Thursday, November 4, 2010

High Speed Rail and Vision California - Boondoggles

With the change at the top in California, what will be some of the big things that Governor Brown will try to deal with? Will he, by doing so, tick off his supporters and constituents and at the same time raise the eye brows of the loyal opposition? Let’s start with a big ticket, in fact THE biggest ticket on the agenda of the state: the “Vision California” plan and the high speed rail system.

The “educated citizens” of the state have voted to support AB32 (Global Warming Act) and in doing so give ballot lip-service to the $45 billion high speed rail line (current estimate) to connect California’s northern and southern urban areas. I would caution the reader to remember that the new eastern span Bay Bridge construction estimates are three to four times the initial estimates of $780 million to $1.4 billion; it is now pegged at $6.3 billion. Simple math (pardon my hyperbole) would suggest by the time this rail system is functioning throughout the state it will have run the costs north of $100 billion—about $3,000 for every California resident (or 15 round trips on Southwest Airline from LAX to SFO). And by the way Governor Brown, as mayor of Oakland, had a big hand in adding to the cost overruns of the bridge by challenging the design.

Yesterday the new governor elect of Ohio, John Kasich, announced that he is putting the brakes on the Cincinnati to Cleveland high speed rail in his state. It is one of 13 selected systems to receive federal money. The amount he turned down was $400 million. How much from the state coffers has yet to be determined. For now the 3C, as it is called, is dead. Why? One can assume that with all the difficulties in the federal budget and Ohio’s state budget it is time to put off buying those new toys. It can be done later; the cities aren’t moving, the land is there, and when the economy is right, built it then. The end of the world, due to global warming, will just have to wait. This rejection, along with Governor Chris Christie of New Jersey’s canceling of the new rail tunnel under the Hudson River, is beginning to show a trend.

These may be the first significant salvos across the tracks of high speed rail. With the change in congress there will be a major review of the funding of these systems. This review is similar to the slow decline in federal dollars for state highway systems. Now states and counties are carrying the costs of road construction and maintenance. There will not be the rich uncle to fund these systems; they will have to be paid for by the states and the users. Any federal funding will be for upgrading and expanding existing rail systems, commuter lines, and transit. Transit systems where millions of people will reap the benefits, not thousands.

Governor Brown will be faced with some very hard choices. As California’s Attorney General he led the fight, and contributed to the confusion, about global warming and air quality issues, to the point of holding the updated General Plans of cities hostage until they toed the line (and spent millions doing so). Brown now says the state needs to cut wasteful spending and lower-priority programs. This will be very difficult, painful, and my guess, extremely difficult for him.

The rail is an expensive distraction and boondoggle, especially in a state that has a $12 billion budget deficit. There are hundreds of millions of dollars being spun off to unions, planners, engineers, brokers and land owners in an attempt to ADD four to six hours of travel time between the north and the south. This system will add tens of thousands of dollars to tax bills and bond indebtedness to every California. I do not believe there is the stomach to fund these systems in congress during the next two years; there will be no money coming to bail these programs out. And based on the results of November 2nd, Brown said, “…the electorate is in no mood to add to their burdens.”

We cannot afford these systems. They must be self-sustaining. There are cracks appearing in the world of solar energy (once they lose their subsidies, they do not make sense), electric cars (comparative costs to operate), and expensive high speed rail. To continue throwing federal and state tax money down these holes is vanity. We need to move on and rebuild and improve the current infrastructure, before we start asking for new Christmas presents from Santa.

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