Saturday, February 25, 2012

With the California High-Speed Rail Project, things will have to get worse before they get better.

First, a word about this blog.  I try to post an article with comments at least once a day. Some days, there are several articles worth reading and worth commenting on.  I will, on occasion, skip a day or so, but mostly I do this posting daily.  So, when you read a single article, be sure you scroll down so that you are not skipping over other new postings from that same day or yesterday.

OK. Here's the situation.  It it my guess that the Governor, the Senators and other Legislators and local politicians have come to realize that, a.) there will be no more new HSR funding from Washington, and b.) there is a very strong likelihood that the California project will never be completed.

Reality about this project has finally penetrated even the thickest of skulls. It's price makes this project ridiculous. The need for this luxury train borders on trivial.  If the project goes forward, it will be the text-book standard by which all other boondoggles will be judged in the future.

What that now means is there is an emerging scramble by all the transportation agencies both in the Bay Area and in the LA Basin seeking a piece of the action. 

I mean that there are $3.3 billion in FRA funds already awarded to California but not yet funded.  And, there are $9 billion in general obligation bonds approved by the voters and the legislature.  However, those bond funds can only be matched.  That means they can dip into the state treasury for no more than $3.3 billion to match the available federal funds.  That's all there is, and for building a $117 billion high-speed train, it's a drop in the bucket.

And that's what this scramble is now about.  The Governor has already said that the projected $117 billion for the train is far, far too much. But he also said that it can be done for far less money by using existing rail routes now in operation. Let's not even get into that looney idea.

Since when did the Governor become a railroad engineer? His very own gunslinger, Dan Richard on the rail authority signed off on the $117 in their funding plan.  Well, never mind.  What's taking place, before our very eyes, is that the funds all earmarked for the Central Valley are now fair game for the population center politicians to fight for.  

In the Bay Area they want $1 billion to upgrade the Caltrain corridor and connect it to the under-construction Trans Bay Terminal. In the LA Basin, those politicians want $1 billion for Metrolink upgrades and some other stuff. That would all have to come out of the federal $3.3 billion and it's equivalent match from the bond funds.

As it happens, the previously intended $6 billion for the Central Valley aren't even sufficient to put down around 100 miles of regular track, and not even high-speed rail compatible track at that. Now they are all fighting like sharks in a tank for those dollars to get them spread around in the population and voter-dense regions north and south.

In California, it's the Governor who has his hands on the throttle, even as he knows the limits of the available funds and that there won't be any more.  Shouldn't the Governor be the smartest guy in the room, instead of the dumbest?

It's not a pretty sight.

Our View: Brown: Legacy or lunacy
February 23, 2012 10:30:47 PM
Many people want to "put a dent in the universe," as the late Steve Jobs described his vocation. But few such people also have the capacity to put a huge dent in government finances.

One who does is Gov. Jerry Brown, with the California High-Speed Rail Authority, a project costing at least $98 billion and commonly described here and elsewhere as a "boondoggle." The CHSRA was given a green light by voters in 2008 when they passed Proposition 1A, authorizing $9.95 billion in taxpayer-backed bonds to begin the project. The rest of the money is supposed to come from federal money ($3.5 billion already pledged by the Obama administration), private investment and pixie dust.

According to an Associated Press story, even though the CHRSA came into being before Brown assumed his current office, he has "emerged as the most vocal cheerleader of a project that is as risky as it is ambitious. Building a first-in-the-nation project would provide a lasting legacy for the 73-year-old Democratic governor as he moves into the twilight of a long political career. His father is revered for promoting the construction of California's comprehensive water system and expanding the state's higher education system into a national model."

Perhaps Dr. Phil could help Brown with any issues concerning his late father, Gov. Pat Brown. But circumstances today are so different from when his father governed five decades ago.

"He calls it a legacy; I call it lunacy," Lew Uhler says of the governor's rail advocacy. Uhler is the president of the Roseville-based National Tax Limitation Committee. "It has nothing to do with anything his father would remotely touch."
Uhler pointed out that the California university system was paid for largely through taxes. But the projects most similar to the CHSRA, the state's road and water projects, were paid for by users through gas taxes and charges to water bills. These projects also benefited all Californians.

By contrast, the CHSRA "is such a narrow special-interest kind of thing," Uhler said. "The users are infinitesimal." The CHSRA's 2012 business plan projects 29.9 million to 42.9 million riders a year by the time Phase One is supposed to be complete in 2035. Phase One would run from Los Angeles to San Francisco. The original projection was for 91 million to 95 million annual riders.

And according to a January analysis by the California State Auditor, "However, the Authority's process for overseeing the development of the [2012 ridership] model lacked transparency, which may raise investor concern about the model's credibility. Moreover, the Authority has yet to fully address questions about the accuracy of the model's long term projections." Nobody really knows how many people will board the choo-choo — if it's ever built.

That's different from his father's projects. It was fairly easy to make projections in the 1950s about how many people in coming decades would be using state water, roads and universities.

Finally, Gov. Pat Brown enjoyed a sounder state financial system. There was no structural budget deficit and no looming government-employee pension crisis.

And California's K-12 schools were considered among the best in the country, whereas today they're among the worst.
The state also spent relatively less money. In fiscal year 1964-65, the state spent the equivalent of 3.95 percent of Californians' personal income on the general fund, compared with 6.07 percent for fiscal year 2010-11, the last complete budget year.

The real way Gov. Jerry Brown should imitate Gov. Pat Brown is by running leaner budgets that deliver the services already promised.

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