Monday, April 23, 2012

California High-Speed Rail Politics: Business as Usual

Journalist George Skelton gives us the argument for putting the California high-speed rail project back on the ballot.  That argument has much to recommend it.  Over the past several years, what seemed to many voters a good idea -- a high-speed train running at 220 mph from San Francisco to Los Angeles, and eventually connecting Sacramento and San Diego in this HSR network -- now looks like a major disaster hanging over all our heads.  

That hasn't stopped the federal Administration and the state government from pursuing it.  This blog is based on identifying all the reasons which this project should never have come into existence, and why it has no business being pursued.  We've addressed the endless mismanagement, the illogic, the stunning costs, unobtainable funds, and so on.

The voters were misled in 2008.  They were lied to. They did not yet grasp the depth of the economic crisis into which the US had sunk.  They were denied the truth about what this project was all about and how poorly conceived it was.  So, now, two state legislators, Senator Doug LaMalfa, and Assemblywoman Diane Harkey, want either to put this project back on the ballot for a re-vote, or simply terminate it altogether.  I'm OK with either, or both. 

George Skelton begins his argument in this article with an analogy that I have used frequently in the past with the intent of personalizing the irrationality and illegitimacy of the project. Going to a car dealer and getting screwed.

We keep trying to illustrate this dynamic in many ways that we all can grasp directly.  The experience of bait-and-switch.  Being the victims of corrupt business practices. Having been sold one thing, but receiving something else and at much higher cost.  That's what this project always was, but only now the truth has become fully revealed. 

The most recent blatant lie -- and that is exactly what it is -- is the so-called price reduction from around $100 billion to around $69 billion. That is what the rail authority is calling it, a price reduction.  But it isn't.

It's a project scale reduction. That is to say, they will do less and therefore have to pay for less.  But, what they have dropped is only so because they don't have the funds to build it anyhow. Had they the funds, they would have built what they originally intended. All their cost projections are concoctions, made up numbers without solid substance. And they remain "low-ball" numbers at that.

Therefore, we can be assured that if they ever do get further funding, this mislabeled price reduction will vaporize. And, by the way, the voters are NOT getting what they voted for. Furthermore, it still costs far, far more than what the voters were promised.   Bait-and-switch. 

I'm not sure that I agree with Assemblywoman Harkey's assessment of Governor Brown's re-election future. While there is an acknowledged power of incumbency, Brown's fate hinges on his handling of the state's economy, which remains in critical condition.

So far, not so good for Brown.  At the same time his pursuing free dollars for HSR as a vehicle for bailing out the deficit, at least to a significant degree, will become more and more obviously a misconceived intention.

Regarding HSR, Brown's arithmetic will be found severely wanting. It's going to be a net loss, not a net gain and that is becoming more apparent daily. Therefore, so long as he pursues these free funds as a short term fix and a long term cost, there will be a political penalty for him well before the next election.  He will be, like me, an old man by then and this train will not be his crowning achievement, but the cross upon which he sacrificed his political stature needlessly.

Is it not the Democratic way, to bring major issues to the voters if there is such a major conflict as in this case?  Should our elected officials deny the people who elected them a voice in something this massive if it loses whatever consensus support it previously enjoyed?  And, if the Democrats choose to deprive the voters of such a voice in this matter, what does that do to how they will be perceived in their pursuit of their political career? 

Yes, high-speed rail should be back on the ballot, and this time with far more honest and realistic information regarding its costs to the taxpayers and voters of California.  The voters should be fully informed about who the real beneficiaries will be of this project and who will bear the costs. And, as Skelton, our article writer points out, that's the last thing the Democrats want that this ballot vote would determine; that is, to lose the federal and state funding.  

Is there a reason to be disillusioned with the state (and many federal) Democratic elected officials?  I believe so.   
Voters deserve a do-over on bullet train vote
Republican lawmakers, citing changes to the deal, want to put the brakes on the project.
George Skelton
Capitol Journal

2:01 AM PDT, April 23, 2012

SACRAMENTO — The car salesman offers you a sleek new luxury model for $33,000. Go for it, you think. Time for an upgrade. Sold.

Oops, the sales guy says later. Those numbers won't pencil. We'll need $98,000.

You're stunned and outraged.

Tell you what, the dealer counters. We'll let ya have it for $68,000 and take off some options.

Take the car and shove it, you tell him. Can't afford it. Don't need it.

You're entitled to do that — back out of a car deal before taking delivery. But apparently not a bullet train.

Once you sign up for a bullet train, you're stuck, no matter the bait-and-switch on cost and details.

You're only entitled to buyer's remorse, short of a citizens' ballot initiative. And there's no special interest money to pay for that.

Put six zeros on each of those dollar numbers for the car and it's a similar story to what has been happening with California's proposed high-speed rail.

Sen. Doug La Malfa (R-Richvale) wants to give Californians an opportunity to back out of the train deal, to vote again in November on the project that has substantially changed since they narrowly approved the original version.

Being a Republican, La Malfa has no chance of getting his bill out of the parking garage in a Capitol controlled by Democrats, whose election campaigns are generously backed by labor unions seeking rail line construction jobs.

"I'm really tired of the jobs argument," La Malfa says. "We shouldn't be doing things just to create jobs. There has to be a public benefit. We could spend the money fixing highways and bridges. But it's not as sexy to do maintenance."

Then there's Assemblywoman Diane Harkey (R-Dana Point), who is sponsoring what she calls a "lemon law." It would scrap the train project flat-out. That bill also is going nowhere.

Harkey has a backup idea: Ask the voters whether they'd like to convert the nearly $10 billion they approved for high-speed rail into money to upgrade regional train systems.

"I guarantee you they would say yes," she told a Senate committee hearing where La Malfa's bill stalled last week. "Tell voters this is for regional rail, and Jerry Brown might have a win. And he needs a win, because we're going to have him [as governor] for six years."

That seemed a little startling: a Republican lawmaker conceding a Democratic governor's reelection more than two years before the voting. I asked her about it later and she didn't recant the prophesy.

"We need to have him succeed," she said. "If he succeeds, the state will succeed. We cannot afford to have the state fail."

But she criticized "throwing money away" on the Brown-backed bullet train, "or 'Moonbeam Express,' whatever you want to call it."

Brown is the biggest bullet booster, ridiculing as "declinists" the skeptics who point out that California still hasn't found nearly enough money to fund the project.

"The problem is the same thing as building the Golden Gate Bridge or the Central Valley Water Project or the transcontinental railroad or the Panama Canal," the governor said recently in a radio interview. "It takes a big mind. It takes some guts. And it takes a long time."

It also takes big bucks and a clear head.

In each of Brown's examples — and others frequently cited by him and bullet bulls — the project was paid for by a dedicated revenue source: a toll, a tax, a user fee. Or by a federal government.

California may be a so-called nation state, but that's hyperbole. We are simply a state, and a basically broke one. No state has ever built its own high-speed rail system.

The nonpartisan legislative analyst last week called funding for the Los Angeles-to-San Francisco line "highly speculative." It recommended that the Legislature reject Brown's request for $2.6 billion in bond money to begin laying track in the San Joaquin Valley.

The latest price tag for the project is $68 billion. Roughly $42 billion of that is supposed to come from the federal government. But only $3.3 billion is anywhere in sight. Private investment is also being counted on for $13 billion, but no one is buying.

If the feds don't come through, Brown wants to use new cap-and-trade fees that the state plans to collect from industry in reducing greenhouse gas emissions. But the legislative analyst warned that's legally suspect.

Nevertheless, this train seems to be leaving the station. The tracks are greased for legislative approval of the bond money in late August. A majority vote is all that's required.

Among Democrats, only three senators have been waving a red flag: Joe Simitian of Palo Alto, Alan Lowenthal of Long Beach and Mark DeSaulnier of Concord.

"Our job is oversight, not cheerleading," Simitian declared last week as he chaired a contentious budget subcommittee hearing on Brown's bond request. One would hope.

Lowenthal, chairman of a Senate Committee on High-Speed Rail, told me: "I'm real nervous about this. I've got to be convinced, and right now I'm not. We could lose our shirts on this."

Yet no Democrat seems willing to ask voters again about the bullet. And that's understandable. They'd probably derail the train for good, polls show.

Without a new public mandate, however, this project will be very risky — not only for the state treasury, but also potentially for Brown and the other cheerleaders.

Allowing the public a chance to cancel this dramatically altered deal amounts to good consumer protection, something Democrats normally advocate.
Copyright © 2012, Los Angeles Times

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