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has since withdrawn the request but he nevertheless is supporting a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.