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Proposition 1A: High-Speed Rail Bonds ($10 Billion) – YES

By Peter L. Stahl
Pete Rates the Propositions

(Please see My Semi-Biennial Lecture on Bonds for my opinion on bonds in general.)

Wheeeeee!

Would you like to zip across California at 220 MPH? To tunnel through mountains and glide through cities? To embark and arrive at futuristic stations straight out of The Jetsons? Of course you would!

The California High-Speed Rail Project hopes to link northern and southern California with sleek, clean-running, super-fast passenger trains. The first terminals will be in Los Angeles and San Francisco, with eventual lines to San Diego, Irvine and Sacramento. The electricity that powers the trains will come from windmills and other renewable, non-polluting sources. Judging by the fabulous animations on the Rail Authority's site, the stations will be breathtaking transit cathedrals with high-arched Plexiglas canopies.

The estimated cost for the LA-to-SF line is $32 billion. Prop 1A will provide $9 billion in bond money to get the project started. Washington is expected to add $7 billion (an 80% match), and public-private partnerships may kick in as much as $7 billion.

Uh oh. That adds up to only $23 billion. Where's the rest of the funding?

Okay, let's concede the point up front: Prop 1A will get us only part of the way there. In all but the most unlikely scenarios, voters will have to pass another large bond measure in a few years in order for the promised SF-to-LA line to become a reality.

It kills me that no one seems willing to admit this. Even with the addition of federal and private funds, this proposition cannot possibly build the promised high-speed rail system. We will all feel horribly manipulated in a few years when, after massive construction has started, we must vote again for more bond money. I am livid at the proponents for what is either a denial of reality or a bald-faced deceit.

But my regular readers will remember that you should never oppose a measure because of what it doesn't do. So let's examine what Prop 1A can do.

Realistically, here's what I see happening if Prop 1A passes. The federal government will kick in $7 billion, but the credit crunch will make it impossible for public-private partnerships to raise more than a couple billion. With just $18 billion available, the project will be scaled back to the highest mile-per-dollar segments, meaning rural areas where rights-of-way are cheaper and fewer grade separations are needed. So the first segment will link, say, Palmdale in the south to Gilroy in the north. When that's completed, around 2016, you'll be able to travel the 300-mile leg in ninety minutes. Metrolink and CalTrain will provide express service from the high-speed terminals to LA and SF, thanks in part to the $950 million in Prop 1A that's dedicated to existing commuter rail lines. So the total trip from LA to SF could take as little as four hours. Power for the trains may need to come from conventional generators instead of wind at first, and stations may be rather plain.

At that point, I predict it will become obvious that this is real, and that it makes sense to spend the billions to extend high-speed rail into major cities. Further bond measures will pass easily, and by 2024 we could indeed be shooting from San Jose to Burbank in two hours.

Two things make me think it will be clear that high-speed rail is worth all that money. First, this type of system has been a huge success in Europe, particularly in Spain, where the terrain and population density are quite similar to California's. Their high-speed rail system began in the mid-1990s with a 300-mile line from Madrid to Seville. Reliability is so high that the system refunds riders' fares if trains are even six minutes late. The recently opened Madrid-to-Barcelona line is so popular that it has already taken 30% of the travel market away from the airlines.

Second, people will start to consider what will happen if we don't build a high-speed rail system over the coming decades. California's population will continue to grow, of course, so travel between north and south will only increase. Without high-speed rail, there will be more congestion, more pollution, more frustration, and more traffic accidents. We'll be trying to get by in the 21st century with 20th-century tools. It will be like trying to survive in the 20th century with horse-and-buggy technology.

California is one of the world's leading economies. Our competitors around the globe, from Japan and China to France and Spain, have developed high-speed rail. Should we join them, or should we pretend that our highway system will be adequate in the mid-21st century? Yes, the required investment is huge, but that's what it will take to keep California thriving.

Pete Rates the Propositions is non-partisan and unaffiliated with any candidate or organization. Pete remains obstinately undoctrinaire, considering each ballot proposition on its merits. He is proud to have offended (and persuaded) voters of all political stripes. This originally appeared on Pete Rates the Propositions and is republished with the permission of the author.

Posted on October 09, 2008

Comments

Do you REALLY think with even democrat Perata touting a short-term deficit of $5 billion JUST AFTER passing that budget less than a month back that the state can afford this?

Do you REALLY think the federal government will "chip in" after bailing out the unexpected and unbudgeted expense all those bad mortgages, etc., to the tune of over $700 BILLION PLUS?

Just WHO will buy a bond from the State of California with our bad economic track record? Heck, we are asking the feds for a $7 BILLION loan RIGHT NOW.

Also consider:

-There are NO public-private partnerships that "may" chip in as much as "$7 billion". Name ONE even considering it. (How can you even guess to a $7 billion chip in without ONE such partnership in place? This isn't monopoly money we are talking about here).

-There is NO curent business plan explaining HSR as the legislature "discovered".

-There is NO right-of-way agreement with the Union Pacific Railroad where HSR would share that space.

-There is NO finalized route location!!! This is left up to politicians AFTER taxpayers potentially pony up this bond!!!

-The electricity to power these electric trains will come from windmills??? You have got to be kidding... We are in the state which needs to "Flex your power now" which is double speak for there isn't enough electrical power NOW to power all of our current needs, hence the citizens need to "conserve" electricity.

(Build nuclear power plants; THAT will generate the power we need for this AND satisfy our lack of power in general, perhaps even desalinate that overaboundance of salt water to the west to grow our crops, etc.. What if the wind don't blow? (windmills) or the sun don't shine? (solar)...)Funny, you don't even mention this power source. Why not? (I think I can guess).

Hope a little dash of cold reality woke you up from your dream world. Welcome back to the real one.

Posted by: Jay Gould at October 9, 2008 04:50 PM

Thank God for Prop 1A passing! I agree fully with Peter Stahl! Right on! Regardless of the state's budget issues, we must build this now. Budget deficits come and go. In 20 years, (when we can't commute anywhere because of too much congestion) we should not look back and regret not doing this. We MUST build this NOW.

Posted by: DavidM. at November 6, 2008 10:38 AM

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