California Voters Were Railroaded on High-Speed Rail

Wildly inaccurate ridership predictions could cost taxpayers billions

In theory, it sounded like a good idea. Who wouldn’t want sleek new trains zipping up and down the state at high speeds for cheap fares? The only problem is that the assumptions made by the California High-Speed Rail Authority in devising its 800-mile, high-speed train system are more fantasy than reality, and the project cannot be justified by economics or the state’s budget situation.

Advocates don’t ask much, only that we believe that our high-speed rail system will cost less, run faster, carry more people and be more profitable than any high-speed rail system in the world – and, of course, that we pony up tens of billions of dollars to build it.

To put it mildly, voters were, ahem, railroaded during the November 2008 election when the high-speed rail bond measure narrowly passed and the so-called business plan for the project was conveniently delayed for months until days after the election. That $10 billion bond was merely a down payment on a system expected to cost a total of $45 billion, but even this figure is grossly understated, as observers of Los Angeles’s Blue Line light rail, the San Francisco-Oakland Bay Bridge, Boston’s infamous “Big Dig” and virtually every other large government infrastructure project can attest. A September 2008 Reason Foundation report estimated that the system would actually cost between $65 billion and $81 billion.

The ridership estimate is crucial because it affects many other assumptions – from ticket prices to reductions in traffic congestion and emissions – and it is even more flawed. The rail authority assumes that between 88 million and 117 million people will ride the trains each year. To put that in perspective, consider that the entire annual ridership of the Amtrak system, which includes 21,000 miles of routes and more than 500 destinations in 46 states, is less than 29 million. Amtrak’s high-speed Acela Express service, which runs from Washington, D.C., to New York City to Boston, serves a larger and denser market than the planned California system and only commands a ridership of a little more than 3 million passengers a year.

Even if the project’s assumptions weren’t so flawed and the system could somehow work as planned, California simply cannot afford it. The bubble gum and sealing wax the Legislature used to plug the state’s budget holes are leaking left and right, growing the deficit to at least $21 billion. California has the worst credit rating in the nation, making the issuing of bonds extremely expensive, and it can’t afford the debt service for the $10 billion in high-speed rail bonds already approved, much less for the tens of billions of dollars extra that will be required to complete the system. At a time when the state is struggling to fund its core programs and priorities, it is lunacy to divert $650 million a year to subsidize a very small portion of people traveling between Los Angeles and San Francisco.

If there truly is a market large enough to support high-speed rail, then let private-sector businesses and investors take the risk and build it. The more likely scenario is that it hasn’t been built already because the economics and claims of high-speed rail advocates simply aren’t justified. Especially now, California cannot afford to embark on such a boondoggle.

Adam Summers is a policy analyst at Reason Foundation. This column first appeared in the San Diego Union-Tribune.