Quick Background: Assemblywoman Harkey, and State Senator Doug LaMalfa, have been the most outspoken critical legislators in Sacramento, proposing several pieces of legisation with the intention of terminating the California High-Speed Rail Project.
Being in the Republican minority (in both Houses), their voices falls on deaf ears among the majority Democrats who, pressured by Governor Jerry Brown, continue to support a project that has lost majority support among the voters, and continues to be exposed as totally mismanaged and fraudulent, as well as illegal on many counts.
Here are Ms. Harkey's responses to an article that recently appeared in several northern California newspapers. What the Assemblywoman is doing here is providing a context for the high-speed rail project, and that is the state's deplorable economy.
The Democratic "folk wisdom" holds that projects such as HSR will pump resources, especially from outside of the state such as the DOT's promise of $3.3 billion, into the state economy, thereby reducing deficit and debt, as well as creating jobs. That could very well be the case if those dollars were devoted to infrastructure repair and upgrades, including urban and regional public mass transit reorganization and improvement.
However, for a project of such low merit -- so unnecessary and so dazzlingly expensive -- all the available dollars will only scratch the surface of those enormous costs of this project, which will go unfinished. And that results in an enormous waste which will accomplish none of the purported goals and intentions.
The Other Side - Rebuttal to High-Speed Rail: By The Numbers
As Published in the San Jose Mercury News and Contra Costa Times on 06/08/2012
By Assemblywoman Diane Harkey
June 11, 2012
The article states, "Plans for a high-speed rail system snaking up the spine of California have the project pegged as the state's costliest ever. Lots of numbers follow a price tag that big." However, the numbers have a few caveats and are questionable as noted below:
$69 billion: Project's projected cost over decades. This number is fairy dust to make the plan more palatable. The new business plan states that for full build out it would require $91.5 billion and that is without the LA to Anaheim route which was recently added and definitely will include eminent domain and other issues.
$91.4 billion: Proposed 2012-13 state budget. Don't forget that the budget is minus the realignment funds of $5-6 billion that were part of the General Fund prior to 2011-12 budget (the "catch and release" program for state prisoners). As an aside, CCPOA (the prison guards) are hiring more people not less at the state level, even though the prison count is down due to realignment or relieving overcrowding issues by sending state prisoners to the county jails.
$15.7 billion: Estimated state budget deficit. This figure does not include the state's structural budget deficit of $35 billion that is cash flow fudging via borrowing and deferring school funding as well as internal borrowing from over 700 state accounts. In addition, our long term bond debt of $90 billion has grown from $57 billion since 2007. Our bankers are demanding trigger cuts because we have nowhere left to go for current cash flow. We borrowed $6-7 billion in Revenue Anticipation Notes (short-term bonds) that must show 1.8 x cash flow coverage plus be paid off annually before renewing. This is why the triggers were demanded, not because the Legislature or the Governor is volunteering to reduce state spending.
$36 million: Project's projected 2012-13 budget cost. What will it be next year? If we build a stranded project and wait for a few years to continue will the strip in the Central Valley pay for itself? Elusive cap and trade revenues cannot be used as by law they are to be used to reduce greenhouse gas (GHG) emissions by 2020. The revised 4th business plan calls for build-out by 2038. In the meantime, and if the ridership is less than projected, high-speed rail will be a net GHG emitter.
$750 million: Annual amount, on average, that the project could cost the state budget over 30 years. Assumes we will only be indebted for the $9.95 voter approved bond debt. What if we need to borrow more or ridership is not what the plan assumes? The Legislative Analyst claims we could see operating costs of $1 billion or more per year.
11,000: Number of public school teachers' current salaries that amount could pay a year - more with operating costs.
$3.3 billion: Federal grants tagged for project's construction - earmarked for the Central Valley and must be spent by September 2017, and matched by state funds of $2.7 billion. Estimates are that the state will have to burn through $3.5 million per day (holidays and weekends included) to meet the Fed deadline. Is it worth nuking CEQA and setting a precedent? Why not ask the President to give us a break on the $10 billion we owe for unemployment insurance that will eventually increase the premium on remaining employers?
$3.7 billion: Amount Gov. Jerry Brown is asking lawmakers to spend in state bonds to start the overall project. I believe the number is $2.7 billion. [Plus another billion for the "bookends."]
$1.3 billion: Amount of debt payments, including interest, the state would be on the hook for if the project got the ax today. So we need to continue until build out? What would the cost be if we had to access unconventional debt, if we can't get bonds because we are tapped out as we are today? Does anyone really believe the rest of the nation will pick up the tab for California to build a train?
$9.5 billion: State taxpayer burden if funding dries up after first segment of track is built. This assumes that the CHSRA can access all of the debt for Phase 1. Bond restrictions require not more than 50% of the cost for each corridor or useable segment thereof to be Prop 1A bond money, so where are the remaking funds coming from? Also does this figure account for the loss to the state in jobs and human services for the Central Valley Agricultural community, and other businesses that will be decimated during construction?
$22.5 billion: Amount in debt the state would be responsible for if entire project is built. If there is one thing we can all agree upon it is that the CHSRA lacks credibility at this juncture. Why should we accept these numbers when we don't have an accurate ridership study, true cost analysis or future funding sources lined up?
$42 billion: Highest amount of additional federal funding being hoped for. This lacks credibility.
$13 billion: Amount of private investments being hoped for. Which we will not see if we begin in the Central Valley.
520: Length, in miles, of line from San Francisco to Los Angeles as originally approved by voters. Voters approved 800 miles from San Francisco to San Diego, for a cost of $45 billion.