Useful Idiots Approve High-Speed Rail to a Taxpayer Black Hole (Updated)

Russ Steele

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.

Why do we need another vote on high speed rail?

  Because we’re not getting what we voted for.


About Russ Steele
Freelance writer and climate change blogger. Russ spent twenty years in the Air Force as a navigator specializing in electronics warfare and digital systems. After his service he was employed for sixteen years as concept developer for TRW, an aerospace and automotive company, and then was CEO of a non-profit Internet provider for 18 months. Russ's articles have appeared in Comstock's Business, Capitol Journal, Trailer Life, Monitoring Times, and Idaho Magazine.

9 Responses to Useful Idiots Approve High-Speed Rail to a Taxpayer Black Hole (Updated)

  1. gjrebane says:

    Am making book that the total cost of the LA to Bay Area route will be over $300B. The project will be abandoned mid-way unless we can get the good folks in Ohio to pay for it. I think that Moonbeam and Sacramento Democrats think that the folks back there are nowhere near as brilliant as they are.

    • Russ says:

      What do your do with an abandoned high speed rail project, turn it into a monument to stupidity? My guess is that the legal challenges will delay the project and the feds will reclaim their money.

    • Dena says:

      Look at the bright side. This will just move the day that California can no longer move money around sooner. To be honest, I expected California to fail sooner but I didn’t figure Wall Street would be so dumb to buy all the bonds California has already issued. They are going to be real disappointed when California files bankruptcy and it could lead to another Wall Street meltdown.
      By the way, I voted against it before I left California so I did all I could to stop it.
      As for what to do with the track. I suspect it would make a really good freight track and they could tag a few passenger cars behind it to keep the status of being a passenger line.

  2. Dixon Cruickshank says:

    “The Legislature took bold action today that gets Californians back to work and puts California out in front once again,” Brown said in a statement.

    As a politician being out in front of a parade can mean a couple of things – he will be gone before the chit happens anyway.

    I will agree with George it will get somewhere to nowhere and stop and just sit in the desert

    Something about California and the lure of a Federal handout – they just can’t resist trying to get something for nothing?

  3. Sean says:

    It’s always fun to watch what happens in California. The senate decided to move forward on high speed rail so now the legal machininations start turning. With almost anyone able to get standing to file a case, this will be a three ring circus.
    When this passed, it reminded me of another great moment in California infrastructure. A new high school was completed nearl Hollywood a couple of years ago for those wanting to focus on the peforming arts. It cost $550 million dollars when it was done. Two years later, the LA Unified school district was putting plans on its next budget year where they were going to spend less than $5K per student and a third of that money was coming in the form of a state IOU.
    So if I were a betting man, this is what I expect to see going forward: 1 Litigation that ties up the project long enough to lose Federal funding. 2 Rejection of all the tax hikes on the November ballot because voter feel the legislature are spend thrifts. 3. A legislature in a real pickel as the bills pour in, revenue stalls, and a new government in Washington DC that is not terribly sympathetic to the predicament California has gotten itself into.

  4. Sean,

    I think you are spot on. As the climate cools it will be harder and harder to convince citizens they need to pay a premium for energy, food and the necessities of life, which could dry up the AB-32 Cap and Tax slush fund the Governor thinks he can co-opt to pay for his bullet train.

  5. Dixon Cruickshank says:

    Russ you are exactly correct – classic counting of chickens before they hatch – they are already counting on X amount of dollars that frankly I think will blow up at some point.

  6. Sean says:

    LA Times has an interesting article on how running the high speed rail line along the I-5 corridor would have solved a lot of problems with rights of way and made a much more direct path between the two main terminal metro areas, LA and San Francisco. But politics brought the path through the big cities in the central valley, making the path quite a bit longer, the whole project more expensive and killed any interest in running the line from parties that run these rail lines currently. I don’t know if the LA times supports or opposes high speed rail in general but it certainly seems that it does not support the plan in place now.,0,4539140.story

  7. From the CalWatchDog: . . . farmers in the Central Valley have a legal bullet aimed at the bullet train: a lawsuit that is threatening to delay, and perhaps derail, the project before it breaks ground next year.

    The lawsuit was filed in Sacramento Superior Court last month by the Madera and Merced farm bureaus along with Merced County, Chowchilla Water District, the agricultural organization Preserve Our Heritage and the Fagundes Dairy. It seeks to shut down the rail project’s 65-mile segment from Merced to Fresno and reverse the California High-Speed Rail Authority’s approval in May of that segment’s environmental impact report.

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