High-Speed Rail v. California Deficit

Paul  Weyrich
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Posted: Oct 15, 2008 1:57 PM
High-Speed Rail v. California Deficit

As soon as Congress passed the $700 billion bailout, California's Governor Arnold Schwarzenegger sent a letter to Treasury Secretary Henry M. Paulson, Jr. asking for a $7 billion loan to make up for the enormous gap between the California budget and projected revenues. The Governor has since withdrawn the request but he nevertheless is supporting a proposition on the November ballot which would have California go further in debt, to the tune of $9.9 billion dollars, to build a high-speed rail system between Los Angeles and San Francisco.

I am correctly seen as a proponent of rail transportation. I must wonder if now is the time to build this "bullet" type train, given the State's dreadful fiscal situation. Shikha Dalmia, a Senior Fellow at the libertarian Reason Foundation, quoted the Governor as telling an audience at the Commonwealth Club of California that "...just because we have a problem with the budget does not mean people should vote 'no' on high speed rail." This from a Governor who said he intended to veto the bill which would place the issue before the people. He was against it before he was for it.

Proponents of high-speed rail claim it would create 450,000 new jobs. I have no idea as to the source of that figure but high-speed rail projects in Japan, France, Germany and Sweden have not created nearly that number of new jobs. Perhaps the proponents' claim that high-speed rail would reduce greenhouse gases would prove correct but the claim that it would reduce traffic congestion is somewhat dubious.

Dalmia points out that the State's general-obligation debt has tripled in the past six years. Without no new debt California would spend 6.1% of its budget merely to service the debt. The deficit keeps on growing to the point that the Governor wrote that remarkable letter to Paulson.

This is only the first phase of a plan which fully would be implemented by 2030. By then high-speed trains would run from San Diego to north of San Francisco. (Some have even suggested hooking Sacramento into the system.) Well and good, but the proponents claim they would not need to request more money at that point. Similar claims were made by the British and French when they built the Channel Tunnel. Yet they have had to seek more money twice already and the end is not in sight. Already the estimates to build and operate the high-speed rail operation are double the original projections. The Reason Foundation claims that the Rail Authority has underestimated expenditures by $30 billion because the Authority has not fully taken into account the added expense of building "in the world's most active geological zone and erecting sound walls to abate noise and other nuisances."

The Rail Authority also claims that 65 million people would ride the system annually yet that is far higher than either France or Japan, both of which are more rail-oriented.

In addition, the Rail Authority is promising a one-way ticket for $70 but that is far lower than the New York-Washington route of Amtrak's Acela trains and other routes the world over, many of which are shorter than the LA to San Francisco route.

Were I a voter in California, as strong an advocate of rail as I am, I doubt I could bring myself to vote for this project. Were the State in decent fiscal shape I would almost certainly support the project. Somewhere in the USA a high-speed system needs to be built. However, the projections of cost and ridership and revenue need to be realistic. California is just too broke to afford to build this system at this time.

Unlike the Reason Foundation, I do not think that this project would be a white elephant. Millions would ride it but the projections being sold to the voting public are way off base. If California's fiscal condition were in order then would be the time to bring this proposition back. Passage this year is far from assured. If Californians hear the real cost of high-speed rail I would not be surprised if they ended up where as I have - namely, "No" on Proposition A.