The California high-speed rail project has become a disaster before the first track has been laid. Perhaps that is a blessing because it may allow the state to pull the plug on the project before sinking billions of dollars it does not have into it. Assemblywoman Diane Harkey (R-Dana Point) has introduced a bill, AB 1455, which would eliminate any bond funding for the project that has not already been contracted, state Senator Doug LaMalfa (R-Richvale) has promised to bring forth legislation that would authorize a revote on the project, and Beverly Hills resident Peter Seidel has started circulating a petition for an initiative called the No Train Please Act which would kill the project entirely.
Considering that cost estimates have soared from between $40 billion and $45 billion just a couple of years ago to between $98.5 billion and $117.6 billion now, and ridership estimates have plummeted from 117 million passengers per year by 2030 to between 23 million and 34 million per year by 2035, while the state is running a $9.2 billion budget deficit, a $10 billion unemployment fund deficit, and an unfunded pension liability in the range of $400 billion to $500 billion, pushing forward with the high-speed rail project is unconscionable and incredibly fiscally irresponsible. Yet Governor Jerry Brown is trying to move ahead with the project at the same time he is pushing a $35 billion tax increase ($7 billion a year for five years).
In my new commentary I argue that it is time to face reality on this boondoggle of a project and end it before California pours billions of dollars down a rat hole. Below is an excerpt of the article.
Even under optimistic scenarios, the CHSRA has identified only about 15 percent of the funding necessary to build the project. The other $85 billion or so is supposed to somehow come like manna from heaven, primarily from the federal government, which is engulfed in an even greater fiscal crisis than California (not to mention the fact that Congress has repeatedly indicated it is not going to support any additional high-speed rail funding any time soon—see here, here, and here). The CHSRA also claims some of the funding will from the private sector, which has shown no interest in investing in a project with poor prospects, an unrealistic business plan and massively inflated ridership predictions.
Earlier this month, the California High-Speed Rail Authority’s own Peer Review Group even recommended that the legislature not approve bond sales for the project, concluding, “We cannot overemphasize the fact that moving ahead on the HSR project without credible sources of adequate funding, without a definitive business model, without a strategy to maximize the independent utility and value to the State, and without the appropriate management resources, represents an immense financial risk on the part of the State of California.”
Nevertheless, “We’re pushing forward,” Gov. Brown said recently of the administration’s plans for the high-speed rail system. Added Brown, “We’re going to build, we’re going to invest, and California is going to stay among the great states and the great political jurisdictions of the world.”
Not if we keep spending money we don’t have on boondoggle projects, we won’t, Gov. Brown. He then reiterated his support for the project in his 2012 State of the State address and called on the legislature to approve the appropriation of bond proceeds for the first segment of the project.
This is like your neighbor, who let’s say is an average Joe struggling to get by during the ongoing economic malaise, announcing that he is going to buy an expensive Tesla Roadster (gotta support “green jobs” and all that), even though he already has a car and is having trouble paying the rent and utility bills as it is. Complicating matters are the facts that he does not know just how high the price of the car will be (it has already more than doubled since last year) and he probably won’t be using it very much anyway. Oh, and you and a whole bunch of other people who haven’t agreed to it yet will be paying for almost all of it. This is the insanity of the California high-speed rail project.
See the full article here.
Related Research and Commentary:
” The California High-Speed Rail Proposal: A Due Diligence Report
” “California High-Speed Rail: The Next Stop is Bankruptcy”