California High-Speed Rail: Way Off Track | Citizens Against Government Waste

California High-Speed Rail: Way Off Track

The WasteWatcher

In November 2008, California voters approved Proposition 1A, a $9.95 billion bond measure to fund part of the state’s share of the proposed high-speed rail line from Anaheim to San Francisco. The bond was approved by a narrow margin of 52.7 percent of the 12.6 million votes. The railway was supposed to be up and running by 2020, and the total cost was estimated by the California High-Speed Rail Authority (CHSRA) at $33 billion. While it was easy to see why some balked at the price estimate, one could also understand its support, at least among potential beneficiaries. After all, taxpayers outside the rail corridor, both in California and across the country, were supposed to pick up $6.8 billion, or one-quarter of the railway’s $27 billion initial segment.

At the time, the defects in the plan were pointed out in a joint Reason Foundation-Citizens Against Government Waste-Howard Jarvis Taxpayers Association report. The report disputed the $33 billion cost estimate, concluding that it could be as much as $81 billion. The groups said that the ridership projections were “overly optimistic,” and there were “bloated assumptions with respect to greenhouse gas emissions, insufficient attention to environmental impacts, and unachievable travel times between major markets.” Undeterred, CHSRA continued to sing the project’s praises.

However, as the planning process dragged on, the $33 billion estimate proved to be inadequate, as predicted by the taxpayer groups. An April, 2010 report conducted by State Auditor Elaine M. Howle pointed out that the CHSRA had budgeted for at least $17 billion of federal assistance, and that the authority had given $4 million to contractors despite “no evidence from the Program Manager that the contractors had performed the work.” The same report found that the regional contractor for the railway’s Los Angeles to Anaheim segment, generally regarded as among the cheapest, simplest sections of the project, “completed 81 percent of planned hours but spent 230 percent of planned dollars.”

Understandably, CHSRA’s public relations team resigned in the summer of 2011, just months before the end of its $9 million contract. Yet, even as the cost estimates soared, the CHSRA, which spent $250 million before laying a single mile of track, could still point to the “Yes” vote on Prop. 1A as a clear mandate to keep muddling through; at least until now.

In a spasm of straightforwardness, CHSRA announced in November, 2011 that its total cost estimate had risen to $98.5 billion, or three times the original amount, and that the project’s completion date would be pushed back to 2033, thirteen years behind schedule. On December 6, a Field poll found that 64 percent of respondents support another public vote on the project, compared to just 30 percent opposed. The same poll found that 59 percent of respondents would reject the project if given another chance, along with 37 percent of those who claimed to have voted for it in 2008. Public support is waning, and the current backlash is directly attributable to the new, radically higher estimates, which are only going to increase. The inevitable fights over who gets booted from ideal track pathways and which mayor gets to cut the ribbon at his shiny new train station have hardly begun.

On the same day that the Field poll was released, Department of Transportation (DOT) Secretary Ray LaHood testified before the House Transportation and Infrastructure Committee that he “won't be dissuaded by the naysayers and the critics.” But unless Secretary LaHood has plans to finance the entire project at the federal level while ignoring the opposition of California taxpayers, it is unclear how California high-speed rail can possibly be funded. The proposed train system will cost more than the state’s entire $86 billion budget in fiscal year 2011, and California’s finances are in appallingly bad shape. In November, Governor Jerry Brown announced that the state will face a $3 billion budget shortfall before the end of 2011, one that is expected to grow to $13 billion by July 2012. California’s unemployment insurance fund is insolvent, and state-run education programs are facing deep automatic cuts, including the cancellation of school bus services in the Los Angeles Unified School District.

California’s high-speed rail proposal is an entirely different animal than it was in 2008. It is dramatically more expensive than the project that was sold to the public, and state finances have seriously deteriorated in that period. The 2008 Prop. 1A vote should be treated as irrelevant; voters were deciding on an issue that bears little resemblance to present circumstances. Gov. Brown should call for a new vote based on what the public now seems to understand: California has been sold a bill of goods, and taxpayers everywhere have more important things to worry about than high-speed rail.

-- Luke Gelber

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