Opinion: The High-Speed Money Pit
September 24, 2012
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.