Useful Idiots Approve High-Speed Rail to a Taxpayer Black Hole (Updated)
07/06/2012 9 Comments
The Assembly and State Senate approved the spending of $8 billions leg of the high-speed rail. There is little that can stop breaking ground on this economic disaster next year, other than a few lawsuits by the framers in the path of this boondoggle and a voter initiative. Farmers and landowners in four different parts of the valley have filed lawsuits, but the fiercest opposition is in Kings County. Kings County are plaintiffs in a suit challenging plans to start high-speed rail in the valley on the grounds that those plans violate the high-speed rail bond measure. In June a Judge ruled that the suit was premature, but will allow it’s return if the High-Speed Rail Authority proceeds as planed. It appears to be back on track, allowing the law suite to move forward. Stay Tuned!
In addition, there is an initiative circulating that will put the future of this expensive boondoggle on the November ballot. In May the Secretary of State’s office authorized backers of that initiative, which would bar the collection and spending of high-speed rail bond money, effectively shut down the project, to begin collecting signatures to put it on the ballot. Doug La Malfa was handing out signature collection petitions at the Republican Ladies Federated 60th birthday party, and Ellen and I have added our signatures to growing list of taxpayers that want to stop the project. It was misrepresented in the initial initiative.
The risk is even higher as the state still needs $56 billion to extend the tracks to Southern California and the Bay Area over the next 15 years. They are hoping the federal government and private sector will fund the bulk of this $56 billion. Nearly $20 billion more is needed before the first leg of service can begin between roughly Merced and greater Los Angeles.
And, these are the low-ball figures. No government project of this size has ever come in on budget, there are always unexpected and unanticipated problems that will drive up the cost. Cost that will have to be borne by California tax payers.
That said the real cost of the project is not the cost to build it, but the cost to maintain it over the life of the project. There are know as life cycle costs. In FY 2006, Amtrak Acela Express earned approximately $2.05 billion in revenue and incurred approximately $3.07 billion in expenses, covering 67% of its operating costs. No country in the world operates a passenger rail system without some form of public support for capital costs and/or operating expenses. When you read the high-speed rail business plan you discover that the authors used artificially low costs and artificially high benefits. Transportation accounts do not believe the agency’s math; and no transportation expert thinks this project could hope to break even, never mind turn a profit. Given this assessed risk, serious investors will never touch this project, except duped taxpayers.
Therefore, California taxpayers will be asked to pay for the gap between revenue and operating costs. If Governor Brown has his way he will tap the AB-32 Cap and Tax slush fund to fill the gap. Who will be filling the AB-32 slush fund or a regular basis? You the tax payer in the higher cost of energy in your homes and business and in the increased cost of every product that it take energy to produce or deliver to a store near you.
If the initiative does not get on the ballot and voters approve, the high-speed rail is destined to become a black hole for tax payer dollars.
Update (07-08012, 17:45) Put High-Speed Rail Back on the Ballot.