Bullet train is likely to face more environmental hurdles

As reported by the Los Angeles Times:

California’s high-speed train project is likely to continue to be buffeted by environmental challenges as a result of a decision by the state’s top court.

In a 6-1 ruling last week written by Chief Justice Tani Cantil-Sakauye, the California Supreme Court decided that federal rail law does not usurp California’s tough environmental regulation for state-owned rail projects.

The decision has broad significance, lawyers in the case said.

It clears the way for opponents of the $64-billion bullet train to file more lawsuits as construction proceeds and also allows Californians to challenge other rail uses, such as the movement of crude oil from fracking.

A federal court could later decide the matter differently, ruling that U.S. law trumps state regulation.

But lawyers in the field said …

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GOP lawmakers bet bullet train bad news will never end

high speed rail trainWill news about the California bullet train’s cost overruns and missed construction deadlines remain the norm for years to come? Or will the state’s $64 billion project find a groove and make considerable progress in coming years?

These are the key questions prompted by a concession that some Republican state lawmakers gained in return for helping Gov. Jerry Brown keep alive the state’s greenhouse-gas emissions cap-and-trade program until 2030. The provision could eventually end the state’s high-speed rail project, leaving a massive white elephant in the agricultural fields of the Central Valley. Or the concession could end up yielding a second vote validating a project first approved by state voters in 2008.

The concession – secured by Assembly Republican leader Chad Mayes of Yucca Valley – places a constitutional amendment drafted by Mayes before state voters in June 2018. If passed, it would lead to a one-time up-and-down vote in the Legislature in 2024 on whether to continue allowing the use of cap-and-trade revenue to fund the project. But the threshold wouldn’t be a simple majority. A two-thirds vote would be required to allow continued use of the funds – presumably giving GOP lawmakers a prime chance to pull the plug.

So far, the funding has been substantial in one sense but marginal in the big picture of trying to pay for a $64 billion project. After the fifth year of cap-and-trade distributions, about $1 billion has gone to the California High-Speed Rail Authority, with another $500 million expected this fiscal year. But it is considered crucial because it is the only new funding source Brown has found for the project, which has been unable to gain outside investors because of rules banning public subsidies for bullet-train operations.

Rail authority chair Dan Richard says he isn’t worried about a public veto in seven years: “By 2024, we’re going to be deep into construction. We’re going to be on the verge of opening the first service. We’ll be seeing Google and others making massive investments in areas around high-speed-rail stations. The case will be there for the importance of continued funding,” he told the San Francisco Chronicle.

The authority’s 2016 business plan said the state expected to have $21 billion in hand from state bonds, federal grants and cap-and-trade funds to build a segment from San Jose heading south.

Feds expect cost overrun of 48% or more on first segment

But Mayes and other GOP lawmakers are betting that from here until 2024, the bad news about the project will never stop.

Lawyers for the Central Valley farmers and the government and civic officials they represent in lawsuits against the state government like to point out that – apart from court victories allowing the project to continue to spend public monies – there has been no substantial encouraging news about the project in years.

In January, the Los Angeles Times reported that it had obtained a confidential Federal Railroad Administration risk analysis that predicted a cost overrun of 48 percent or more on the initial 118-mile segment in the Central Valley. What the Brown administration has been saying would cost $6.4 billion is instead likely to be $9.5 billion to $10 billion, federal officials warned.

The idea that voters will be pleased with what they see in 2024 could be difficult to square with what rail authority officials told avisiting congressional delegation in August 2016: that construction is expected to stop in the middle of an almond orchard 30 miles northwest of Bakersfield when the money runs out.

This is contrary to promises made to voters in 2008 to get them to provide $9.95 billion in bond seed money for the project. They were guaranteed no construction would begin until the state could guarantee its initial segment would have financial viability without any more train tracks being laid.

This article was originally published by CalWatchdog.com

Bullet train driving local transit boondoggles

ARTICSACRAMENTO – Over the past six years, California legislators and the governor have increased overall general-fund spending by $36 billion but couldn’t find extra money to spend on road, freeway and other meat-and-potatoes transportation projects. But that doesn’t mean they weren’t spending money like drunken brakemen on myriad rail-related projects.

Sacramento’s transportation focus has been transit, which Democratic leaders believe will reduce the state’s global-warming footprint and combat congestion by encouraging Californians to ditch their cars in favor of a rail pass. State leaders complain about a lack of money – hence, the newly signed law to boost gas taxes and vehicle-license fees – but the problem always comes down to priorities.

Bottom line: California officials are far more interested in social engineering than transportation engineering. They prefer to prod and cajole us into changing the way we get around than in building the infrastructure to help us actually get around. Even the new tax-hike package includes $750 million extra a year in transit projects and for biking and hiking projects, according to a Senate Republican analysis.

The most high-profile example of this approach is, of course, the governor’s pet high-speed rail project, a $64-billion-plus project that promises to connect the Bay Area to Southern California (via a variety of Central Valley cities) in about three hours. The rail authority last week sold $1.25 billion in bonds as it seeks to get something on the ground so there’s no turning back.

As former Assembly speaker and San Francisco Mayor Willie Brown wrote in the San Francisco Chronicle in 2013, referring to the cost-overrun-laden Transbay Terminal in San Francisco: “If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.”

At least he was honest. A lot of sensible people have wondered why the Brown administration is spending so much time and scarce transportation dollars on a bullet train that won’t be particularly fast and faces enormous geographical hurdles (getting over the Tehachapi Mountains, for starters). Well, Jerry Brown is following the Willie Brown model: he’s trying to dig a hole that’s as deep and wide as possible.

In fact, state and local governments are digging several holes – fiscal sink holes, actually, that are closely linked to the bullet-train project. For instance, Orange County taxpayers, thanks to the Measure M tax, spent $120 million to build the Anaheim Regional Transportation Intermodal Center. Its acronym, ARTIC, is a good one given that the bullet train should reach that destination sometime after hell freezes over.

This largely empty 67,000 square-foot boondoggle was meant as a central hub for the county’s bus, Metrolink and other transit services – but was justified because of the role it could play as the end point for the bullet train. The project’s boosters predicted 10,000 riders daily, but it struggles to serve 2,800 a day. As I wrote for the Orange County Register recently, it was supposed to pay for itself, but it’s only expected to earn $1.4 million of its $3.9 million annual budget. The city’s tourism district has decided to stop paying the deficit, which will now be borne by Anaheim taxpayers.

It’s an even more precarious situation in San Francisco. Willie Brown might be okay with the $2.4 billion spent on that Transbay Transit Center, a similar hub in the city by the Bay, but that city’s taxpayers should be less thrilled by its $20 million in annual operating subsidies a year.

“The three-block-long behemoth was envisioned as the Grand Central Station of the West, a dynamic hub for buses and high-speed rail that would draw more than 100,000 visitors a day,” wrote San Francisco Chronicle columnists Matier & Ross. “Come opening day, however, there will be no high-speed rail. Instead, for many years, the five-level showcase … will be little more than the world’s most expensive bus station — serving mainly the 14,000 Transbay bus commuters … .”

And other costs are coming for that project. “For high-speed rail to reach the new terminal,” says California Policy Center’s Marc Joffe, “Caltrain would have to be extended 1.3 miles from its current San Francisco terminus at 4th and Townsend. It would cost a lot of money – perhaps a billion dollars – to build this new 1.3-mile subway.”

San Francisco is also spending nearly $1.6 billion, in coordination with Caltrain and the California High Speed Rail Authority, to connect the Caltrain commuter rail depot to the North Beach neighborhood. There are legitimate local reasons to extend this light-rail system perhaps, but the prospect of a pie-in-the-sky bullet train is driving some of these decisions. These are costly projects – and the money could be better spent elsewhere.

Likewise, Los Angeles Metro officials just approved a massive overhaul of Union Station to enable it to “handle an expected doubling in the number of daily passengers by 2040,” according to Curbed Los Angeles. “Another big part of the project is readying Union Station for high-speed rail service” even though “questions continue to swirl around the fate of that much-delayed project as political opposition to it grows in Congress … .”

Yeah, but you’ve got to start digging holes, especially holes that get transit advocates clapping.

Los Angeles magazine wrote last week that “Against all odds, the California Bullet Train Barrels Forward.” Well, it is true the state’s political leadership won’t take no for an answer, and the courts continue to let the current project barrel ahead even though many of its main promises are at odds with the supposedly ironclad promises made to voters when they approved the initial $9.95 billion bond funding in 2008’s Proposition 1A.

Last week, a superior court judge said bond money can be spent despite an ongoing legal challenge. But overcoming political and legal hurdles isn’t the same things as surmounting myriad fiscal and engineering feats, which lie at the heart of the bullet-train’s problems.

One of the fathers of this rail project, former judge Quentin Kopp, has argued that the high-speed rail (HSR) project “is no longer a genuine HSR system, as covenanted to California voters and the Legislature. Instead, it has been distorted in a way directly contrary to the high-speed rail plan the authority attempted to implement while I was chairman.” He takes issue with the current “blended” system, which shares commuter-line tracks near Los Angeles and San Francisco. He also complained about the way bullet-train funds are used for that central subway project in San Francisco.

Certainly, sending supposed bullet trains along commuter tracks will vastly reduce the speed of the trains – and the whole purpose of a project designed to provide speedy north-to-south transportation. But Kopp, who made his arguments as a declaration in one of the lawsuits opposing the current rail project, is thinking rationally, whereas the Brown administration and the rail authority are too busy embracing Willie Brown’s cynical approach.

I argued for the California Policy Center that the new $5.2 billion a year transportation tax really is a pension tax given that state officials have refused to rein in pension costs, which will soon require the state to dump $11 billion a year into the pension systems. Had state officials fixed the pension mess, they would have had plenty of cash to fund extra transportation projects.

But the new tax increases also can be thought of as a high-speed rail tax. If state officials weren’t spending so much money on these wasteful rail-related transit projects, they’d have extra money to fix roads, bridges and freeways – and to provide realistic transit projects rather than overbuilt boondoggles designed with a future fantasy train in mind.

Steven Greenhut is a contributing editor to California Policy Center. He is Western region director for the R Street Institute. Write to him at sgreenhut@rstreet.org.

This piece was originally published by the California Policy Center.

Judge allows California high-speed rail project to proceed

As reported by the Sacramento Bee:

A California judge allowed the state’s bullet train project to go forward Wednesday but delayed a final ruling on a legal challenge asserting the state is not keeping its promises to voters.

Sacramento County Superior Court Judge Raymond Cadei denied opponents’ attempt to temporarily block the state from spending about $1.25 billion from the sale of $10 billion in bonds last week for the project intended to link Los Angeles and San Francisco with a bullet train.

He did not immediately rule on their underlying challenge to the $64 billion project after hearing arguments.

However, recent changes to the train plan detailed in the lawsuit fall within what voters approved in 2008, Cadei said, echoing the reasoning in his tentative decision issued Tuesday. …

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Can Trump Help California Dodge Jerry Brown’s Bullet Train?

Gov. Jerry Brown, Anne GustThe State of California issued the first tranche of taxable construction bonds last Thursday for the High Speed Rail Project, making it clear that it is determined to go ahead with the unpopular project despite numerous obstacles, including federal funding roadblocks thrown up by President Donald Trump.

According to a Bloomberg News report, California officials have made a show of faith by moving forward with the $1.25 billion offering, despite challenges including a lawsuit filed in Sacramento’s Superior Court. According to a Los Angeles Times story, “The suit was brought by John Tos, a farmer; Kings County; the city of Atherton; and several opposition groups,” and focuses chiefly on AB 1889, a bill that alters the way bond money can be spent. Attorneys for the plaintiffs, who oppose the train, state that “the bond act never gave the legislature the authority to alter it.”

The project is roundly vilified by pundits and talk radio hosts up and down the state — every major California GOP politician has denounced it, with the exception of Fresno Mayor Ashley Swearengin — and now many residents who originally voted for it, no longer support what they see as Brown’s “boondoggle.”  But none of that has stopped Jerry Brown from making his legacy project the state’s top priority.

“California can well afford it, and it will make our state a much better place,” Gov. Jerry Brown said in February in a recorded news conference to which his press office referred in response to questions from news organizations. “I know we’re going up against a very red tide here of opposition. This thing is a long-term project, and one way or another we’re going to get it.”

Brown is coming off a rough couple of months, as California’s crumbling infrastructure became front page news — highlighting the apparent folly of building a very expensive train with money the state doesn’t have — while raising gas taxes that will hit the working poor the hardest.

Proceeding with the controversial project comes at considerable risk to California’s perennially shaky finances.  If the lawsuit is successful in freezing the original bond funds, that would be a major setback.

At issue in the suit is the diversion of $713 million of Proposition 1A Bond Funds — specifically designated for the High Speed Rail — to act as matching funds for a $2 Billion project to electrify and retrofit a government-owned Silicon Valley commuter rail known as Caltrain.

On top of that, if Trump freezes all federal funds, both rail projects will struggle even more. CalTrain officials were banking on a $647 million matching grant from the Federal Transit Administration — which Trump has “deferred” indefinitely.

If the federal spigot is turned off, California taxpayers might be forced to foot the entire bill, essentially killing the projects by delaying them —which can force the return of matching funds already spent.

The Washington Post reports that President Trump weighed in on the issue in a note to Congress last month, stating that “localities should fund these localized projects.”

Some political observers believe that Trump’s denial of funds is just playing politics.

Christopher Leinberger, chair of George Washington University’s Center for Real Estate and Urban Analysis, told the Post that the cuts suggest Trump is “playing to the base,” because he received much less support in urban areas than in “drivable suburban locations.”

“This is about pure politics,” Leinberger said.

Rep. Jeff Denham (R-CA), who chairs a key House Transportation and Infrastructure subcommittee, disagrees.

Denham, who lobbied Transportation Secretary Elaine Chao to deny the grant on the basis that the new Caltrain cars did not meet the definition of high-speed rail, urged Brown to find a different source of state funding for Caltrain, then reapply for the matching federal grants, cautioning that overcommitment puts other priorities at risk.

“If you’re going to continue to obligate state dollars that you do not have, then you’re in jeopardy of at some point the federal government calling for those notes to be due, which could then put public safety dollars at risk, other transportation dollars at risk or education dollars at risk,” said Denham according to Bloomberg, who sits on the transportation and infrastructure committee.

Brown, who met with Chao last month to discuss the grant, said of Denham in a phone interview with the Post:

“That’s called blackmail.”

Californians “voted for a bond issue” for high-speed rail “but envisioned other projects” using the cash, the governor said in the interview. “To go against it is the rawest, stupidest form of politics.”

Tim Donnelly is a former California State Assemblyman and author who is doing a book tour for his new book: Patriot Not Politician: Win or Go Homeless. He ran for governor in 2014.

FaceBook: https://www.facebook.com/tim.donnelly.12/

Twitter:  @PatriotNotPol

This piece was originally published by Breitbart.com/California

How the Trump administration can stop the bullet train

From the San Diego Union-Tribune Editorial Board

The only kind of news the troubled $64 billion California bullet train project seems to generate is bad news. In January, a Federal Railroad Administration analysis was leaked that projected the initial 118-mile, $6.4 billion segment of the project would run 50 percent over budget. Then last week, a Los Angeles Times report revealed that the project’s price tag may continue to be pushed higher and higher by “the complex engineering needed for passenger safety.” It also offered an alarming warning from rail safety consultant Steven Ditmeyer that corners were being cut already on safety issues for budgetary and political reasons.

The jarring questions these reports raise about the project’s finances and management couldn’t come at a worse time for the rail authority and Gov. Jerry Brown, the bullet train’s most vocal backer. That’s because U.S. Transportation Secretary Elaine Chao is being urged by California House Republicans not only to audit the project but also to reverse Obama administration decisions that exempted it from normal standards relating to the state’s use of about $3 billion in federal funds.

One of those decisions was explicit and aboveboard, if dubious: a 2012 agreement that allowed the state to spend hundreds of millions of dollars in federal funding without matching state spending. Rep. Jeff Dunham, R-Turlock, and other bullet train critics have long argued that this waiver is directly in contradiction to decades of precedents under which the federal government requires matching state spending on big projects to lock in states’ commitments to finish what they start. …

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California’s Bullet Train Could Be a High-Speed Fail Without Federal Funding

As reported by L.A. Weekly:

Two weeks ago, President Donald Trump made what might be considered his first real move to screw over California, by delaying a $637 million grant, long thought to have been a lock, to pay for electrifying a Bay Area train route. That’s bad news for Caltrain, which will have to stick to diesel gas for the time being. But it’s also bad news for California Gov. Jerry Brown’s pet project, the bullet train, which plans to share that section of track. The delay has been interpreted, by some, to be an act of political retribution, to get back at California for, oh, take your pick — not voting for Trump, for having so many “sanctuary cities,” for declaring itself the vanguard of the resistance, and so on.

Lisa Marie Alley, a spokeswoman for the California High Speed Rail Authority, downplayed the significance of the grant delay.

“I would not characterize it as a big blow whatsoever,” she said. “It’s something that is not good. The bigger question is, to the Republican administration, why would you hurt something that is creating jobs, creating a system that’s better for the environment and providing a valuable service for the Bay Area?”

The worrying thing for supporters of the bullet train, which aims to connect San Francisco and Los Angeles by the year 2029 for the not-so-low price of $68 billion (and that estimate is probably low), is if the Trump administration is willing to delay a fairly uncontroversial grant, can the nation’s largest infrastructure project currently under construction expect any help at all …

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High-speed rail’s first route segment will end in an almond orchard

As reported by the Los Angeles Times:

The state’s plan to build an initial stretch of high-speed rail line, from San Jose to a map point in the midst of Central Valley farmland, came under renewed attack at an oversight hearing Monday.

Republicans on the House rail subcommittee had sought to hold the hearing in the Silicon Valley but ran into Democratic opposition, according to sources familiar with the matter. So the group convened around folding metal tables in a nondescript basement room in a San Francisco federal building.

Rep. Jeff Denham (R-Turlock), chairman of the panel, chided the state for lacking a plan to complete the Los Angeles-to-San Francisco bullet train system.

“You could be stuck in a field somewhere between Shafter and Wasco … and … out of money,” Denham said.

The apparent absurdity of the abbreviated route was not lost on supporters. …

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High Speed Rail On Track to Incur Billions in Cost Overruns

high speed rail trainHigh-speed rail continues to be an expensive, sick joke for California. Under the current plan, it is no longer “high-speed” and projected costs, which seem to change almost daily, appear to be doubling.

In the latest news, the nascent California high-speed rail system is running $50 million over budget for a two-mile stretch in Fresno.

Let that sink in for a moment.

$50 million, over budget, for just a two mile stretch.

Let’s see, HSR has a $50,000,000 cost over run on 2 miles of a 32 mile job. Does that mean we can expect total cost overrun of $25 million per mile times 32 miles or $800,000,000?

Better yet, let’s extrapolate that to the entire project. You know, the one sold to voters. According to High Speed Rail Authority itself, over 800 miles of track are needed. So, at $25 million of cost overruns per mile, that works out to $20,000,000,000. That’s $20 billion in cost overruns!

In just 3 years, from the original passage of Proposition 1A authorizing about $10 billion in High Speed Rail bonds, the estimated cost for high-speed rail had gone from $40 billion to $98 billion, the amount that independent expert analysis had predicted prior to the bond’s being approved.

Responding to public outrage, the High-Speed Rail Authority came up with a plan costing “only” $68 billion. The new “blended” system would combine high and low speed rail, doubling the travel times as well as ticket prices.

Fearing a voter revolt, the High-Speed Rail Authority rushed to break ground, hoping that once they dug a hole, the pet project of Gov. Brown and the majority of Sacramento lawmakers, who receive backing from construction contractors and labor unions that expect to be the primary beneficiaries of billions of dollars of public spending, would be safe from outside interference.

By beginning a first segment between Merced and Fresno, the rail authority engaged in the classic Willie Brown strategy. The former Assembly Speaker, in a moment of candor, once told the San Francisco Chronicle, “In the world of civic projects, the first budget is really just a down payment. If people knew the real cost from the start, nothing would ever be approved. The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.”

Constant cost overruns and a lack of accountability plague California’s infrastructure projects. Perhaps, as a public service, it should be required that Brown’s words be reprinted in every ballot summary for every construction bond placed before the voters.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

Cap-and-Trade Revenue Drastically Lower Than Expected

carbon-tax-1In yet another blow to California’s besieged bullet train, revenues from this year’s cap-and-trade carbon credit auction fell drastically below the state’s goals, triggering a selloff that left analysts unsure of the system’s long-term viability.

“The results of last week’s quarterly auction were posted and revealed that instead of the $500-plus million expected from the sale of state-owned allowances, the state will get only about $10 million, less than 2 percent,” the Sacramento Bee reported.

“The poor results confirmed reports circulating in financial circles that the cap-and-trade program has begun to stumble. February’s auction resulted in some allowances being left unsold — the first time that had happened. Afterward, there was a brisk trade in the secondary market as speculators began dumping their holdings due to uncertainty about the future of the program, which may expire in 2020.”

Officials and activists swiftly sought to downplay the damage. “Over the long-term allowances will be needed, and so the allowances that will be offered through the auction will need to be purchased,” said Ross Brown of the Legislative Analyst’s Office. “But in the short-term it’s hard to know and it depends on the underlying supply and demand.” From an environmentalist standpoint, meanwhile, “it’s important to remember that […] it’s the declining cap — not the price or number of allowances sold at auction — that drives emissions reductions,” wrote Alex Jackson at the National Resources Defense Council. “That is the purpose of the program, not raising revenue.” But with 2020 looming, Jackson allowed, the one-two punch against high-speed rail and cap-and-trade have cast doubt on California’s strategy of fusing infrastructure and environmentalism into a single economic policy.

Case and controversy

Adding to the upheaval, the carbon credit regime itself has wound up in court, as the state Chamber of Commerce pushes to prove that the legislation authorizing its creation — AB32 — has run afoul of the state constitution. “Propositions 13 and 26 require a two-thirds majority for the Legislature to approve new or higher taxes and fees,” as Hoover Institution fellow Carson Bruno wrote at the Bee. “Whether or not AB32, which barely passed in 2006, is unconstitutional depends on whether the cap-and-trade revenues constitute either a tax or a fee. These auction revenues fit the definition of both a tax and fee. They are imposed by a government entity, spent on government activities and are collected in exchange for a transaction — in this case a permit to emit greenhouse gases.”

Officials have countered that argument in court. “The state contends the fees are not taxes, but a consequence of regulations,” as the Times noted. But a judge hearing arguments “recently asked a series of questions that perhaps fueled speculation that he might rule in favor of the suit,” according to the paper.

The governor’s gambit

Flexing his considerable political skill and discipline to balance competing interests to his ideological left, Gov. Jerry Brown had labored to ensure that cap-and-trade funds could be leveraged to make the train a viable public and private sector investment. That presumed a degree of stability in revenues that now can’t be relied on. “The rail authority had been expecting about $150 million,” the Los Angeles Times observed; now, it will receive just $2.5 million. “Whatever prompted the lack of buyers, the auction is a stark example of the uncertainty and risk of relying on actively-traded carbon credits to build the bullet train, a problem highlighted in recent legislative testimony by the Legislative Analyst’s Office and a peer-review panel for the $64-billion high-speed rail.”

Brown had hedged against just such an eventuality, however. State finance spokesman H.D. Palmer “noted that there is a $500-million reserve set up in anticipation of volatility that could help close the gap,” the Times added. But Brown will have to clear the emergency expenditure in Sacramento, where some liberal lawmakers, hoping to channel more money to environmental policy, could try to nix the scheme by aligning with Republicans long bent on scrapping the train.

This piece was originally published by CalWatchdog.com