislative hurdle, California’s proposed bullet train between Los Angeles and San Francisco still faces obstacles—including lawsuits and uncertainties over future funding—that could delay it for years.
Friday’s narrow state Senate vote approving $4.7 billion in bonds for the train and related projects sends the funding bill to a likely signing by Gov. Jerry Brown, a proponent of high-speed rail. The vote helps ensure the state will get to keep $3.3 billion in federal matching money for its efforts to build the nation’s first bullet train. Federal officials had warned the state it had to commit to the funds this year in order to use the money, which mostly came from President Barack Obama’s 2009 economic-stimulus package.
Finance experts said the state should have little trouble selling bonds for the issuance, because interest rates are so low on many alternative investments and the stock market has been mixed. The bonds approved by the legislature are part of nearly $10 billion in state bonds that California voters in 2008 earmarked for the train network.
“I would characterize the demand for bonds as insatiable,” said Jim Sarni, managing principal of Payden & Rygel Investment Management, a money-management firm in Los Angeles.
But actual construction of the line—which state officials have hoped would begin this year—could be delayed in part by farmers who object to the California High-Speed Rail Authority’s plan for the construction of the first phase of the 800-mile route through their fields in the state’s Central Valley.
The farm bureaus in Merced and Madera counties in June filed suit in state Superior Court in Sacramento asking a judge to nullify an environmental-impact report the rail authority certified as one of the final steps toward breaking ground on a 60-mile stretch between Merced and Fresno. Among their concerns: that the rail line would disrupt about 1,500 acres of farmland by cutting off irrigation canals and generating too much wind from passing trains for bee pollination. Officials of the two bureaus say more than 500 farmers whose lands lie in the path of the route also plan to fight any attempts by the state to seize their properties.
“It’s going to be a long, long battle for the rail authority,” said Amanda Carvajal, executive director of the Merced County Farm Bureau. “We’re lawyered up.”
The rest here.