Opinion: The High-Speed Money Pit

California High-Speed Rail Authority

An artist's rendering of a high-speed rail terminal, it innacurately portrays the trains as having riders

Robbie Gordan

In recent years, the California state government has faced chronic budget shortfalls, pushing taxes to some of the highest levels in the nation. Recently, Democrats passed a new budget that assumes voters will approve yet higher taxes and forces cuts to close the latest $15.7 billion dollar deficit. Add to this picture unfunded pension liabilities of $240 billion, and one would imagine that state legislators would hesitate to shell out billions of dollars for a project with a small chance of panning out.

Not Sacramento Democrats, who recently rammed through, by a one-vote margin, a bill that would fund early work on a high-speed rail initiative nearly certain to end in failure.

The bill in question provides $8 billion to start construction on a high-speed rail system linking the Bay Area, parts of the Central Valley, and Southern California, that will eventually require $69 billion, if (and it’s a big if) the project is completed on budget.

Even if we forget about the bigger debate on whether a high-speed rail is a good idea in theory, the sheer uncertainty involved in funding the project led the non-partisan Legislative Analysts’ Office to come down strongly against the bill. Why? Funding “remains highly speculative.” The report found that the High-Speed Rail Authority had secured about $9 billion in state funds and $3.5 billion in federal funds out of the $69 billion needed. In other words, it appears highly unlikely that enough money to complete the rail line will ever be appropriated. Instead, the state will be stuck with miles of useless rails that go nowhere and serve no one. It is this bleak reality that convinced the Democrats in the Senate who knew most about the bill to oppose it: every single Democrat who sat on the High-Speed Rail Oversight Committee voted no.

That should be a good enough reason for any logical individual to oppose high-speed rail, but California’s Democratic leaders have shown themselves time and time again to be above logic and unfettered by fiscal reality. They point instead to “statistics” claiming that the government will eventually have to spend a much greater amount to maintain roads and other infrastructure to support traffic that the high-speed rail would otherwise have carried. These claims are not dubious; they are blatantly false.

The High-Speed Rail Authority points to a study predicting that the state would have to spend $171 billion to maintain infrastructure without high-speed rail to justify the massive expenditures. The study, conducted by a New York firm with ties to the 2008 campaign to pass high-speed rail bonds, fails to estimate the cost of infrastructure with rail (a more valid number for comparison).

Furthermore, the study doubles the number of train seats in the current plans, from 500 to 1,000. It also doubles the number of total trains. It counts the costs of expansions that will not be needed for hundreds of years. These errors add up; the Wall Street Journal estimated in 2008 that the study exaggerated costs by a factor of 60. A Burlingame official called the spectacular mental acrobatics, “completely divorced from reality.” The polite term for all this is “mistakes.” The accurate one is “lies.”

Yet even the lowest estimates of the cost of alternative road construction assume that Californians will use high-speed rail over other forms of transportation in the first place. Supporters of high-speed rail should ask themselves, “Would I take a train when that train is as expensive as flying and significantly longer?” The most likely riders of high-speed rail are individuals who already ride existing rail-lines, meaning that the impact on the number of cars on the road will be minimal.

Perhaps Sacramento should stop funding far-fetched fantasies and invest money where it’s needed, in crucial areas such as education.

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14 Responses to “Opinion: The High-Speed Money Pit”

  1. egrose on September 24th, 2012 5:51 pm

    I had no idea how much the High-Speed Rail Authority was simply making up in their “study.” I completely agree – for the amount of energy, time, and money that this would cost, it is completely not worth it. There are far better areas where this money could go. Great article Robbie!

    greid Reply:

    I agree with Emily. It seems that this plan would require a huge budget, and have a huge risk of either going over budget or halting mid-project.

  2. Meredith on September 24th, 2012 7:47 pm

    Could not agree more

  3. Virsies on September 24th, 2012 7:50 pm

    I can’t believe they’re even considering this. It’s doubtful anyone would use such and expensive and unnecessary rail-line when other, less expensive and more efficient forms of transportation exist (i.e. buses, smaller trains, cars, etc.). Despite California’s relatively stable economy, this would be a mistake, money-wise. I definitely agree that the money could and would be better invested in things like education.

  4. Nicky H on September 25th, 2012 2:39 pm

    While I agree that the amount of money being spent on this project is approaching ridiculous numbers, especially for this economic climate, I believe that a high-speed rail would be a great addition to California and the country as a whole. The aim of the high-speed rail project is to provide faster commute times across the state than driving, and while slightly slower than a plane, the train (from what I understand) will be cheaper. The author of the article should have included that estimated price of a trip from San Francisco to Los Angeles to give an idea of how the 2.5 hour estimated trip will cost in comparison to an airplane ticket or the cost of gas.

  5. nhug on September 25th, 2012 2:41 pm

    While I agree that the amount of money being spent on this project is approaching ridiculous numbers, especially for this economic climate, I believe that a high-speed rail would be a great addition to California and the country as a whole. The aim of the high-speed rail project is to provide faster commute times across the state than driving, and while slightly slower than a plane, the train (from what I understand) will be cheaper. The author of the article should have included that estimated price of a trip from San Francisco to Los Angeles to give an idea of how the 2.5 hour estimated trip will cost in comparison to an airplane ticket or the cost of gas.

    rgordan Reply:

    If you want to do it in 2.5 hours, you would have to buy an “express” ticket for around $123 one-way. Feel free to do you own research here, but I found that booking in advance one-way was in the mid 80 dollar range. That was also the price for a regular ticket. And this is just going on the numbers from the high-speed rail authority, in reality the fares will probably be much higher.

    rgordan Reply:

    just realized I wasn’t very clear:
    express train ticket: 123
    airplane ticket: mid-80s
    regular train ticket: 81

  6. Ryan on September 25th, 2012 5:13 pm

    The high-speed rail is not a necessity. California does not need to invest billions of dollars in infrastructure that is not necessary. As Robbie stated, alternative means of transportation are much more efficient and cheap. Interesting article. It’ll be interesting to see how this unfolds.

  7. Tyler Finn on September 25th, 2012 7:22 pm

    This is yet another example of irresponsible spending and leadership by our legislature. While I believe that it is imperative that we invest in our infrastructure, high speed rail is not the answer in this instance. The high speed rail is costly to our state at a time of budget cuts (especially to our education system) and disruptive to all those who live near the proposed route on the Peninsula. Furthermore, there has been no demonstrated need for such a project! Freight railways in the United States lead the world and form the backbone of our transport economy, but passenger railways in the US are just the opposite. Notably, the freight rail system was and IS not built by the taxpayers or government, but by the private sector. If you ask the freight railways companies what they want, the answer is clear: to be left alone because they know what they are doing. Let’s allow the private sector decide when to build a passenger railway from LA to SF, which is by all accounts a luxury and not a necessity for our economy or state’s future. If they won’t do it, there’s a good reason why.

  8. alai on September 25th, 2012 7:33 pm

    I always thought that a high-speed rail would be great, but I had no idea about these factors, especially the cost–I can’t believe it would cost as much as/more than a plane ticket. Really informative article.

  9. Zoe Pacalin on September 25th, 2012 7:46 pm

    To add to the cost of the individual ticket, often times one would not want to go to the one single location that the high speed rail stops at in the north or south, and would therefore have to pay for ADDITIONAL public transportation to take them to their destination. The problem with the high speed rail also that it bypasses the Bay Area.

  10. shoover on September 25th, 2012 9:10 pm

    Interesting. I was in favor of a high-speed rail, but these numbers are outrageous. Might as well take the plane for the same cost and a faster time. However, one thing I do think a high-speed rail would add would be more stops specific to where people need to go, not just the bigger cities, which is something planes don’t truly provide.

  11. josephrabinovitsj on September 27th, 2012 7:59 pm

    I agree that that is quite a bit of money for a high speed rail. However, maybe that’s the cost of clean transportation in the midst of an environmental crisis