California's Train to Oblivion

I recently listened to a (perhaps disingenuous) pitch from my Congressperson, Nancy Pelosi,  to the effect that budgets are important in that they reflect moral choices of society. I then listened to a group of California Democrats (and even a few Republicans) praising California’s high speed rail project which will cost somewhere between $70 and 100 billion dollars in capital over the next two decades. How to reconcile the two?

A bit of background:

–  In 2008 the state’s voters approved a $10 billion bond measure to start a $40 billion project to build high speed rail (200+ mph) between Los Angeles and San Francisco by way of the Central Valley. By 2012 the cost had escalated to $100 billion; the federal Stimulus Plan had kicked in $ 3.3 billion; Governor Brown had been elected; and the project was downsized to a $70 billion connection between upgraded commuter rail systems in Los Angeles and the Bay Area. The long term vision remained the same, but it would be built in stages – the first being a non-electrified stretch roughly between Bakersfield and Fresno; a few billion would be spent upgrading the bookend commuter systems.

–  At this point there are a few weak spots in the plan:

—  Passengers will have to change trains to make the full trip – but just until 2028;

—  The claim is that ridership fares ($ 81) will cover the operating costs, but similar systems in Japan and Europe require subsidies at twice the fare rates and higher ridership;

—  California has agreed to take $ 3.5 in Stimulus funding turned down by other states, and $10 billion in voter-approved state bond funding. The remaining $55 billion is to come from an unidentified mix of federal and state funds, diversion of funds to be taken from utilities and industry in the voter-approved “cap and trade“system to go into effect by 2020, and private investments.  The presumption is that once started, the federal and state authorities will be unable to turn it off. (Implicitly, the Democrats will regain control of the US House and hold the presidency.)

–   And the trade-offs that California’s political class is making:

—  The current state budget has reduced the k-12 school year from 180 to 175 days; next year it could be reduced to 160.

—  Tuition in the state university system has doubled in the past five years. Next year state grants for high achieving, low income students will be reduced by 18%.

—  The prison system is being realigned by pushing thousands from state facilities to county jails (without commensurate funding).  Funding for the court system is down 24% in the past four years and will be cut another $544 million in the next budget.

—  The governor is proposing increasing the state sales tax to 7.5 % – the highest in the nation – and the top income tax rate to 13.3 %. Gas taxes are already the highest in the nation. California ranks 50th in business climate according to Chief Executive Magazine.

—  And the social safety net is being shredded – MediCal; job training; children services; everything.

So, why the train? And what lessons can be drawn by folks in other states?

1. Trains are cool. My grand-kids love Thomas. If they can run on electricity derived from solar and wind power they are uber ecological.

2. Politics are messy. “Free” seed money leads to addiction. Local politicians can be bought by a few construction contracts and the promise of a local station. Construction industry companies and unions are powerful everywhere. In a one party state, nobody crosses the machine.

3. Californians still dream of the era when they were national leaders. Prior generations – including the current governor’s father – built roads, water systems, and airports. Current leaders want a legacy.

While others wait for June answers to the Supreme Court Obamacare decision, the Wisconsin recall outcome, and the euro Greek eviction notice, out here on the Left Coast we wait to see if the Democratic state senate and the Democratic state assembly are willing to cross the Democratic governor and go with the non-partisan Legislative Analyst’s Office and effectively pull the plug.



This week’s video (provided by a vigilant reader) has two parts, a trailer for “2016″, a political movie to be released this summer, and a speech at the Conservative Political Action Conference by writer Dinesh D’souza which explains President Obama’s inner compass as pursuit of his father’s anti-colonialism.