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. …

Click here to read the full article

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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What Californians Could Build Using the $64 Billion Bullet Train Budget

California’s High-Speed Rail project fails to justify itself according to any set of rational criteria. Its ridership projections are absurdly inflated, its environmental benefits are overstated if not actually net detriments, and its cost, its staggering cost, $64 billion by the latest estimate, overwhelms anyone with even a remote sense of financial proportions. To make this final point clear, here is an assortment of California infrastructure projects that could be paid for with a $64 billion budget.

If these projects were built, instead of the bullet train, Californians would have abundant, cheap electricity, abundant fresh water, and upgraded roads and freeways capable of handling all the traffic a surging economy could possibly dish out.

What Californians Could Build on a $64 Billion Budget

20170321-what-we-can-do-w-64B-1

(1) Build 10 natural gas power plants generating 6.2 gigawatts of electrical output for $5.7 billion.

According to the U.S. Energy Information Administration, a modern natural gas power plant generating 620 megawatts can be built at a capital cost of $568 million. Someday, when electricity storage technologies are inexpensive and safe, the solar age can ripen to maturity, but in the meantime, California’s private energy companies can tap abundant in-state natural gas reserves, enabling California’s public utilities to provide cheap electricity to the public.

Since California’s peak demand rarely exceeds 50 gigawatts, increasing capacity by 12 percent will drive the price for electricity way down, making California competitive again with other states. Cheap electricity will also obviate the need to force consumers to purchase extremely expensive “energy sipping” appliances that are internet enabled, monitor your behavior and penalize you if you run your dryer at the “wrong” time, break down a lot, are unnecessarily complex, and require ongoing warranty and software upgrade payments forever.

Who needs that? Build natural gas power plants and develop natural gas.

(2) Build plants to desalinate 1.0 million acre feet of seawater per year, supplying 1/3 of ALL California’s residential (indoor and outdoor) water requirements for $15 billion.

Desalination plants are being developed all over the world, and California, with only one major desalination plant operating (Carlsbad in San Diego), is way behind. Desalination requires no more energy today than the amount of energy already being used to transport water from California’s northern regions several hundred miles south (and over the Tehachapi mountains) to Southern California’s coastal cities. The California current, second in flow volume only to the legendary Gulf Stream, can easily disperse the brine left over after extracting fresh water. The energy and environmental issues surrounding desalination have been addressed, and nobody would ever build these plants more responsibly than Californians.

While desalinating water from the sea, at a capital cost of $15,000 per acre foot of annual output, is the most expensive means of increasing California’s water supply, it has the unique virtue of being the only way to actually create fresh water, as opposed to reuse or redistribution. It is a technology that has been proven at large scale for decades and is a necessary part of California’s strategy to increase water security as the state alternates between wet and dry multi-year weather cycles.

(3) Build plants to reclaim and reuse 2.0 million acre feet of sewage per year, supplying 2/3 of ALL California’s residential (indoor and outdoor) water requirements for $10 billion.

Californians produce about 3.0 million acre feet of sewage per year, and today only a small fraction of that sewage is treated to “potable” (drinkable) standards. In California’s huge coastal urban centers this sewage is treated sufficiently to be released into the environment where it wasted as outfall into the ocean. A recent installation in Orange County, the “Ground Water Replenishment System” (GWRS) plant, reclaims as indirect potable water 70,000 acre feet of sewage per year, at a capital cost of only $350 million (not much when compared to the bullet train budget). This equates to a capital cost of $5,000 per acre foot of annual output, which is one of the most cost-effective ways to increase the supply of fresh water for Californians.

Sewage reuse combined with desalination not only have the potential to fulfill 100 percent of California’s residential water requirements for a combined price of $25 billion, but the treated water can be injected into coastal aquifers, combating saltwater intrusion. Currently these aquifers are often replenished with water transported from rivers hundreds of miles to the north, at equal or greater cost.

(4) Build the Sites Reservoir for $4.4 billion.

Anyone who has taken a look recently at the San Luis Reservoir in Central California, now 100 percent full, can appreciate the beauty of off-stream storage. Fed by surplus run-off water that is delivered there by aqueduct, and available for farms and urban use, this reservoir minimizes environmental harm because it doesn’t block the flow of any river. Like San Luis and just as big, the proposed Sites Reservoir, with a planned capacity of 1.8 million acre feet, will be situated in the semi-arid foothills of California’s Central Valley. Unlike San Luis, the Sites Reservoir will require almost no aqueduct, because it will be up in the northern Central Valley, immediately west of the Sacramento River. If the Sites were available today, it would already be filled up with runoff from this year’s many storms, and filling it would have taken pressure off of levees from Sacramento all the way to the delta.

The vast, 100% full San Luis reservoir, 84 square miles, holding 2.0 MAF.

(5) Build the Temperance Flats Reservoir for $3.3 billion.

While this proposed reservoir is in-stream, and would dam the San Joaquin River, it nonetheless has virtues that make a strong argument for its construction. First of all, there are already dams on the San Joaquin River, which would be submerged beneath the larger Temperance Flat dam. With planned storage of 1.3 million acre feet, the Temperance Flat reservoir would guarantee more water to farmers in the dryer reaches of the San Joaquin Valley even during droughts. It would also ensure a reliable flow into the San Joaquin river, to protect its riparian habitats during droughts.

(6) Widen and resurface every major interstate (and then some) in the entire state.

Are you tired of risking your life on Interstate 5 when it’s only two lanes in each direction, and trucks clog the slow lane and speeding tailgaters own the fast lane? Then spend $15.4 billion to add lanes and resurface the entire length of Highway 101 (807 miles), Interstate 5 (796 miles), Route 99 (415 miles), Interstate 15 (294 miles), Interstate 10 (243 miles), Interstate 80 (204 miles), and Interstate 8 (172 miles). According to the American Road and Transportation Builders Association, this will cost $5.25 million per mile, and the freeways just listed total 2,931 miles.

(7) Fix the Potholes.

With everything noted so far, we have only used up $53.8 billion. That is, for only 84 percent of the bullet train budget, we have delivered to Californians cheap, abundant energy, abundant water, and unclogged our major freeways. But we still have $10.2 billion left. What to do? Why not fix the potholes? For $10.2 billion, we can resurface 8,160 miles of 4-lane roads, or, presumably, an even greater length of 2-lane roads. Isn’t that the first thing that goes when governments go astray, and prioritize pet (and useless) environmentalist mega-projects ahead of serving the public? Potholes?

Apart from the fact that a few farms have been purchased in Fresno County, and a few pylons have been stuck in the ground, and a handful of extremely well-paid bureaucrats are doing everything they can to preserve their jobs, why is high-speed rail still being pushed? The reasons are a disappointing example of our dysfunctional democracy here in California. Because you could accuse every project on the above list of being susceptible to cronyism and cost-overruns, and you’d be right. Just as the Bullet Train will never get built for a mere $64 billion, it is likely these projects will also, in aggregate cost more than $64 billion. But we’d have abundant energy, abundant water, and a 21st century network of wide, upgraded freeways. If you’re going to play the innately corrupt game of public works, build things that help people live better, more prosperous lives!

Instead, California contends with an alliance of financial oligarchs whose pecuniary interests depend on Californians paying punitive prices for energy and water. Their green energy and high-tech ventures depend on forcing Californians to completely retool their homes with new, upgraded appliances (all of them – washer, dryer, dishwasher, air-conditioner, furnace, refrigerator) that are efficient to the point of diminishing returns. As mentioned, these appliances now double as surveillance devices that will force us to live our lives according to utility company algorithms. Utility companies, of course, no longer make profits based on the quantities of energy or water they deliver, but rather on fixed percentages over cost, which means to please their shareholders, units of energy and water have to cost more. Much more. And manufacturers are thrilled to design all this frippery into their appliances so they can sell them as a service requiring perpetual payments, instead of a durable good.

Our household has a washer that we bought, already used, for $25 in 1999. It has never broken down. No ongoing warranty payments. No ongoing “software update” payments. Do you think you’ll be able to say any of that about any appliance purchased in the last few years?

For anyone who wants this lucrative, exploitative party for the oligarchs to continue, high speed rail is a good place to put what remains of California’s public financing capacity. The environmentalist lobby, firmly in the pocket of these oligarchs, offers up high speed rail to private construction unions, who lack the clout or the vision to demand something that might actually adhere to their ideals – i.e., the projects listed above, that would help ordinary working families in California.

Ed Ring is the vice president of policy research for the California Policy Center.

REFERENCES

(1-a) Cost for modern natural gas power plant generating 620 megawatts
Source: U.S. Energy Information Administration
https://www.eia.gov/outlooks/capitalcost/

(1-b)  Peak megawatt demand in California (July 24, 2006) just over 50 gigawatts
Source: California ISO, California Peak Load History 1998 through 2016
https://en.wikipedia.org/wiki/Energy_in_California

(2) Cost for desalination plants – global comparisons:
Source: California Policy Center, Rebuilding California’s Infrastructure – Desalination
http://californiapolicycenter.org/rebuilding-californias-infrastructure-desalination-part-4-of-6/

Recently constructed desalination plants in Israel, rest-of-world, and California:

(2-b) Annual water consumption in California (million acre feet):

Source: Public Policy Institute of California – Uses and Value of Water, Table 2.2
http://www.ppic.org/content/pubs/report/R_211EHChapter2R.pdf

(3) Cost for sewage reuse plants:
Orange County GWRS IPR Project (2008) Fountain Valley
Source: California Policy Center, Rebuilding California’s Infrastructure – Water Reuse
http://californiapolicycenter.org/rebuilding-californias-infrastructure-water-reuse-part-2-of-6/

(4) Most recent and highest cost-estimate for Sites Reservoir:
Source: KCRA News
http://www.kcra.com/article/5-things-to-know-about-the-proposed-sites-reservoir/8593792

(5) Highest cost-estimate for Temperance Flat Reservoir (estimates range from $1.2 billion to $3.3 billion):
Source: U.S. Bureau of Reclamation
https://web.archive.org/web/20120316022146/http://www.valleyvoicenewspaper.com/vv/stories/2009/vv_temperanceflat_0164.htm

(6 and 7 – a)  Cost to add lanes and resurface freeways:
Source: America Road & Transportation Builders Association
http://www.artba.org/about/faq/ 

(6 and 7 – b) Length of California’s principal highways and freeways:
Source: CaHighways.org
http://www.cahighways.org/itypes.html

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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As U.S. Moves Right, Will California’s Outlier Status Accelerate Exodus?

californiaAfter recovering from the shock of the presidential race, California pundits began absorbing what all this actually means. There is broad agreement that the rightward movement by the rest of America has only increased the political divide between the nation as a whole and California.

This divide has widened so significantly that Governor Brown joked about building a wall around the state to protect it from nasty conservatives. And a handful of ultra-progressives, distressed at the thought of a Trump presidency, are planning an initiative they hope will lead to California seceding from the United States. (Newsflash for backers of this “Calexit” effort: That a state can’t secede from the Union was resolved in 1865 when General Lee surrendered to General Grant at Appomattox).

Putting the jokes and unrealistic fantasies aside, there are real world implications for the increasing chasm. First, if it were evident prior to the election that California has “go it alone” policies on climate change, it is even clearer now. Sure, Washington will continue to pay lip service to greenhouse gas reductions, but broad, draconian laws and regulations perceived to be damaging to the economy will be shelved.

Second, the High Speed Rail project might have just graduated from being a mere pipedream to a true fantasy. Already Congress had shut the spigot of federal money and the project has been on life support using cap and trade revenue which doesn’t generate a fraction of what it needs for the train to become viable.

Third, perhaps the biggest hit to California will come in the area of health care. While other states have resisted full implementation, California has been held up as Obamacare’s shining example of “success.” But a Republican Congress is likely to repeal major parts of the law, including the funding for Medicaid expansion and elimination of the federal tax credits that lower premiums for most California enrollees.

This enormous gap between right America and left California will result in the state no longer being able to rely on the federal government to finance its left-of-center policies. And that’s bad news for taxpayers.

Without federal support and California’s majority party wanting no slowdown in their agenda, the pressure to raise taxes will grow even stronger. So even though California will have the highest income tax rates in the nation until 2030 – thanks to Prop. 55 – and the highest state sales tax, expect the alligators of the left to be searching for their next meal. No doubt, they will put Prop. 13 on the menu.

The non-stop pursuit of an even higher tax burden has already resulted in millions leaving California. The growing fissure between the rest of nation and the state’s pursuit of destructive progressive policies is giving millions more Californians an excuse to bail out.

It’s not just the hard data from the IRS and the Census Bureau that confirms this. We all know people who have made the choice to escape California’s hostile tax and regulatory environment. A neighbor of mine just left to visit the multi-acre parcel he bought in Texas. When he retires in four years, he will build a home on the property. He is currently an attorney with the state.

A close family relative and her husband left the Bay Area for Oregon in large part for tax reasons. This is especially ironic given that they are both liberals who, as California residents, voted for every tax increase on the state and local ballot.

Another close relative who was visiting her mother on the Gulf Coast of Florida tells of miles and miles of white sand beaches with homes on the ocean that can be purchased for what a 1,200 square-foot condo would cost in San Francisco. Derided as the “Redneck Riviera,” the Gulf Coast is now a favorite of former Californians in large part because there is no income tax.

Can California change course? As long as those interests which rely on government largess own the Legislature, the prognosis is not good. With trillions in public debt of all kinds, an unresponsive and arrogant administrative state and high cost of living, California is bound to see the exodus that has already started to accelerate quickly.

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.

This piece was originally published by HJTA.org

Debt Addicts Spend Big Opposing Prop. 53

vote-ballot-electionThe usual suspects are digging deep into their pockets to make sure that California’s borrowing binge remains unchecked. Contractors, unions and bond houses that benefit from state debt are contributing millions to defeat Proposition 53, the Stop Blank Checks initiative. This straightforward proposal simply requires voter approval of state issued construction bonds larger than $2 billion.

These insiders are being joined by the ultimate insider, Gov. Jerry Brown, who has contributed $4.1 million left over from his 2014 reelection campaign. So far, over $15 million in campaign cash is being used for a massive television buy featuring the governor calling for Prop. 53’s defeat because, he says, it will increase the cost of “roads, bridges and hospitals.” This claim is ludicrous on its face. Prop. 53 creates no new costs, but allows taxpayers to approve new debt.

Even if he believes his own words, Brown may have a less obvious motivation for wanting to defeat Prop. 53. He is concerned about his legacy and fears that allowing voters to decide important spending issues might make it more difficult to build that upon which he has seized as his ticket to immortality, California’s high-speed rail project.

When first elected governor in 1974, Edmund G. (Jerry) Brown, Jr. was the nation’s youngest. Now, in what are probably his final two years in elective office, he is the oldest. Considering his senior status, it would not be surprising if his thoughts have turned to how he will be regarded by future generations. Brown is well aware that his father, Edmund G. Brown, Sr., who served as governor from 1959 to 1967, established a reputation as a builder of freeways and universities. Ironically, this was back in the days when the state relied more on a “pay-as-you-go” approach, rather than on massive borrowing to fund projects.

Brown continues to promote high-speed rail even though it’s now clear it can meet none of the promises made to voters back in 2008 in terms of costs, travel time and no public subsidies. Recent polls show that Californians would overwhelmingly reject what is now seen at best as a sop to political insiders and, at worst, the biggest public works boondoggle in America.

California voters of all stripes support infrastructure improvements. There is no question we need better roads, water storage and bridges. But citizens are tired of being lied to. Both the high-speed rail project and the infamous Bay Bridge (rusty bolts and all) blew through their original cost estimates by many factors.

Proposition 53 guarantees voter approval for megaprojects which are far more susceptible to questionable financing than small projects. Such voter approval is already required for general obligation bonds repaid from the state’s general fund. Proposition 53 imposes transparency with new debt by preventing the state from issuing “revenue bonds” and other vague instruments of debt, like “certificates of participation,” over $2 billion without voter approval.

So, in looking at the opponents of Proposition 53, we see the “greedy,” those who depend on the continuation of unrestricted government debt to maintain their high life, and the “needy,” in this case a governor desperately seeking a legacy.

With the political insiders arrayed against them, taxpayers will have to fend for themselves and by passing Prop. 53 they can guarantee that those who pay will have the final say.

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.

Proposition 53 and Voter Power

One California ballot initiative getting far less attention than it deserves is Proposition 53. It would require statewide voter approval for revenue bonds (not now subject to voter approval) in excess of $2 billion.

The anti-Proposition 53 theme is that rather than giving citizens more power, it would reduce their power over local government. Their voter guide statement claims it “erodes your voice and the voice of your community,” allowing “voters in faraway regions the power to deny local projects your community needs.” Unfortunately, those claims, focus-grouped to trigger knee-jerk “no” votes, are deliberate distortions.

Opponents’ claims that Proposition 53 would lead local voters to lose control over local government ignore that it “does not apply to bonds sold by cities, counties, schools, community colleges, and special districts,” which involve the local issues voters care about most. And state general obligation bonds already require voter approval. What Proposition 53 focuses on are joint power agencies (JPAs) which combine different government bodies, because JPA revenue bonds do not require voter approval in California (though they do in some states).

Local voters already have very little power over JPAs, however, making the hobgoblin of lost local voter control imaginary. JPA boards include elected officials from government bodies involved (not all local) and sometimes, those in appointed government positions. Voters have no power over any appointed members. While they can vote for representatives to their local governments, those representatives will always be a minority on the board, so voters have no control over who will be selected as JPA board members. If voters are unhappy with those selected, even throwing them from office (for a generally low voter-visibility role) gives them no power over who will replace them. And while voters have very limited legal power to override JPA decisions (via an initiative within 30 days), its difficulty seldom makes it an actual option. With so little local voter power over JPAs, Proposition 53 cannot eliminate an appreciable amount of it.

High Speed RailThe Legislative Analyst’s conclusion that few projects would likely be subject to Proposition 53 similarly undercuts the lost voter power narrative. The two projects that will clearly be affected — the extraordinarily expensive bullet train and Sacramento delta water tunnel — are also instructive. Neither are really local projects, but ones that would substantially reshape California’s economic landscape, illustrating that JPAs allow policy making for state level issues, while evading the requirement of putting such bonds to a citizen vote.

If citizen control was the real issue motivating Proposition 53’s opponents, local good government and taxpayer groups would offer widespread support. But they do not. State and local taxpayer groups, in particular, favor Proposition 53, reflecting widespread belief that the projects in question can’t be justified and that citizens would be better served by Proposition 53’s securing of more voter power.

Further, virtually all the opponents of Proposition 53, supposedly on behalf of voter groups who favor it, come from groups who benefit from more government projects. Unions and their members who construct the projects (supported by other unionized government employees), those whose sales of goods and services will increase, as well as a host of consultants and lobbyists, all want more construction, regardless of whether those projects advance Californians’ well-being. Similarly, JPA board members, officials who select them, and Sacramento legislators gain power from evading voter approval requirements.

Anti-Proposition 53 attacks add other distortions, as well. Most notable is the complaint it doesn’t precisely define “project,” knowing that highlighting ambiguity will generate more “no” votes. Unfortunately, the greatest problem with such ambiguity is government’s ongoing efforts to weasel out of every constraint those it supposedly represents try to impose on it, amply illustrated by the bullet train saga. That is a problem of abusive government, which needs to be contained, not a reason to keep voters from having any effective power to defend themselves from its abuse.

Proposition 53 is an effort to improve Californians’ self-defense capabilities against government’s ability to impose harm on them. Those who will be better protected, and have seen through the subterfuges, back it by large margins, while opponents, who benefit even from projects that harm Californians, rely on focus-grouped, misleading claims to fool low-information voters. We can only hope that Proposition 53’s opponents have underestimated the gullibility of those they claim to serve.

Gary M. Galles is a professor of economics at Pepperdine University, a research fellow at the Independent Institute, adjunct scholar at the Ludwig von Mises Institute, and member of the FEE faculty network. His books include Apostle of Peace (2013), Faulty Premises, Faulty Policies (2014) and Lines of Liberty (2016).

Controversial Climate Change Legislation Signed by Gov. Jerry Brown

Photo courtesy Steve Rhodes, flickr

Photo courtesy Steve Rhodes, flickr

Over staunch opposition on his right, Gov. Jerry Brown signed several new climate bills into law, aiming to keep California on the regulatory trajectory first set during former Gov. Arnold Schwarzenegger’s administration.

That suite of laws, “in which polluters pay to offset emissions under a declining cap, is on tenuous footing amid litigation and uncertainty in the Legislature,” the Sacramento Bee noted. The idea of a new set of rules, “negotiated by Brown and legislative leaders last month, was significant to many moderate Democrats who viewed spending in their districts as critical to buttress a state climate program that has faced heavy resistance from industry,” the paper added.

Complex divisions

Some Democrats with that stance have worried that national and statewide populist sentiment could pose an especially sharp threat to their political fortunes this election year. Complicating the ideological picture still further, “many lawmakers representing low-income communities of color made themselves a force in the state’s climate change debate after complaints that existing policies weren’t doing enough to benefit the districts they represent,” as the Los Angeles Times noted.

But Democrats further to the left did not want to back down, or be seen as backing down, to industry interests. At the same time, however, their own interests have not shifted measurably closer to Gov. Brown’s, which have wound up at loggerheads with party members to his left over allocations to projects such as the state’s bullet train. With talks moving slowly, “Brown negotiated the spending plan with top Democratic legislative leaders Assembly Speaker Anthony Rendon of Paramount and Senate President Pro Tem Kevin de Leon of Los Angeles,” according to KPBS. “It was approved on the last day of the legislative session, Aug. 31.”

Big ticket

Environmental activists and policymakers embracing their cause had to scramble to craft the fresh scheme in a way that seemed to ensure it could survive a spirited fight during the legislative process. “The new plan, outlined in SB32, involves increasing renewable energy use, putting more electric cars on the road, improving energy efficiency, and curbing emissions from key industries,” NPR reported. “Brown signed another bill, AB197, that gives lawmakers more oversight of regulators and provides aid to low-income or minority communities located near polluting facilities such as oil refineries and factories.” All told, the package amounted to some $900 million in outlays sourced from the state’s cap-and-trade revenues. “The money represents two-thirds of the available funding from California’s carbon-emission fee,” noted KPBS.

On hand for Brown’s signing ceremony in Fresno, Republican Mayor Ashley Swearengin touted the prospect of statewide infrastructure construction associated with Brown’s environmental agenda, which would include the long-simmering high-speed rail effort. With success, “Swearengin added, the Valley will see a 40 percent reduction in greenhouse gas emissions over the next 20 years,” the Business Journal noted.

Lingering resistance

But business, energy and conservative groups, which had struggled to turn the tide against the bills, quickly vented their frustration. “Taken together, SB32 and AB197 impose severe caps on the emission of greenhouse gases in California, without requiring the regulatory agencies to give any consideration to the impacts on our economy, disruptions in everyone’s daily lives or the fact that California’s population will grow almost 50 percent between 1990 and 2030,” said Allan Zaremberg, California Chamber of Commerce president and CEO, in a statement.

Under Zaremberg’s leadership, the organization has spearheaded litigation targeting the current cap-and-trade regime. “A state appellate court is considering a challenge by the California Chamber of Commerce, which argues the fee is a tax that needed support from two-thirds of the Assembly and Senate in order to be valid,” KPBS recalled. “Republicans have in the past said it’s irresponsible to spend money generated from a fee being challenged in court.”

Originally published by CalWatchdog.com