Tuesday, November 1, 2011

HSR in California (the new Business Plan), and in Washington ( the Transportation budget)

Here are two articles about the new CHSRA business plan and the progress of the Transportation budget in Washington.

To summarize these two articles:  While the California project is now forecast to cost three times as much as originally planned, from $33 billion to nearly $100 billion (and still not enough in my mind), the Congress is moving closer to terminating future HSR funding, thereby depriving the California project of the funding they are planning on in their new business plan.

Interesting dilemma, yes?

While there's a lot going on right now in Sacramento with the new California High-Speed Rail Authority Business Plan for 2012, that's not where the real action is.

The real action is in Washington, as the Democrats and Republicans hammer out a new Transportation budget.  The key issue for us is whether there is future HSR funding or not.  It appears almost not, if you count the token $100 million the Democrats managed to leave in their version.  

But, as the article tells us, it's not yet a done deal.  Nonetheless, and even as this is the most skeptical blog concerning matters high-speed rail, there does seem to be an ever greater likelihood that there will be no further HSR funding available.

That, of course, puts some serious decision-making in the hands of the California Democratic Legislature and the Governor, who appear to be relentlessly promoting the HSR project in the face of horrendous arguments against it, including the newest costly-cost forecast of $98.5 billion.  (I've said for a number of years that the cost of $100 billion would be met and exceeded.)

Here is access to the just released CHSRA Business Plan, the press release, executive summary and a number of supporting documents.

The rail authority now wants to stretch the construction period by an additional 13 years. Why? Because they know they won't get anymore funding in the foreseeable future.  They see this now as an endless construction period over decades, perhaps never completed but also never terminated.  The game, regardless of climbing costs, is to drag this construction process out so long that, perhaps some time in the future, further federal construction funds might become available.  That's like being on death-row for the rest of your life, subject to the vagaries of who's in office.

That's not an infrastructure plan, although they keep comparing it to the Interstate Highway System which took several decades to complete.  In that instance, however, federal funds were assured with a highway tax, and whatever was built was immediately usable by the entire nation. Neither will be the case for the HSR. 

This point must be driven home here: This train, if it is ever built, will never, ever, serve the entire nation. It will serve only those who can afford the train tickets, which will surely not be less than $200. one way.  If the train is a benefit to anyone, it will be to the high-end corporations that provide travel expense budgets to their professional employees, and those tickets will be massively subsidized by the state government. 

In short, we can't afford to build it now, and can't afford to run it if it does get built. 

Senate Approves Austere Transportation Spending Bill; 
High Speed Rail Funding Plummets
By Todd Zwillich | November 1, 2011 – 12:27 pm

The Democratic-controlled Senate backed $108 billion in Fiscal 2012 federal transportation spending 69-30, flatlining budgets as Washington operates in a climate of spending cuts.

The bill passed after a long-delayed flourish of votes Tuesday.

It funds most transportation, transit and highway programs at or near levels for the Fiscal year that ended Sept 30. But when factored for inflation, it amounts to cuts to many programs. That’s largely because of new spending caps in place after Republicans and Democrats agreed to cuts during the federal debt limit fight last summer.

It also sets up a confrontation with the House Republicans, who have yet to approve a companion bill but are contemplating funding transportation at substantially lower levels. A House bill in the works now cuts $16 billion from transportation programs.

One big loser: High speed rail. The Senate bill has a mere $100 million for President Obama’s high speed rail initiative. While $10 billion has already gone to the program through stimulus and other spending, Congress is getting set to essentially zero it out for 2012. House Republicans have shown no appetite to fund high-speed rail further.

The Senate’s bill contains $55.3 billion in budget authority for the Department of Transportation. The rest is roughly $64 billion expected to be siphoned to federal highway programs through the Highway Trust Fund.

It leaves out a separate proposal from the White House that would create a $10 billion infrastructure bank to help capitalize infrastructure projects. That plan is tied up in election-year wrangling between Republicans and Democrats but may get a Senate vote in the coming weeks. Republicans have declared it dead in the House, however.

Here are a few of the funding levels contained in the bill:

$800 million in vehicle an driver safety programs

$550 million for “TIGER” infrastructure projects

$41 billion in federal highway projects outside of the Highway Trust Fund

$25 million in transit energy efficiency grants

$8 million for new safety inspectors at the FAA

Meanwhile, the Senate turned away an amendment that would have limited how states can use “transportation enhancement” funds that normally go to aesthetic projects, sidewalks, bikelanes and other goodies. It killed another that would have pared back subsidies for some rural airports.

But keep in mind: Even though the bill passed the Senate with solid bipartisan support, the fun is far from over. Thanks to partisan clashes over spending, the government is currently operating under a stopgap measure that expires November 18. If there’s no agreement on spending by then, Democrats and Republicans will either have to agree on another extension, or reach a grand bargain on spending for Fiscal 2012.

Transportation money could wriggle out from under the spending mess if the House passes its bill AND the House and Senate agree to a compromise by November 18. If not, it’s more negotiation not just over transpo dollars, but tied in with the rest of the government’s funding as well.

Follow Todd Zwillich on Twitter: @toddzwillich
Bullet train cost estimates rise to $98.5 billion
In a key change, the state has decided to stretch the construction schedule by 13 years, completing the Southern California-to-Bay Area high speed rail in 2033 rather than 2020.
By Ralph Vartabedian, Los Angeles Times
November 1, 2011

California's bullet train will cost an estimated $98.5 billion to build over the next 22 years, a price nearly double any previous projection and one likely to trigger political sticker shock, according to a business plan scheduled to be unveiled Tuesday.

In a key change, the state has decided to stretch out the construction schedule by 13 years, completing the Southern California-to-Bay Area high speed rail in 2033 rather than 2020.

The delay allows inflation to drive up the price over the additional years of construction.

The California High-Speed Rail Authority, the state agency running the project, plans to unveil the new business plan in a news conference Tuesday morning in Sacramento.

The authority's past two plans have been sharply attacked, not only by opponents but also by many supporters, for offering unrealistic construction cost and ridership figures.

The new realism could bolster political support but also stoke opponents who say the system is unaffordable in the state's current fiscal crisis.

The authority wants to begin construction next year and hopes to gain approval from the Legislature and Gov. Jerry Brown for appropriations from a bond issue that would build a $6.3-billion segment from Fresno to Bakersfield.

In the past, the California High Speed Rail Authority has estimated the cost of the system at $43 billion, based on finishing construction in 2020.

The system would run from downtown San Francisco through San Jose, Fresno, Bakersfield, Palmdale, and Los Angeles and end in Anaheim.

The higher costs projected in the new business plan result in part from the longer construction schedule and a higher estimate of future inflation. The authority is assuming inflation would average 3% per year through 2033, rather than the far more optimistic figure of less than 2% used earlier.

The price of the system has long been a moving target.

When the first business plan surfaced, it projected a $34-billion cost. By 2009, the estimate had jumped to $43 billion, in part because the authority included future inflation in the estimated cost of building the system over the next decade.

In August, the authority released two planning documents that signaled even higher costs. The cost of building only the first two segments in the Central Valley had jumped in price by as much as 100%, not including future inflation.

Unlike past business plans that have carried a single price, the new plan is expected to provide a variety of cost estimates that would run from an economy bullet train to a Cadillac model. But the range of financial options is likely to invite a new review of the project's feasibility.

At least three outside groups, including the Office of Legislative Analyst, which provides nonpartisan advice to the Legislature, had estimated the true cost of the system at more than $65 billion. And rumors had circulated in recent weeks that the authority's engineering contractors were warning that the cost could swell far higher, perhaps hitting $78 billion.

A stratospheric cost might be politically lethal, said Elizabeth Alexis, a co-founder of a citizen's watchdog group that closely monitors the project.

Where the authority will come up with the money remains unclear. It has about $9 billion in state bonds it can tap and about $3 billion in federal grants. Congress, however, has dashed hopes of additional federal funds in the near future. Later this week, the authority is supposed to unveil a separate funding plan that must be approved by the Legislature before it can appropriate money to start construction.

The estimates being released Tuesday are expected to include cost-cutting proposals to incorporate the high-speed rail system into existing commuter rail track routes in both the Bay Area and Southern California, according to sources familiar with the plan. But such a change could extend bullet train travel times.

The new plan may also provide a shorter, lower-cost — and controversial — option to route the bullet train over the Interstate 5 and Grapevine corridor between Los Angeles and Bakersfield. The current plan includes a long dogleg to the east, through Palmdale, where officials have vowed to fight to maintain their connection to the project.

Copyright © 2011, Los Angeles Times

No comments: