Wednesday, September 28, 2011

Just how does the "other half" live with High-Speed Rail?

It's not often that you can read articles from tomorrow's newspaper.  Here's one from The Telegraph.  It's from the UK, but boy does it resonate here with us.

Who is high-speed rail for?  Certainly not blue-collar working stiffs.  It's for professionals, executives and the affluent.

High-Speed Rail has been promoting itself as an ideal way to travel, with Wi-Fi on board so that no one will feel that their productivity is in any way constrained.

A research project finds that those hard-working executives aren't.  Hard working that is, when they ride the trains.  (I've noticed on airplanes, while everyone has their computer open, most people aren't working either.)

But, do we really care?  Isn't it enough to know that zillions of our tax dollars are going to be spent building luxury trains for that upper slice of the population? And, even with huge ticket costs, in the case of these business men (and women?) expensed on from the travel budget, the trains require government subsidies.  

We posted a blog entry today identifying the subsidy amounts on Amtrak's many train routes. Whether they're working or not, only the well-to-do can afford to ride on this expensive train. Why should I have my tax dollars build this train rather than support better education for my kids and their kids, so that rich people can ride?  That's just not right!

What amazes me is that Democrats aren't even paying any attention to the social/economic inequities of this train they are so eager to build to save America from disaster.

Thursday 29 September 2011
 Road and rail transport
Business executives enjoy less strain on train
By David Millward, Transport Editor
Rather than use their time on board to catch up on work, most businessmen and women while away the hours staring at other passengers and gazing out of the window at the countryside.

The reality of how they spend their time on board trains was contained in evidence submitted by the Department for Transport to a parliamentary inquiry into plans for a high speed rail network.

Oxera, a firm of consultants called in by the DfT, found that as little as 10 per cent of journey time could be productive.

“In fact, more business travellers spent most of their travel time reading for leisure, gazing out of the window or “people-watching” than spent it working,” the study found.

The findings will disappoint train operators who have spent huge amounts trying to make rail travel more attractive for businessmen by installing Wi-Fi and improving mobile phone reception in recent years.

According to the Oxera study this has had little or no impact on the behaviour of business passengers who often pay huge amounts to travel by rail.

But even now connectivity is patchy and even Philip Hammond, the Transport Secretary, is understood to be frustrated by the problems he faces making calls or dealing with emails while travelling by train.

Another study, by the University of the West of England, came to similar conclusions.

It found that 46 per cent of business passengers stared at the countryside or at others on board the train, while 43 per cent just read for leisure.

Just over half did spend some time working, but then more than one in 10 admitted they were either bored or spent part of the trip snoozing.

A first class ticket from London to Manchester can cost as much as £199.50 for a journey lasting just over two hours.

Estimates of how much a business executive’s time vary. According to Mark Cameron, a City headhunter, a figure of £80 to £150 an hour is not unreasonable.

The findings were seized upon by Simon Buck, chief executive of the British Air Transport Association.

“Maybe they are just dreaming about how much of their income tax goes toward the £5 billion public subsidy rail receives from the Government every year.”

But a spokesman for the Association of Train Operating Companies defended the value of travelling by rail.

“Travelling by train offers business passengers the choice to wind down with a glass of wine and take in the scenery, or make the most of Wi-Fi access to get some work done – not things that you can always do on a plane.

"The city central locations of most train stations also makes getting to and from appointments quicker and more convenient, rather than wasting valuable time in lengthy airport queues.

“The fact is that more and more businesses are choosing to send their staff by train – so they must be confident that their time is being used productively.”

What's So Fair about Fair Market Value When High-Speed Rail Is Concerned?

Here's another one of those articles that raises critical issues that can make the steam come out of your ears.

This is about FMV.  That means Fair Market Value of your property, be it residence, industrial, business, farm or whatever.  If the rail authority decided it needs your property, either for actually part of the rail corridor, or even for temporary construction easements, they will deploy their powers of eminent domain.  In other words, they will take your property and give you FMV.

This article discusses the problems with that, since FMV is a highly ambiguous and subjective number based on lots of direct and indirect variables.

It is now generally understood that any property within earshot of the rail corridor has already diminished in value.  The law requires full disclosure of the "likelihood" of rail corridors in proximity to your property.  And that's after discounting the general housing market decline and its impact on your particular locality and "comps."  That is to say, financial damage has already been done.

Now it's a matter of finding out just how much.  No one knows when this will happen.  Presumably it will happen in the Central Valley first since that's where construction will begin.

One might conjecture that if you are unlucky enough to be selected, you will sue and take the matter to court if necessary.

One reason is that the eminent domain process itself, long before it goes into actual effect, already has had a deleterious impact on your FMV. Therefore, by the time the rail authority makes you their FMV offer, they have already induced reduced value of your property.

That's a lawsuit waiting to happen.  If you sue, be sure to include the costs of the lawsuit itself.

California High Speed-Rail and Real Estate Limbo
How HSR Can Negatively Impact Homeowners and Businesses, Even If the Project Never Gets Off the Ground

By Frank Maccioli | Yahoo! Contributor Network – Tue, Sep 27, 2011

COMMENTARY | Across the country, several high-speed rail projects are in the works. They seem to be controversy magnets, with vociferous support and opposition. (See: Has Politics Killed HSR ...?)

The California High-Speed Rail Authority (CaHSRA) recently held workshops and hearings on the Draft EIR/EIS for the Fresno-to-Bakersfield segment of California's 800 mile HSR project. Referred to as the "backbone" of the system, initial construction is planned for 2012 if all goes well in the permitting process.

Those impacted by the projects have been assured that they will be offered Fair Market Value (FMV) for their property. The CaHSRA has distributed brochures describing the process if private property is needed. However, the information is short on details and doesn't get to the heart of what FMV is or how it's determined. (Ref: CaHSRA Draft EIR/EIS Public Hearing, 9/22/11)

Based upon public testimony at the hearing, one can see that not only are there many unanswered questions, but property owners near the proposed route are also facing a real estate "limbo" until a final decision is made. This limbo world affects owners whose property will be taken and just as importantly, those whose property won't be taken.

Is FMV based on the value the property has when an official route is selected? Is it based on the value when the first shovel of dirt is moved? Or is it based on the value the property had before anyone even started whispering that a new train track might be located nearby?

It is that latter question, coupled with the raging controversy between HSR supporters and opponents that has put property owners in an undesirable position. Because no route has yet been selected, no one has been officially notified that property will be taken. Consequently, many homeowners have no idea what their FMV will be. Furthermore, if they wanted to sell right now, many may find that there are few buyers. Who wants to buy a house now when the state may notify the new buyer in a year or two that their house will be taken from them?

And what of those who will receive no FMV offers but are left with noise and visual impacts? The CaHSRA has referred such owners to a California website for more information. However, such claims must be made within 1 year of their occurrence. Which brings us back to the question - when did the clock start? Will it be when the route is picked? Will it be when the track is built? Or was it when their property values dropped after rumors first started circulating about a possible HSR in the neighborhood? If the latter, then the time for filing a claim has already expired.

Say what you will about the positives and negatives about HSR - the prospect of jobs, environmental impacts, the enormous costs - this real estate limbo represents a major problem for those affected. How it is resolved will affect the success or failure of the entire project.

If you like the way Amtrak is operating, you're going to love High-Speed Rail.

An article by Warren Beatty.  That Warren Beatty?  I don't know, but why not?  He's entitled to his public opinions like everyone else.  Actually, it's an excellent article and makes a critical point.  Want to see what HSR will look like if it ever gets operational?  See Amtrak right now.  It's a loser and will continue to be a loser.  Why would high-speed rail be any different.  If anything, it could very well be much worse, requiring far larger subsidies.

There's a lot of loose talk by the Republicans about pushing for public/private partnerships.  And some Democrats are also promoting this concept.  It will, in practical terms, be the worst of both.  It will be a badly run government program, the way Amtrak is now, and the private investments will require taxpayer dollars for ROI.  Or, it will be like all other government loans with permanent interest deficits well beyond any horizon. 

Wouldn't you think that if anybody is going to build anything railroad related, they would start on those corridors with the highest demand?  Shouldn't transit be "market driven?"  But, that's not the way the politically based government thinks or works.  And we all pay the price for that mismanagement.

Is AMTRAK A Model Of How High Speed Rail Will Be Managed? 
[Reader Post]
By: Warren Beatty

President Barack Obama wants to “stimulate” the economy through infrastructure spending. High on his list is “high speed rail.” (HSR) He has even compared this country to China regarding lack of high speed rail. So, with Obama’s desire in mind, I thought a look at AMTRAK and the subsidies it receives might be in order. It can be argued that AMTRAK was not designed to be high speed rail, and that is true. However, I think that it can serve as a good model of how the government will manage high speed rail.

HSR and Stimulus Spending

Obama’s first “stimulus” (the 2009 one) called for $13 billion on HSR projects. Infrastructure spending decisions are best made at the lowest, most local level possible. When they are made at the federal level, politics, not cost-benefit analysis, dictates what gets funded. When the governors of Florida, Ohio, and Wisconsin determined that their states’ HSR projects were not worth state taxpayer dollars, Obama rejected the governors’ pleas to let them keep the federal funding for other infrastructure spending. 

Instead, Obama reaffirmed his faith in HSR and sent all [actually, a lot of it, but not all of it] the money to California. After California experienced massive cost overruns, Obama proposed his second “stimulus” (the American Jobs Act), which has in it an “Infrastructure Bank” and calls for $53 billion to be spent on HSR. Considering Obama’s obsession with HSR, how much of the infrastructure bank’s “grants, loans, or a blend of both” will be wasted on projects like California’s HSR project? How much of that money will taxpayers ever see again?

AMTRAK “Management”

First, a few observations about AMTRAK. The National Railroad Passenger Corporation, or AMTRAK, is the federal organization that operates passenger rail service in the United States. It was created by the Rail Passenger Service Act of 1970. AMTRAK has been providing very poor service for over forty years, while receiving almost $40 billion in federal subsidies. The system has never earned a profit, and 41 of its 44 routes lose money, with the average of $32 lost per passenger. AMTRAK accounts for 0.1 percent of America’s passenger travel. AMTRAK’s load factor (percentage of seats occupied) is below 50 percent, which compares to a typical 80-percent load factor on airlines.

The Northeast Corridor has the highest passenger volume of any AMTRAK route, carrying nearly 10.9 million people in 2008, and its high-speed Acela Express made a profit of about $41 per passenger. But the more heavily utilized Northeast Regional, with more than twice as many riders as the Acela, lost almost $5 per passenger. The Sunset Limited, which runs from New Orleans to Los Angeles, lost $462 per passenger. AMTRAK operates 44 routes on over 22,000 miles of track in 46 states, the District of Columbia, and three Canadian provinces. AMTRAK owns the trains, but 97 percent of the track is owned by freight rail companies, who had to buy the right-of-ways and who maintains the tracks. How much more in subsidies would AMTRAK need if it had to buy its own right-of-ways and maintain its own tracks?

AMTRAK management deals with is an expensive work-force, with about 19,000 employees, about 86 percent of whom are covered by collective bargaining. Compensation represents almost half of AMTRAK’s total operating costs. The average AMTRAK employee earns more than $91,000 a year in wages and benefits.

Transportation Subsidies

Defenders of AMTRAK argue that most of the nation’s transportation industry is subsidized. AMTRAK’s subsidy is by far the most generous. AMTRAK subsidies totaled $237.53 per 1,000 passenger-miles, while commercial aviation’s was $4.23. These subsidies fail to make train travel more affordable. Randal O’Toole of the Cato Institute observes a one-way ticket between Washington, D.C., and New York City on AMTRAK’s high-speed Acela costs $139, while bus service costs less than $15.

Specific AMTRAK Subsidies

The discussion above outlines the subsidies AMTRAK receives or has received. Now let’s turn our attention to the specific subsidies received by AMTRAK, such as retaining many unprofitable routes.

The average subsidy to a New York-Los Angeles rider exceeds $1,000. The estimated round trip subsidy per passenger for a Denver-Chicago trip is $650. It would be cheaper for taxpayers to shut down routes like these and purchase discount round-trip airfare for all AMTRAK riders.  BTW these dollar amounts are in 1997 dollars.

In 2010, taxpayers spent more than $110 million subsidizing AMTRAK’s Florida trains. The round-trip subsidy to each New York-to-Orlando train passenger is close to $500.

We taxpayers liberally subsidize first-class AMTRAK travel between Chicago and St. Louis.


Is AMTRAK a Failure or a Success?

Nothing succeeds in Washington DC like repeated and costly failure. The federal government doesn’t have a clue about running a railroad. AMTRAK’s monopoly over inter-city passenger rail travel provides little incentive to provide high-quality and efficient service. The threat of potential budget cuts or elimination has been repeatedly undermined by Washington’s willingness to bail AMTRAK out. So I guess that we taxpayers are stuck with forever subsidizing AMTRAK. And if HSR is foisted upon us, we can expect the same “management” of it.

But that’s just my opinion.

How will HSR be built without money? Is that a foolish question?

Article after article surfaces with the same basic argument.  There's no money to build this train.  And, there's not going to be any in the immediate future. Chumley, the author of the article, below, is apparently on the politically Right side of the argument, advocating the 'free market' as the appropriate measure and guide for creating such a train as this. And that's what makes this article so interesting.

If the private sector takes no interest, she says, there must be basic problems.  Well, she's right; there are.  A. it costs too much, B. it will carry too few people, C. it will require permanent subsidies to operate, D. there will be no further federal funds or any of the other anticipated sources.

When Chumley quotes Gabriel Roth, who opposes this HSR project, the point being made is that pitting one modality (HSR) against the others, driving and flying, is "ridiculous."

The rail advocates will, of course, disagree with her premises.  They will tell you that commercial aviation is massively subsidized, as are the highways and therefore automobile use.   Their standard claim is that if funds aren't spent on HSR, they will be required in far larger amounts for the expansion of those other modalities.  

However, transit is not a zero-sum game.  If the state population expands, as is frequently claimed as a justification for HSR development, all transit modalities must be expanded, including rail.  If it doesn't, there certainly is no reason for building the most expensive per mile rail system ever conceived.

By the way, it's already quite clear that transit modalities have different consumer cost points.  Therefore, lower income people select lower cost transit, such as buses, while the affluent select the most expensive modes, such as air travel and high-speed rail.  Needless to say, the latter population is far smaller than the former.  

So, this raises the question of equitability.  If high-speed rail, the most expensive rail travel available, self-selects high income customers, is that the most fair use of tax dollars? One could argue that this is an example of government-imposed income redistribution flowing upward.

Those who do the arithmetic on such matters will tell us that subsidies for HSR, per passenger-mile, are far greater than the other alternative transit modalities. Furthermore, we can't simply abandon the maintenance and upgrading of other transit modes as if HSR were somehow to take all transit riders out of planes and cars.  That is, indeed, "ridiculous."  

Let's just say that all transit modes will have to be, a. repaired after years of neglect, b. maintained, and c. upgraded.  That includes the existing rail system for Amtrak and the few other passenger rail service providers.  And, it certainly includes urban and regional public mass transit in all modalities.

In this article, as in all the others, we need to rid ourselves of that obsolete and incorrect $43 billion cost forecast number. The anticipated new business plan from the rail authority will indicate considerably higher construction costs and predictably, even those will continue to be "low-ball" numbers.

Yet again, the issue comes down to cost/benefits and here, HSR fails miserably.  As the ridership number forecast continues to go down, and the construction cost forecast continues to rise, the cost/benefit equation clearly points to the undesirability of building this project.

California Struggling to Find High-Speed Rail Funds
September 26, 2011

Cheryl K. Chumley writes from Northern Virginia. (read full bio)

California’s plans for high-speed rail, which envision tracks connecting Southern California to the Bay Area with riders traveling at speeds of 220 miles per hour, suffered a setback in mid-September as Congress cut billions of dollars from the Federal Railroad Administration’s budget.

Federal Funding Cut

President Obama, who is pushing high-speed rail projects in select states, sought $8 billion in funding for fiscal 2012. House Appropriations subcommittee members, however, cut nearly $7 billion from that request. The bulk of the remaining $1 billion is already allocated for Amtrak operations.

The cuts did not come as a surprise to political analysts. Republicans have been stating for months they would not support spending for high-speed rail in this economic downturn.

Transportation analyst Gabriel Roth, a research fellow with the Independent Institute and a former civil engineer and transportation, sees the denial of federal funding as a welcome advance in the debate over high-speed rail.

Competing Against Popular Services

“I think high-speed rail in California is a terrible idea,” Roth said. “There are good air services in California that are self-sustaining. I think it’s just ridiculous to provide competition for ongoing services that are already proven to be self-sustaining.”

Government Underestimated Costs

The reluctance of Congress to fund high-speed rail has left California in a financial lurch. The high-speed rail project is estimated to cost upwards of $43 billion for just its first phase. The California High Speed Rail Authority, the group that is actually in charge of building the transit system, has at its disposal $6.3 billion in federal grants and proceeds from an initial bond offering that was approved by referendum in 2008. But the governor must first consent to the bond issue and then allocate funds for the state treasurer to use. 

Making matters worse, project analyses show the projected costs of the system have been substantially underestimated. Some put the price of the first phase at $65 billion, $22 billion more than government officials projected.

Few Travelers Would Benefit

How taxpayers in California might respond to this additional demand for tax dollars is an uncertainty. But to Roth this turn of events is just one more reason why high-speed rail programs typically are bureaucratic boondoggles that should be avoided.

“Both the federal government and the state of California are bankrupt. It’s completely ridiculous to spend money on this sort of thing, which is really built for the benefit of the people who build it. They’re not building it for travelers,” Roth said. “There’s no way a family with children could use this service, for example, because it’s much cheaper to travel by car.”

Roth said the true test of determining whether a planned transportation system is sound or not is rooted in one simple question: Who’s paying?

“If a transportation project is good, it should stand on its own feet,” Roth said. “It’s quite wrong for taxpayers to pay for this at all. If there was any merit to this proposal, the people who proposed the project would put their own money into it.”

Cheryl Chumley ( writes from northern Virginia.

Tuesday, September 27, 2011

Another Editorial Rejecting High-Speed Rail in California

The Press-Enterprise is based in Riverside, California. It's part of the LA Basin region. They don't like this high-speed rail project that's being shoved down our throats. They cite the Grindley financial report as one of their sources, a copy of which has been sent to very many papers around the state.

What they say is pretty much what you've been reading in this blog, but they do say it clearly and to the point. We have to ask, how many more editorials, from how many more newspapers, will it take before the Legislature gets the idea that the public, including those who voted for Proposition 1A, would now vote against it?

On another note, we have been giving thought to the idea that it is insufficient to criticize the expenditure of such a vast amount of funding on high-speed rail, without offering an alternative to this project.  We have been suggesting such alternatives, taking many ideas from many sources, and want to persist in our recommendations to put federal funds into fixing what's broken, rather than building a luxury train we don't actually need.

Secondarily, looking at transit in the US and in California, not as a political issue or opportunity, but at the necessary movement of people, reality will tell us that there are several extremely busy transit routes in our state right now that warrant public mass transit upgrades.  One is the Los Angeles to San Diego route.  The other, to my surprise, is the Sacramento to San Jose route of the Capital Corridor Express. These two are, respectively, the second and third busiest transit routes in the US at this time.

Shouldn't the investment in transit upgrades be made there, rather than building space-shuttle rocket-like trains through the Central Valley, trains that will be barely occupied if they ever actually operate?  

Which brings us to the obvious conclusion that rationality has nothing to do with the California project; it's all about politics and money.

Rail sinkhole  

10:00 PM PDT on Monday, September 26, 2011

The Press-Enterprise

California's high-speed rail plans increasingly look like a runaway train. Rising costs, imaginary financing and dubious projections make the bullet train a bad deal for taxpayers. The Legislature needs to halt this project, to avoid a potentially massive public boondoggle.

A new report from a panel of Bay Area business and financial experts says the rail line's construction costs are ballooning, while the project's financing plan is wishful thinking. And the report, released this month, suggests the train line is unlikely to pay for itself, thus requiring public subsidies to stay in business. And while the experts are associated with a group critical of proposed Bay Area bullet train routes, the report echoes questions raised by others, including the state auditor and legislative analyst.

The California High-Speed Rail Authority proposes a $43 billion system that would whisk passengers between Southern California and the Bay Area at speeds of up to 220 mph. The authority plans to start construction next year on a stretch of track connecting Merced to Bakersfield.

The new report, however, estimates the total cost of the north-south line at $66 billion, well above the rail authority's numbers. The higher figure falls in line with a May estimate by the legislative analyst, who put the total cost of the project at $67 billion.

Those rising costs, however, come tied to a financing plan that looks flatly unrealistic even at $43 billion. The rail authority counts on $17 billion to $19 billion in federal funding, plus another $10 billion to $12 billion in private financing.

But California has only $3.6 billion in federal money now. Nor is the state likely to see much more any time soon, given federal finances and congressional politics. And without substantial federal funding, the state has little hope of attracting private investment.

The new report also criticizes the rail authority's ridership projections as overly optimistic. Many other groups, including UC Berkeley transportation experts, have raised the same question. But without enough passengers, ticket revenue would not be enough to cover the bullet train's operating costs.

So what happens if the federal and private money do not materialize? And what if passenger projections fall short, and the system runs in the red? As the High-Speed Rail Peer Review Group, a voter-created watchdog panel, noted in July, "there is no Plan B" if the financing proves faulty.

The rail authority says the new report contains "fundamental misunderstandings" about the project. And it says a new version of the rail line's business plan, due next month, will address the financial questions. But overcoming rising costs and the absence of billions in federal aid would be an improbable trick.

California's perpetual budget crises should rule out any thought of state taxpayers forking over huge sums of money to complete the line or subsidize its operations. The state has more pressing public priorities. Better to stop this potential disaster now, instead of waiting until it careens off the fiscal rails.

High-Speed Rail "Shovel Ready" Isn't.

Here's yet one more reason to drop the California high-speed rail project.  As a now aggressively touted jobs project, the unemployed will have to hold their breath until at least 'same time next year'; that is, September 2012, when construction is scheduled to begin in the Central Valley.

For some time now, we have said that there are higher priorities than building a new luxury train from scratch; and that's repairing existing infrastructure that has fallen into disrepair.  Estimates of engineering-based consulting companies place the value of such restorations for highways, bridges and the like at well beyond a trillion dollars nationally, and this state's needs are extensive.  I would even add our rail network into this agenda insofar as it serves commuters in the large population centers.

There is a fundamental fallacy in the very concept of "shovel ready."  Without funding in hand and a completed set of engineering designs on the drawing board, including the fulfilled pursuit of all the legal approvals, nothing is "shovel ready." 

Furthermore, beyond the simplest kinds of construction -- and high-speed rail is nothing of the sort -- it should take a very long time, with tons of studies being conducted to validate the efficacy of such a mega-infrastructure project. We already know that there has been no national or state cost-benefit analysis. That's not neglect; that's evasion. 

High-speed rail has no business being "shovel ready" to suit the political purposes of artificial job creation.  Building a high-speed rail system is nothing like the Civilian Conservation Corps of the Great Depression Era of the '30s. The Obama Administration has no business equating them. 

Given the amounts of funding that are intended, even though not in hand, the transit purposes for building a railroad, not creating jobs, ought to have primacy in the priority rankings.  Think about it: building a railroad as the means to obtain the ends of creating government, temporary, construction jobs.  That's totally upside down. Just digging holes and filling them back up might serve the jobs agenda better than this disastrous train. 

Let hypothesize and say that one day, the train project will have been completed at twice what the cost projections are now, and that all those construction workers have been laid off, the work being completed.  All the money has been spent and we are stuck with a train that only the affluent can afford to ride; it runs nearly empty and only very few trains run each day.  Furthermore, it costs the state of California billions each year to keep it operating and making interest payments on the debt. And, finally, it solves none of the problems that were promised.

Will that have been a good decision? I don't think so.  Unfortunately, many of us know all this now.  We don't have to wait for the train's completion to demonstrate what a mistake this is.  But, who is listening?

'Shovel ready' jobs could take time
By: Kendra Marr
September 26, 2011 11:03 PM EDT

Here we go again.

President Barack Obama hasn’t yet used the term “shovel ready” in his latest jobs pitch, but he faces a familiar problem: Infrastructure experts doubt that billions in emergency spending will be the quick jobs fix the president is promising.

“Unfortunately, there aren’t many jobs ready to go at the snap of a finger,” said William Ibbs, a professor of civil engineering at the University of California at Berkeley, who also consults on major construction projects.
Obama’s plan calls for $50 billion in immediate investments for improved highways, transit systems, railways and aviation — an idea he proposed a year ago that failed to gain traction. The goal is to put Americans back to work, upgrading 150,000 miles of road, 4,000 miles of train tracks, 150 miles of airport runways and the nation’s air traffic control system.

“There are out-of-work construction workers around the country who are ready to go to work on these projects, and we have the opportunity here — Congress does, if it passes the American Jobs Act — to put those Americans to work,” White House press secretary Jay Carney recently told reporters.

With the jobless rate hovering at 9 percent and an uneasy economic recovery, jobs are needed now — not in a few years.

But experts are skeptical that projects would come fast enough. A tremendous amount of money and time is needed to get a project through a detailed design process, permitting, environmental hurdles, public hearings and land acquisition.

“As a rule of thumb, you’re looking at three years for a project, really going from the time the federal government says we have the money and want to spend it,” Ibbs said. But that’s for the easiest, simplest projects, such as building a road through an uninhabited piece of land. “The politicians really don’t understand how cumbersome the process is these days,” Ibbs said. “Environmental permitting, especially on road projects can take years. You’re hiring attorneys, not really shoveling a lot of dirt.”

The reality is the quickest projects to jump-start are simply resurfacing existing roads with asphalt — not the best way of reining in the national infrastructure crisis — and the massive infrastructure improvements that promise generations of benefits can easily double and triple that time frame.

“Do we have many Hoover Dams that are shovel ready? I think not,” said Richard G. Little, director of the Keston Institute for Public Finance and Infrastructure Policy at the University of Southern California. “It’s not a trivial activity to get to the point where you actually get to construct.”

On top of the time lag, state transportation departments don’t have many jobs just waiting on the shelf, said Andrew Herrmann, the American Society of Civil Engineers’ incoming president. Budget crunches have severely limited their long-term planning and Congress’s inaction on a new highway bill has caused even more headaches.

“Over the last couple of years, they haven’t had an opportunity to get ahead of the curve to get some of those projects ready,” Herrmann said. “It’s very hard to plan when the federal highway bill is on extensions.”

The concern is that projects meeting the requirements for the immediate investments would be those that have been shelved after being designed and engineered, yet have since become outdated or limited in scope.

Another worry is this patchwork approach, which has been in play for decades, won’t move the nation closer to a comprehensive plan to coordinate both short-term and long-term projects, experts said. 

Part of the reason Obama’s previous push for a $50 billion infrastructure program failed was that there was little evidence the program would promptly create jobs. 

The term “shovel ready” has become an inadvertent badge of government bureaucracy. Even the president has turned it on himself, joking, “Shovel-ready was not as, uh, shovel-ready as we expected.” 

An Associated Press report, analyzing the economy 10 months into Obama’s first economic stimulus plan, found that “a surge in spending on roads and bridges has had no effect on local unemployment and barely helped the beleaguered construction industry.” 

But advocates point out that the roughly $48 billion in the Recovery Act set aside for transportation projects repaired more than 40,000 miles of roads and 1,300 bridges. And stimulus package funding helped keep 325,000 workers employed in the second quarter of 2011, according to 

And a number of bulldozers and cranes are rumbling across the country. For instance, after years of delays because of funding shortages, Wisconsin is expanding I-94 with a $43 million Recovery Act award from the Transportation Department. An additional $20 million award is funding the replacement of an 81-year-old bridge over the Ohio River. In New Mexico, a $31 million grant is being used for making a rural road, connecting the Navajo Nation to vital services, safer. 

“The president’s plan is a welcome start,” Herrmann said. “We need to start working on infrastructure as fast as possible, but we have to look at long term too.” 

Regardless, the nation’s infrastructure needs financial help. 

U.S. infrastructure was once among the best in the world but has slipped to 23rd place in the World Economic Forum’s ranking. The ASCE gave the country a “D” on its recent infrastructure report card and estimated it would require an investment of $2.2 trillion over five years to get it back into shape. 

And a panel of 80 experts — chaired by former Transportation Secretaries Norm Mineta and Samuel Skinner — found that the federal government needs to be spending between $134 billion and $262 billion a year through 2035 to maintain and improve the roads, rail system and air transportation. 

Obama ran into this dilemma last week when he visited the outdated Brent Spence Bridge, which links Ohio and Kentucky, the home states of House Speaker John Boehner and Senate Minority Leader Mitch McConnell. Republicans quickly latched on to a Cincinnati Enquirer report that even if Congress passes Obama’s American Jobs Plan, it’s unclear if the money would ever reach the bridge. Since the bridge is still in the preliminary engineering and environmental clear phase, in the best-case scenario, workers wouldn’t be hired until 2013 or 2015. 

A few days later, GOP presidential long shot Gary Johnson quipped, “My next-door neighbor’s two dogs have created more shovel-ready jobs than this current administration.” 

The one-liner echoed a zinger by conservative radio personality Rush Limbaugh. And in this infrastructure debate, it probably won’t be the last time this shovel-ready joke will be reused.

An Environmentalist's Look At California's High-Speed Rail Situation

This web-site, source of the article below, identifies itself as environmentally friendly.  By all rights, it ought to fully oppose high-speed rail, which is very environmentally un-friendly. 

We've identified many reasons for understanding the California HSR project as far "dirtier" than the rail promoters indicate.  Not the least of these is the ten years of construction which includes not only thousands of huge Diesel engine operations for all the construction equipment, but the manufacture of everything needed to develop this rail line. 

Rail supporters want to minimize or overlook issues like construction emissions, pollution and contamination.  They disregard the manufacturing and shipping processes all of which are enormously energy-intensive and put out tons of greenhouse gasses.

Andrew Meggison concludes his article with the inference that he continues to seek a "large and functional" high-speed rail system in the US.  However, he is not sparing in his criticsm of the California project and how it is being administered.  And that's certainly a step in the right direction.

The article pretty much speaks for itself.  Andrew gives credence to the opinions of those who object to the train project, including NIMBYs. He appreciates the destructive consequences of the train route "through the middle of one of the nation's most populous areas."  And he cites a litany of problems attributable to the mismanagement of this California project.  He calls the project "a real mess."

While we agree on all the challenges generated by the rail authority, we stop short of wishing for a "good high-speed rail project" believing that it's economically not possible.  And that, in California, is both undesirable and not necessary. That this project is a "real mess" is merely the straw that should break the back of high-speed rail in our state. 


Obama, High Speed Rail, and the State Of California
By Andrew Meggison

High speed rail is big business in other countries like China. America has been trying to get a high speed rail program in action for years with California being at the forefront of the planning. Now, it seems that lawsuits might be shutting down the California project for good, or at least delay the project until the funding evaporates.

The Senate Appropriations Committee, a Democrat controlled committee, amended spending legislation to direct $100 million to President Barack Obama’s high speed rail program next year. Oddly, the same appropriations committee recently approved a bill that did not include money for President’s Obama’s initiative. The amended legislation reallocates $100 million that had been earmarked for highway and other transit projects.

Of the $10.1 billion (yes BILLION) that Congress has directed to President Barack Obama’s high speed rail program since 2009, $7.59 billion has been distributed. The state of California is counting on the federal funding as the state attempts to build a $43 billion rail system to run trains up to 220 miles per hour between the cities of San Francisco and Los Angeles.

The funding is indeed currently available but the California high speed rail project still has been filled with problems. To say that it was easy to untangle all of the issues and negative implementations that have plagued the California high speed rail project would be in jest. To start, the California high speed rail project is going to cut through the middle of the one of the nation’s most populous areas. This means not everyone is going to want a train track in their backyards and these folks have voiced their opinions.

Opinions do matter; especially when publicly elected officials want to keep their jobs come the new election cycle. This leads to political pandering and legislative hang ups in the realm of local and state politics. Add to this engineering issues, environmental concerns, poor ridership estimates, racial issues, and the desire to use existing Caltrain cars and lines and one is left with a real mess that has halted the California high speed rail project.

Now there are lawsuits. Starting in the Bay Area, local Bay Area cities and a number of nonprofits are suing over the issues of the train route and also over a number of negative environmental studies. Moving to Southern California, the City of Palmdale has gone to court over concerns that rail officials will abandon a planned Antelope Valley line through the city and reroute the tracks up Interstate 5 instead. Off to the Central Valley, Kings County officials and residents are doing everything in their power to stop a 100 mile stretch of track from ruining thousands of acres of farmland located between Fresno and Bakersfield.

All the while the clock is slowly ticking – a federal stipulation on the almost $3.5 billion in stimulus cash that was given given for the project says that construction must begin in the valley. If rail officials cannot get this battle with Kings County sorted and the money distributed by September 2017, the government could divert the billions in funds to other projects.

If California is supposed to be leading the way for high speed rail in America the state certainly could be doing a better job. The idea of having a high speed rail line in California is great, but it is also expensive and given the economic hardship in the U.S. wasteful spending or money allocated to projects that are not moving is not smiled upon; especially when that money had been previously earmarked for existing highway projects.

Additionally, the world famous China high speed rail systems (the supposed model of high speed rail) has had its share of recent technical problems surrounding safety, ticket price gouging, and corruption—leaving a black eye on the face of the entire high speed rail industry.

Overall, it seems that if California does not get its act together, and quickly, the idea of having a large and functional high speed rail system in America may never come to fruition.


Andrew Meggison was born in the state of Maine and educated in Massachusetts. Andrew earned a Bachelor’s Degree in Government and International Relations from Clark University and a Master’s Degree in Political Science from Northeastern University. Being an Eagle Scout, Andrew has a passion for all things environmental. In his free time Andrew enjoys writing, exploring the great outdoors, a good film, and a creative cocktail.

For High-Speed Rail, The Future Lies Ahead (thanks, Mort Sahl)

High-Speed Rail in California -- Some thoughts on what to watch for:

Congress. The Senate has their version of the transportation budget extension for FY2012, with a last minute amendment for $100 million, stuffed in by Senator Feinstein, among others. It should be noted that, given the costs of developing HSR anywhere in the US, and especially in California, $100 million is a drop in the bucket.  Many tens of billions of dollars will be required to get California's train project off the drawing board, on the ground and operational.

There are many differences in the basic transportation budget re-authorization, and it seems like it will be a long, drawn-out struggle. However, this budget extension had to be passed before September 30 in order to prevent government shut-down. Even if this extension passes soon, which is quite likely, it is unlikely that the re-authorization will be accomplished before next year's elections.  With the House in recess, the Senate measure to extend government funding through Nov. 18th has to wait for the House to consider.  The Senate voted to wait until October 4.

Meanwhile, although the high-speed rail funding future in Washington seems more unlikely than ever, the Administration is proceeding as if nothing stood in the way of the flow of tens of billions of dollars to build high-speed Amtrak corridors around the US, as well as the very fast California corridor. One of the things to watch for is when reality will set in for Obama and Ray LaHood who are now selling the program as a jobs project.  So far, not so much. 

Sacramento.  Our governor, Jerry Brown, has indicated that he wants to wait for the new HSR business plan to be made public before he makes any decisions regarding high-speed rail.  Whatever.  We can be fairly confident that Brown, who was in on the ground floor of high-speed rail planning during his prior years as governor, won't back away from it now.

Brown has made it forcefully clear to the Democrats in the State Legislature that he intends to hold fast and it appears that his pro-HSR agenda is driven by the opportunity of $3.5 billion from the Department of Transportation.  It's been "awarded" already (Define 'awarded.') and now waits to be actually sent to California upon meeting certain deadlines, the first being September 2012 when construction must begin.

There's also the matter of several billion from the general obligation bonds from Proposition 1A that will be added to the $3.5 as a partial required match.  That means, the CHSRA will have over $6 billion to spend in the Central Valley.  While miracles do happen (such as a successful lawsuit with a court-ordered injunction/stop-order), I don't expect one in this instance.  Regardless of how many laws will be violated, I believe that the rail authority will begin construction on time.  And that's how the Governor wants it. 

Future funding is an entirely different matter.  It's become clear that any of the numbers provided by the rail authority indicating the actual costs of this project have been, and will continue to be, low-ball underestimates.  The most recent arithmetic has come up with more than $65 billion.  There is lots of conjecture that it will go well beyond $100 billion. Let's see if the rail authority acknowledges the costs increases of which everyone is already aware, in their next business plan.

Then, the question becomes, where will those dollars come from?  Sacramento? A state with borderline default issues? Or the federal government with a Congress that is more polarized than it has ever been in memory? Isn't that a critical problem that can't be ignored?  Will high-speed rail be yet another "unfunded mandate" of which the government is so fond?

All the recent buzz about Infrastructure Banks and Public/Private Partnerships complexifies the basic truth that HSR is a lousy investment for the the financial industry.  HSR is unprofitable anywhere.  It barely breaks even in two or three rail corridors on earth. What kind of an investment is that?  

In California, watch for the release of the October Business Plan.  First, watch to see if the rail authority brings it in on time.  Procrastination has become standard operating procedure.  Is there a connection between the rail authority postponing its October meeting into November and the possible lack of a business plan in hand?

As the swelling cost projections becomes ever better publicized, we should begin to see that these enormous, un-affordable numbers will have some impact on decision-making at the state and national levels. 

My point here is that at some moment in time, the disparity between the public fantasy rhetoric about the train and the promised blessings it will bestow upon California and the realities of its costs will be stretched to the breaking point.  

The promises of the train, its benefits to society and its panacea-like qualities will finally be appreciated for their science-fiction un-attainability.

Meanwhile, the ceiling-less cost growth and the diminishing likelihood of obtaining such financial support should shock a large enough portion of the population to demand a termination of this endeavor before it is too late and too much damage has been wreaked on California.

So, bottom line.  What to watch for if there is no more funding:

The rail authority intends to build a 100 mile, more or less, rail corridor, with tracks but no other technologies for high-speed rail, such as electrification, signalling, PTC, etc.  They claim that Amtrak can always use it. When the funding runs out, so does the project in the Central Valley.  They will continue to keep their offices open in Sacramento, and they will keep their lobbyists fully occupied in Washington for further funding.  

Meanwhile, there will be a lot of small-potatoes finagling in both the Bay Area and in the LA Basin to obtain land/corridor rights to run a future HSR.  In the Bay Area, area politicians are determined to bring HSR on the Caltrain corridor and have devised various devious ways (see: "blended solution" and "phased implementation") of achieving that end.  They are also seeking federal funding for electrification of the corridor in order to use that as a stalking horse for bringing HSR to the corridor in the future.  All that demands a separate detailed discussion.

If there is further funding, the rail authority will doubtlessly seek to complete as much of the entire route as funds allow, even if it means using the funds only as the means for first acquiring/'marking' the rail corridor route, buying rights of way, etc.  As we have said many times, the rail authority intentions are to get and spend funds.  They will build what they can, cover as much territory as they can, and continue to seek funds as a permanent bureaucracy dedicated to this one purpose. Only a Legislative act, signed by the Governor, can bring this project to shut down permanently. 

There can never be sufficient funding to complete this project, but it will proceed piece-meal as an endless and growing sense of anguish for many Californians,  with major upheavals in all urban areas and immense harm in the rural and farm regions.  Costs will continue to increase.  There will be legislation to find further state funding, such as another bond measure.  (See: Galgiani, Bonnie Lowenthal)

Needless to say, there must be no future further funding.  Perhaps all Californians will wake up to the harsh realities of what the downsides of this project will be and demand termination.  We can only hope.

California's Golden Future in High-Speed Rail? I don't think so.

California Democrats are obsessed with building a high-speed train.  That is to say, they are obsessed with receiving the awarded/promised $3.5 billion from the Federal Railroad Administration, DOT.  They also are eager for the release of over $2 billion in general obligation bond funds the voters approved in 2008. Their assumption is that it is beneficial to their careers to be seen pumping federal dollars into the State economy.  Also, the Obama Administration wants it.

The railroad advocates will argue that all the problems identified in this article, below, will be solved with the construction of this high-speed train.  The fact is, the construction of the train, and its subsequent operation, if construction ever gets that far, will cost the state -- that is, the taxpayers -- forever and in very large amounts.  Wm. Grindley's financial analysis papers have demonstrated this repeatedly. 

Governor Jerry Brown is certainly not a part of the solution for the problems outlined below.  He is, therefore and as the cliche has it, part of the problem.  His persistence in supporting the train project, in the face of ample evidence that it should be terminated, is reprehensible, to say the least.

Let's be realistic and clear. The $3.5 billion will do nothing to fix California.  Much of it will end up leaving the state.  Furthermore, those $3.5 billion "free" dollars from the federal government will trigger great and continuous costs to a state already at the edge of default.  Nor will it even build even a part of the HSR  project.  It will do no more than lay about 100 miles of track which, upon completion, will not be able to run high-speed trains.  Oh, and it won't create all those promised jobs, which is the current HSR justification. 

In short, the frequently used label, "The Train to Nowhere," is incorrect insofar as it is not a train at all, by which we mean the intended high-speed train.  It is merely track on which the current infrequent Amtrak passenger service may, or may not run.

This project is on Democratic heart-lung life support.  It can never overcome it's inadequacies, including future funding which is less likely than ever. Time to pull the plug.  It's the kindest thing the Democrats can do for their constituents.

I will assume that you will be as appalled at what you read in this article as I am.   

First Step for California: Admit There's a Problem

The October 29, 2009 issue of Time Magazine had an article titled “Why California is America’s Future.”  I sure hope not.  California is fast becoming a post-industrial hell for almost everyone except the gentry class, their best servants, and the public sector.

We only need a few numbers to demonstrate that California is clearly on the wrong track:

California’s unemployment rate is over 12 percent, about a third higher than the United States.
Only eight of California’s 58 counties have unemployment rates in single digits.
California has lost jobs in four of the past six months for which we have data, while the United States has gained or had no change in jobs in each month over that period.
California’s poverty rate is 16.1 percent compared to the United States 15.1 percent.  The rate goes way up when adjusted for the cost of living.  For example, the respected Public Policy Institute of California estimated that Los Angeles County's 2007 poverty rate increased 11 percentage points from 15 to 26 percent, when adjusted for cost of living. 
Two California cities, Fresno and San Bernardino, are among the ten poorest American cities with populations over 200,000.  In fact, San Bernardino’s 34.6 poverty rate is the second highest of these cities, exceeded only by Detroit.
Unemployment among college educated is 34 percent higher in California than in the United States, while Los Angeles’s college educated unemployment rate is almost a whopping 80 percent above the United States’ rate.
According the California Department of Education, California’s public colleges and universities graduate over 150,000 students a year, while California’s Economic Development Department is forecasting less than 50,000 openings a year for jobs that require a college degree.

Of course, that’s not the future that Time was selling.  Time’s future was a “dream state,” a magical place where enlightened pioneers, guided by their superior vision and funded by venture capital, would lead the world in innovation and environmental bliss.  California firms, like Solyndra, would lead the competition to a competitive new green economy.  No kidding, they named Solyndra:

"It's (California) building massive power plants for utilities, as well as roof panels for big-box stores, complete subdivisions and individual homes. Prices are plummeting, and competition is fierce, most of it from California firms like BrightSource, Solar City, eSolar, Nanosolar and Solyndra." 

Along the way to this brave new world, there would be a new, “green” gold rush “beckoning dreamers who want to cook Korean tacos or convert fuel tanks into hot tubs.”

That vision turned out to be about as real as Disneyland – but not as profitable. 

Time wasn’t alone.  Brett Arends had a similar piece, The Truth about California, in November 2010, and the ever-optimistic duo of Bill Lockyer and Stephen Levy had a December 2010 piece, California isn’t Broken.

Visitors can be forgiven for seeing California as a bit of paradise on earth.  It is.  I  am a native myself who could not wait to return from my job at the Federal Reserve in Washington, DC.  I remember going to Santa Barbara in October for my UCSB job interview.  Santa Barbara was magical to me, after enduring weeks of dreary and increasingly cold East Coast weather.  Santa Barbara was warm and sunny, and people were wearing the minimum legal requirements, and State Street was alive and vibrant with a happy energy I hadn’t seen since I’d left California for my East Coast job over a year before. 

I wanted that job.

You can still have that experience in certain spots in California.  There’s no doubt, California has abundant charms.  It can seduce almost anyone. 

But there is a lot of California that visitors don’t see.  They don’t see the many communities in California’s central valley where unemployment rates of over 15 percent are typical, where people live in substandard housing and face the prospect of a lifetime in an ignored underclass.

Well, they are not exactly ignored.  They receive food stamps and other subsidies, but they are denied opportunity, social mobility, or the confidence and pride that come with self-sufficiency.

You don’t have to leave Santa Monica or Santa Barbara to see poverty without opportunity though.  Just blocks from Santa Barbara’s State Street or Santa Monica’s Third Street Promenade, over-crowded units , packed sometimes by several families, are the norm, because Coastal California’s housing prices are not related to the local economy. Statewide, 28 percent of California's children live in crowded housing.  This is the highest rate in the nation, tied only with Hawaii. 

When you live here, you can’t avoid the signs of California’s decline.  Beaches I walked with High School dates are no longer safe at night.  Water lines in Los Angeles burst with alarming frequency.  Our roads are approaching gridlock and are littered with potholes.  Electrical cutbacks are common in hot weather.  Water is increasingly scarce, except in very rainy years.  Our primary schools are clearly in decline.  Even California’s higher education system, once the envy of the world, has passed its prime. Places like the University of Texas or University of North Carolina are now real competitors.

It wasn’t always this way, and it doesn’t have to be in the future.  When I started my career, California was a place of opportunity.  One could have a career, own a home, and raise a family. 

Not any more – not unless you have a trust fund or a secure pensioned public employee job. 

That’s why California’s middle class is leaving, looking for opportunity and affordable housing.  The evidence is in the migration data.  Domestic migration has been negative for over a decade.  Perhaps even more telling, only 23 percent of U.S. illegal immigrants are coming to California today, down from about 42 percent in 1990.  Even the lowest skilled newcomers know there’s shrinking opportunity here.

California has a problem, and it’s high time the political class accepted the fact.

Two steps need to be taken before any problem can be solved.  You need to recognize you have a problem.  Then you need to identify the problem.  Unfortunately, it appears that among Sacramento’s leadership, only Gavin Newsom even recognizes that California has a problem.  Governor Brown gives lip service to jobs, but like Schwarzenegger before him, identifies the failed command and control policies of the green movement as the source of the new jobs.  Solyndra has become the poster child for this fantastical policy failure.

California’s economic future is pretty grim, until Sacramento takes off the blinders and admits it has a problem. Until then, things are likely to get much worse before they get better.

Bill Watkins is a professor at California Lutheran University and runs the Center for Economic Research and Forecasting, which can be found at <>