Ten Questions for Jerry Brown

SACRAMENTO, CA - OCTOBER 27: California Governor Jerry Brown announces his public employee pension reform plan October 27, 2011 at the State Capitol in Sacramento, California. Gov. Brown proposed 12 major reforms for state and local pension systems that he claims would end abuses and reduce taypayer costs by billions of dollars. (Photo by Max Whittaker/Getty Images)

Tomorrow, Jerry Brown will deliver his 15th and final State of the State Address. It’s too bad California legislators can’t ask questions like our counterparts in the United Kingdom, who query their head of government during “Prime Minister’s Questions.” If we could, here are 10 questions I’d ask Governor Brown:

1.)     You recently chided Congress, “It’s never good to have one party vote one way, and the other party vote 100 percent the other way. That’s dividing America at a time when we need unity.” Does this mean you’ll no longer sign legislation that is supported by only one party in the Assembly, as you did with the Gas Tax and 20 other bills last year?

2.)     For children living in poverty, California is the worst place in America to get an education, ranking near the bottom for every academic performance measure. Your education plan has added almost $30 billion in yearly spending, yet our schools have if anything gotten worse at educating poor children. How do you explain this?

3.)     Shortly after taking office, you called reforming the much-abused California Environmental Quality Act “the Lord’s work.” Yet no CEQA reform has happened during your tenure even as the cost of housing has soared to the point that 1 out of 3 Californians is “seriously considering” leaving the state because of it. With less than one year left in your term, when is the Lord’s work going to begin?

4.)     While campaigning for Governor, you promised you would not raise taxes without voter approval. Yet last year you signed a $52 billion tax increase without giving voters a say – and now, you’re opposing an effort by voters to undo that tax hike. How should ordinary Californians respond when elected officials break their promises?

5.)     In California, the cost of building a mile of road is triple what it is in other states. One reason, according to the nonpartisan Legislative Analyst, is that Caltrans is overstaffed by 3,500 positions. Yet you are proposing 400 new positions in this year’s budget. Why not learn from other states that build better and cheaper roads before making Californians pay higher taxes?

6.)     Under your watch, California’s unfunded pension liability has grown by over 100 billion, with public employees generally receiving greater benefits than workers in the private sector. You clearly recognize this as a problem, having just filed a commendable opening brief in what could be a landmark state supreme court case. So why did you allow this problem, which threatens vital services and future generations, to get so much worse?

7.)     You claim California is prosperous because it is the world’s “6th largest economy.” Yet adjusting for cost of living and population size, our economy actually ranks 37 out of 50 states in the country. Which statistic do you think more accurately reflects the well-being of ordinary Californians?

8.)     Since you became Governor, the State Budget has grown from $129 billion to $191 billion. What evidence can you point to that this new spending has improved the quality of life for ordinary Californians? Feel free to cite, for example, health outcomes, student achievement, housing affordability, infrastructure quality, workforce participation, poverty rates, family stability, or any other metric.

9.)     The projected cost of High Speed Rail now exceeds $67 billion, with new delays and cost overruns reported almost monthly. And many are doubting the bullet train will have any useful purpose. In the words of Elon Musk, “The train in question would be both slower, more expensive to operate and less safe by two orders of magnitude than flying, so why would anyone use it?” Why would anyone?

10.)     You recently accused others of “ripping the country apart” through partisan actions. Yet in the last few months you’ve called your political opponents “mafia thugs,” “political terrorists,” and “evil in the extreme.” Is this rhetoric bringing the country together?

Assemblyman Kevin Kiley represents the 6th Assembly District, which includes parts of El Dorado, Placer, and Sacramento counties.

This blog post was originally published by Fox and Hounds Daily

California’s Infrastructure Boondoggles Continue

High speed rail constructionEvery news story about the bullet train seems to be accompanied by a photo of workers building a viaduct in Fresno County.

This does nothing to dispel the impression that high-speed rail in California is actually a Marx Brothers movie.

Groucho: Over here is a viaduct leading over to the mainland.

Chico: Why a duck?

Groucho: I say that’s a viaduct.

Chico: All right, why a duck? Why a duck? Why not a chicken?

The latest news from the Marx Brothers is that the 119-mile Central Valley section currently under construction is $2.8 billion over budget.

That brings the estimated cost of the first phase to $10.6 billion and the cost of the entire project to at least $67 billion. Voters were told in 2008 that the high-speed train from San Francisco to Los Angeles would be completed for $40 billion, but more than a quarter of that money is gone and it’s not out of Fresno yet.

The train may not be going anywhere, but the project’s chief executive moved on in June, shortly after promising that there was no truth to a leaked federal report warning that the train was on track for cost overruns of more than $2 billion.

The new CEO, at a salary of nearly $385,000, is Gov. Jerry Brown’s transportation secretary, Brian Kelly. He says part of his job will be to “restore credibility” to the high-speed rail project, which would be a startling break with tradition.

Part of the problem in the Central Valley, the rail authority now says, is that construction began before all the land was acquired. This decision, which HSR executives promised not to repeat, was made because federal funds would have been lost if a deadline for the start of construction was missed.

That turned the negotiations for land into a W.C. Fields movie, “Never Give a Sucker an Even Break.”

The federal deadline for starting construction was just one of many safeguards that were put in place to try to prevent the rail authority from wasting billions of dollars on a half-finished train to nowhere. Sadly, Gov. Jerry Brown and the HSR authority found ways around all of them.

Another questionable infrastructure proposal from the Brown administration, the so-called California WaterFix, is also running into budget difficulties.

The original plan called for spending $17 billion to construct two huge tunnels under the Sacramento-San Joaquin River Delta. The idea was to get around the restrictions on pumping water from the delta to the Central Valley and Southern California, restrictions that have cut the flow of water in half since the 1980s.

The pumping restrictions resulted from lawsuits and settlements to protect declining populations of smelt and salmon, forcing another population — the people of California — to pay more for water, and for everything that’s produced with water, like food. Now billions will be spent to capture and clean up stormwater and groundwater, which wouldn’t be needed if California’s state and federal water projects hadn’t been shut down to protect the cast of “The Incredible Mr. Limpet.”

Some water districts refused to pay for the twin-tunnel project, so the Brown administration may downsize California WaterFix to one tunnel. It would still cost billions of dollars, but proponents would like you to know that none of the money will come from taxpayers. The whole thing will be billed to water users.

Californians who want to save money should take W.C. Fields’ advice: Never drink water.

olumnist and member of the editorial board of the Southern California News Group, and the author of the book, “How Trump Won.”

No More Excuses – Audit the High Speed Rail

Gov. Jerry Brown, Anne GustWith the revelation yesterday that the high-speed rail budget for the Central Valley segment jumped a whopping $2.8 billion there are no more excuses to prevent an independent audit of the rail project.

The cost for the Central Valley leg of the undertaking has jumped more than 75% from an original estimate of $6 billion to the newly revealed $10.6 billion. When voters approved state bonds to help build the venture, the total bond amount was actually under this new cost figure, less than $10 billion.

At the time of the bond vote in 2008, voters were told the entire bullet train project designed to run from San Francisco to Los Angeles was around $40 billion. That figure soon zoomed to almost $100 billion then settled back to around $64 billion.

What is the total cost to taxpayers now and how is the money being spent? An audit will tell us.

There have been previous audits of the system in 2010 and 2012. Both previous audits emphasized the risk involved in the high-speed rail undertaking.

Assemblyman Jim Patterson of Fresno in November requested an emergency audit of the high-speed rail project. Al Murasutchi, Chair of the Legislative Audit Committee, rejected the emergency audit bid. Because the legislature was in recess at the time, committee chairs have the authority to request an emergency audit. Now that the legislature is back in session, Patterson intends to request an audit before the Joint Legislative Audit Committee on January 30th.

There are no excuses this time. The taxpayers have a right to know how this long delayed, cost overrun project stands. An audit of the high-speed rail must go forward.

ditor and Co-Publisher of Fox and Hounds Daily.

This article was originally published by Fox and Hounds Daily

As problems mount, California Democrats cling to their favorite boondoggle

High speed rail constructionWhen the father of the current governor of California was governor, he was a driving force behind the highway building boom that gilded the already Golden State. Aggressive road construction and free-flowing water were Edmund G. “Pat” Brown Sr.’s lasting legacies. By contrast, Governor Edmund G. “Jerry” Brown, Jr. is looking at a legacy tarnished by a bullet train that will cost far more than projected, won’t thin out today’s jammed highways, and will never run on time.

Politicians like flashy new projects: a European-style bullet-rail line is more glamorous than maintaining battered transportation arteries and adding desperately needed highway capacity. But California’s 800-mile, high-speed rail plan is well on the way to becoming a legendary boondoggle. News that $35 million allocated for utilities costs had been transferred on an “emergency” basis to pay train contractors are one reason why Republican state assembly member Jim Patterson called for an emergency audit. “What are your plans to complete the project?” demanded Patterson last month of the California High-Speed Rail Authority. “Describe to us how you’re managing costs. Please explain to us why and how you are transferring hundreds of millions of dollars just to keep the construction going?”

Democrat Al Muratsuchi, chairman of the legislature’s Audit Committee, rejected the request on procedural grounds. His reasoning: because the legislature wasn’t in session, committee members and the public would be denied “the opportunity to have a say in the decision.” The rejection, combined with the train’s mounting troubles, makes it look like there is something to hide.

Muratsuchi has reportedly told Patterson that he can submit the request again in January, when the legislature is in session—in other words, when lawmakers will have an official opportunity to say no, or, if the request is granted, to spin whatever inconvenient news the audit turns up. Muratsuchi might think that Patterson is looking for a “gotcha” revelation to make headlines, but concern about the cost and progress of the rail line is well founded—from budget estimates and cost-containment policies to contingency planning if funding dries up. “We owe it to the people to demonstrate that the High-Speed Rail Authority isn’t going to skip town and leave us with a partially built track,” Patterson said. “Californians deserve to know what Plan B is—it’s time for a reality check.”

At about the same time that Patterson’s audit requested was denied, the High-Speed Rail Authority announced that its environmental reviews, which were supposed to be done by 2018, won’t be finished until 2020—just the latest delay in a project that has had too many to count. The Los Angeles Times reported in September that the 119-mile Central Valley segment alone is already $1.7 billion over budget and seven years behind schedule.

Policymakers sold the high-speed rail project to voters nearly a decade ago, in a ballot measure that promised a 220-mph super train that would blast passengers between Los Angeles and San Francisco in a tidy two hours and 40 minutes. Independent analysts say that the ride will likely take at least three hours and 50 minutes and as long as four hours and 40 minutes—or only an hour less than it currently takes to drive.

So it might not be very fast—but at least it will be cheap, right? Wrong again. Projected fares have risen along with the projected travel times. What was once estimated roughly as a $50 ticket between Los Angeles and San Francisco had inflated to $105 by 2009, according to the project’s business plan. The latest estimate: an $86 fare, which one can readily imagine going higher still by the time the train is operational.

Ridership estimates have steadily fallen. Voters were told that by 2030, the system would carry 65.5 million to 96.5 million riders a year—figures about three times higher than independent projections. At the lower numbers, not enough commuters will fill the seats to relieve the grinding congestion on the roads.

California has already spent more than $3 billion on a project with an estimated cost that has bounced around from the original $33 billion to $43 billion, then up to as much as $117 billion, before settling, at least for now, at about $68 billion. Some pressure is building to junk the project—to take a smaller loss now, that is, rather than a much larger one in the future. Letting the bullet train die would probably require a ballot initiative redirecting the project’s allocated but unspent funds to more useful projects—such as increased highway capacity. And that’s something that Californians could actually use.

Without Government Unions, there Would be No Gas Tax Increase

LA-Freeway-Xchange-110-105Nobody argues that California’s roads need huge upgrades. But the solution didn’t require the $0.12 per gallon tax hike that went into effect Nov. 1. The root cause of these neglected roads – and the reason even more taxes will never be enough to fix them – is the power of public sector unions, whose agenda is consistently at odds with the public interest. Let us count the ways.

1 – CalTrans mismanagement:

CalTrans could have done a much better job of maintaining California’s roads. One of the most diligent critics (and auditors) of CalTrans is state Senator John Moorlach (R-Costa Mesa), the only CPA in California’s state legislature. Last year, Moorlach released a report on CalTrans which he summarized in “7-Step Fix for ‘Mismanaged’ Caltrans,” an article on his official website. Just a few highlights include the following:

  • In May 2014 the Legislative Analyst Office determined that CalTrans was overstaffed by 3,500 architects and engineers, costing over $500 million per year.
  • While to an average state transportation agency outsources over 50% of its work, CalTrans outsources only 10% of its work. Arizona and Florida outsource more than 80%.
  • 54% of CalTrans staff is at or near retirement age, so a hiring freeze would reduce staff merely through attrition, without requiring layoffs.

But Moorlach didn’t make explicit the reason CalTrans is mismanaged. It’s because the unions that run Sacramento don’t want to outsource CalTrans work. The unions don’t want to reduce CalTrans headcount, or hold CalTrans management accountable. Those actions might help Californians, but they would undermine union power.

2 – Bullet train boondoggle:

Money that could have been allocated to maintain and improve California’s roads is being squandered on a train that will do nothing to ameliorate California’s transportation challenges. A LOT of money. According to the American Road and Transportation Builders Association, California’s freeways can be resurfaced and have a lane added in each direction at a cost of roughly $5.0 million per mile in rural areas, about twice that in urban areas.

Meanwhile, the latest estimate for California’s “bullet train,” is $98 billion (that’s $245 million per mile), thanks to construction delays, and design challenges including nearly 50 miles of tunnels through seismically active mountains to the north and south. And hardly anyone is going to ride it. Ridership won’t even pay operating costs. But Sacramento pushes ahead with this monstrous waste when that same money could (at the urban price of $10 million per mile) resurface and add a lane in each direction to 10,000 miles of California’s freeways. Imagine smooth, unclogged roads. It’s not impossible. It’s just policy priorities.

But while bad roads destroy the chassis of millions of cars and trucks, and commuters endure stop-and-go traffic year after year, the California High Speed Rail Authority dutifully pushes on. Why?

Because that’s what the government employee unions want. They don’t want roads, with all the flexibility and autonomy that roads offer. They want to create a gigantic high-speed rail empire, with tens of thousands of new public employees to drive the trains, maintain the trains, maintain the tracks, and provide security, running up staggering annual deficits. But all of them will be members of public sector unions.

3 – All rapid transit boondoggles:

In a handful of very dense urban areas around the U.S., fast intercity trains make economic sense. But most light rail schemes, along with laughably absurd “streetcar” schemes that actually block urban lanes sorely needed by vehicles, do not achieve levels of ridership that even begin to justify their construction when the alternative is using that money for better, wider connector roads and freeways. The impact of ride sharing apps, the advent of non-polluting cars, and the option of using buses to accomplish mass transit goals all speak to the superior versatility of roads over rail for urban transportation.

So why do California’s cities continue to poor billions into light rail and streetcars, when that money could be used to unclog the roads?

To reiterate: The public sector unions that run California want tens of thousands of new public employees to operate the trains and streetcars, maintain them, maintain the tracks, and provide security, running up staggering annual deficits. But doing this means that public sector union membership – hence public sector union power – will increase.

4 – CEQA reform so people can live closer to the jobs:

The median home value in the United States today is $202,700. The median home value in California today is $509,600, 2.5 times as much! There is no shortage of land in California, and the alleged shortages of energy and water are self-inflicted as the result of policies enacted by California’s state legislature. But instead of reforming California’s Environmental Quality ActSB 375AB 32, and countless other laws that have made building homes in California nearly impossible, California’s legislature is doubling down on more government solutions – primarily to subsidize either extremely high density housing, or subsidized housing for the economically disadvantaged, or both.

None of this is necessary. Outside of California’s major urban centers, there is no reason homes cannot be profitably built and sold at a median price of $202,700, and there is no reason the people living in those homes cannot drive or ride share to work on fast, unclogged freeways.

But California’s public sector unions want more regulations on home building, and they want more subsidized public housing. Because those solutions, even though inadequate and coercive, enable them to hire vast new bureaucracies to enforce the many regulations and administer the public assets. Unleashing the private sector to build affordable homes in a competitive market would rob these unions of their opportunity to acquire more power. It’s that simple.

5 – Insatiable appetite for pension fund contributions:

According to a California Policy Center study, taking barely adequate annual employer pension contributions into account, the average unionized state/local government worker in California makes over $120,000 per year in pay and benefits. But to adequately fund their promised pension benefits, employers will need to pay at least another $20,000 per employee to the pension funds. This funding gap, which equates to over $20 billion per year, is the additional amount that is required to cover the difference between how much California’s public employee pension funds currently collect from taxpayers, and how much they need to collect to keep the promises that union controlled politicians have made to the government unions they “negotiate” with. That is a best-case scenario.

It could be much worse. A 2016 California Policy Center analysis (ref. table 2-C) estimated that under a worst-case scenario, the annual costs to fund California’s public employee pension funds could cost taxpayers nearly $70 billion more per year than they are currently paying.

And by the way, California’s pension funds are themselves almost entirely under the control of public sector unions – research the background of CalPERS and CalSTRS board directors to verify the degree of influence they have. Absent significant reform, funding California’s public employee pensions is going to continue to consume every dollar in new taxes for the next several decades. The cumulative financial impact of funding these pensions is easily triple that of the bullet train’s $100 billion fiasco, probably much more.

Let’s not mince words. Government unions control California. They collect and spend over $1.0 billion every year, and spend most of that money on either explicit political campaigning and lobbying, or soft advocacy via expensive public relations campaigns and sponsored academic studies. Their presence is felt everywhere, from local transit districts to the governor’s office. They make or break politicians at will, by outspending or outlasting their opponents. At best, California’s most powerful corporate players do not cross these unions, often they collude with them.

California’s public sector unions operate as senior partners in a coalition that includes left-wing oligarchs especially in the Silicon Valley, extreme environmentalists and their powerful trial lawyer cohorts, and the Latino Legislative Caucus – usurped by leftist radicals – and their many allies in the social justice/identity politics industry. The power of this government union led coalition is nearly absolute, and the consequences to California’s private sector working class have been nothing short of devastating.

Government unions force California’s agencies to over-hire, overpay, and mismanage, because that benefits their members even as it harms the public. These unions enforce absurd policy priorities that further harm the public in order to increase their power. They are the reason California has increased its gas tax.

This article was originally published by the California Policy Center

REFERENCES

Pump bump: California drivers to pay 12 cents more per gallon starting Wednesday – San Jose Mercury, Oct. 31, 2017
http://www.mercurynews.com/2017/10/31/pump-bump-california-drivers-to-pay-12-cents-more-per-gallon-starting-wednesday/

California’s gas tax increases Wednesday – Los Angeles Times, October 31, 2017
http://www.latimes.com/politics/la-pol-ca-gas-tax-increase-political-battle-20171031-story.html

How much you’ll REALLY pay in gasoline tax in California – San Diego Union Tribune, Apr. 23, 2017
http://www.sandiegouniontribune.com/business/energy-green/sd-fi-california-gastax-20170413-story.html

What Californians Could Build Using the $64 Billion Bullet Train Budget – California Policy Center, Mar. 21, 2017
http://californiapolicycenter.org/what-californians-could-build-using-the-64-billion-bullet-train-budget/

American Road and Transportation Builders Association – FAQs, ref. “How much does it cost to build a mile of road?
https://www.artba.org/about/faq/

High-Speed Rail Delay More than Triples Planned Cost to San Jose – San Jose Inside, Oct. 2, 2017
http://www.sanjoseinside.com/2017/10/02/high-speed-rail-delay-more-than-triples-planned-cost-to-san-jose/

A 13.5-mile tunnel will make or break California’s bullet train – Los Angeles Times, Oct. 21, 2017
http://www.latimes.com/local/california/la-me-bullet-train-tunnel-20171021-story.html

California Environmental Quality Act – Wikipedia
https://en.wikipedia.org/wiki/California_Environmental_Quality_Act

State Senate bills aim to make homes more affordable, but they won’t spur nearly enough construction – Los Angeles Times, Aug. 11, 2017
http://www.latimes.com/politics/la-pol-ca-state-housing-deal-effects-20170811-htmlstory.html

California’s Public Sector Compensation Trends – California Policy Center, Jan. 2017
http://californiapolicycenter.org/californias-public-sector-compensation-trends/

What is the Average Pension for a Retired Government Worker in California? – California Policy Center, Mar. 2017
http://californiapolicycenter.org/what-is-the-average-pension-for-a-retired-government-worker-in-california/

The Coming Public Pension Apocalypse, and What to Do About It – California Policy Center, May 2016
http://californiapolicycenter.org/the-coming-public-pension-apocalypse/

CA High-Speed Rail Contractor Gets 18% Raise After Missing Completion Date

Gov. Jerry Brown, Anne GustCalifornia High-Speed Rail agreed to increase payments to its construction manager by 18 percent after failing to complete its first 32-mile section within the seven-year deadline.

President Obama and his Democrat congressional majority voted in 2010 to fund the California High Speed Rail (Cal HSR) with $2.5 billion under the American Recovery and Reinvestment Act as the centerpiece of a national network of 10 intercity corridors in California, the Pacific Northwest, the Midwest, the Southeast, The Gulf Coast, Pennsylvania, Florida, New York, and New England.

Cal HSR contractually agreed to provide bullet train service with top speeds of 150 miles-per-hour over the 118-mile section between Madera and Bakersfield by September 30, 2017, or give the money back to the U.S. Treasury.

But after spending $3 billion of the fed’s money and $7.8 billion from California bond sales and revenue from the state’s infamous cap-and-trade taxes, Cal HSR has failed to lay a mile of track over the initial 32-mile section of flat San Joaquin Valley farmland.

Rather than demand the money back from Tutor-Perini/Zachry/Parsons, its project and construction manager (PCM), Cal HSR recently voted to extend the term of the contract by 6 months and to raise the price from $34.2 million to $40.2 million, an 18 percent bump.

The move is even more extraordinary given that Cal HSR admits that the professional service contract was “based on qualifications of PCM and its 25 staffing resources, as opposed to low bid.” That means Tutor-Perini/Zachry/Parsons employees, even if they worked exclusively on Cal HSR, are each being paid an average of $240,000 for the next six months of work.

Cal HSR told the Fresno Bee that the delays were due to extended environmental impact reviews and the protracted pace of acquiring 822 parcels of mostly farmland, either through negotiated purchase or suing under eminent domain.

But the publicly available transcript of the August 16 Cal HSR board meeting regarding the $6 million increase for PCM specifically states: “This request to increase the PCM contract value is necessary, because the expenditure rate for PCM services has been higher than was originally anticipated and the current budget is no longer adequate to complete all the necessary PCM services.”

Cal HSR staff blames the delay on three issues; 1) “acceleration of the design-build contract work”, 2) “increase in value of the design-build contract”, and 3) “additional scope of the services that the PCM has been directed to perform.” Staff stated that there will be no increase in the overall cost, because $6 million will be deducted from the second and third legs of the initial 118-mile section.

Just hours before Donald Trump was scheduled to be sworn in as president, the Obama administration’s leadership at the Federal Railroad Administration modified part of the $2.5 billion federal grant to extend the completion deadline for the first 118-mile section of the California High Speed Rail project until 2022.

But a confidential Federal Railroad Administration risk analysis obtained by the Los Angeles Times estimated that the Central Valley section will not be completed until 2024.

Breitbart News reported in July, after the California Supreme Court ruled that Cal HSR would now have to comply with the California Environmental Quality Act, that the cost of the Los Angeles to San Francisco bullet-train, which had already ballooned from $33 billion in 2008 to about $79 billion last year, would be subject to at least another four-year delay.

With construction inflation expected to run at least 5.5 percent per year, even a 4-year delay could spike California High Speed Rail costs to $95 billion.

This article was originally published by Breitbart.com/California

High-speed rail service to Vegas? Merely a Desert Mirage

Photo courtesy disneybrent, flickr

Photo courtesy disneybrent, flickr

In 2014, Governor Jerry Brown infamously promoted California High-Speed Rail as the best way to travel between San Francisco and Los Angeles. To justify the estimated $68 billion price tag, the governor tried to play the funny guy, asserting that “old people who shouldn’t be driving … should be sitting in a nice train car working on their iPad, having a martini.”

Now imagine high-speed rail between Southern California and Las Vegas. Instead of enduring the drive on I-15 across the Mojave Desert, people could sit in a nice train car getting a head start on a weekend of inebriation, having five martinis. As a bonus, taking the train instead of driving would reduce greenhouse gas emissions and mitigate the effects of global climate change.

How compelling is the idea of high-speed transportation between Southern California and Las Vegas? In a July 10, 2017 opinion piece published in various California newspapers, political commentator Joe Mathews declared that building major transportation infrastructure to improve travel connections between the two regions “might be the most powerful current idea in California.”

Actually, the idea is neither current nor powerful. Politicians have touted it for decades, particularly since Amtrak terminated direct service between Los Angeles and Las Vegas in 1997 because of insufficient ridership. And so far the idea has failed to attract enough funding (public or private) to achieve it.

Mass transit between Southern California and Las Vegas is a vision similar to the planned high-speed rail system to connect Northern California and Southern California. Politicians and corporate executives make visionary statements – driven by professional public relations – that get overblown news coverage lacking in critical evaluation. Studies are done to prove the viability and feasibility of the project. Money is poured into planning and review. Then nothing substantial happens to overcome obvious hurdles to the vision.

California High-Speed Rail is a model for how visionary boondoggles get started. A coalition of corporations and unions teams up with politicians. They support a campaign asking voters to authorize government to borrow money and raise taxes to pay off that debt (including the interest). Voters then see well-tested rhetoric in the title of the ballot measure. Each voter takes five seconds to vote YES for imposing another tremendous debt burden on future generations.

It’s likely that one massive Joint Power Agency will eventually consolidate the ambitions of other Joint Power Agencies and ask voters to approve a massive bond measure to fund a passenger rail project between Southern California and Las Vegas. Before this campaign gets moving, the public needs to know the recent history of this idea.

Standard Passenger Rail Service

The most reasonable and achievable recent proposal for passenger rail service between Southern California to Las Vegas began moving forward in 2009 under the direction of Las Vegas Railway Express. The company has promised an adult-only experience called “the X Train,” or colloquially known as “the Party Train.” Originally the company planned to begin service in mid-2011. Eight years later the company is still promising to start soon.

In 2012, Las Vegas Railway Express Inc. reached an agreement with Union Pacific to use its existing track. The company now claims to be currently working with government agencies to “secure the necessary rights, equipment and facilities required to commence charter services in late 2017.”

As the company notes on its website, “there has been no regular passenger rail service between the Los Angeles and Las Vegas areas for over 18 years.” Amtrak operated direct passenger rail service between Los Angeles and Las Vegas until 1997, when it shut down the “Desert Wind” line because of declining ridership and cuts in government subsidies. Reportedly the service was unpopular in part because the trip sometimes lasted as long as eight hours. The train often had to yield to freight trains operated by the owner of the track, Union Pacific.

In weighing decisions about cost, convenience, and time, travelers had chosen instead to drive or fly via Southwest Airlines. Congress provided direct funding in 1999 to resume service, but it never started back up. Amtrak has no public plans to resume service to what is now described as a “shuttered, worn-down depot.”

Very High-Speed Passenger Rail Service (Maglev)

The empty desert would seem to be a relatively easy place to build a high-speed or very-high-speed rail alignment. In fact, there have been two proposals over several years to do this.

In the early 2000s, the Southern California Association of Governments and its individual member governments began considering public-private partnerships to plan, build, and operate a Maglev (magnetic levitation) train between Anaheim and Las Vegas. Congress even dedicated $45 million in 2006 for project planning, but three years later the Federal Railroad Administration had not released the funding. The private partner in the plan, a company called American Magline Group, had failed to raise enough money to qualify for the grant.

Today American Magline Group estimates a cost of $12-15 billion to build the complete project.  It had estimated a cost of $12 billion in 2008. People suspect – with good reason – that the cost estimate for maglev is too low.

Remember that in 2008 supporters of Proposition 1A claimed in official voter information that a complete statewide high-speed rail system in California would cost $45 billion. Today, the Authority claims a line between San Francisco and Los Angeles – sharing track at times with commuter rail – will cost $64 billion.

High-Speed Passenger Rail Service

In 2009, Senate Majority Leader Harry Reid of Nevada shifted his allegiance from the maglev proposal to a more traditional high-speed rail proposal called DesertXpress, a privately-owned operation that would run from Las Vegas to Victorville. Advantages of this proposal included a lower cost (then estimated at $6.9 billion) and a more familiar and tested technology. Supposedly DesertXpress would eventually extend to Palmdale to connect with a planned California High-Speed Rail station.

In the end, DesertXpress could not qualify for a loan of $4.9 billion or $5.5 billion from the federal government to build the project, ostensibly because it would not or could not abide by a federal requirement to purchase train sets built in the United States and could not obtain an exemption. In 2015, a consortium affiliated with the People’s Republic of China became a partner and potential funding source for DesertXpress (renamed XpressWest in 2012), but the partnership ended a year later.

Why the Failure to Move Forward?

Backers of all three of these proposals claim that people will ride their system and operators will thus make money on them. The Regional Transportation Commission of Southern Nevada Las Vegas to Los Angeles Rail Corridor Improvement Feasibility Study sees the maglev proposal as feasible and desirable. The High Desert Corridor Joint Powers Authority High Desert Corridor: Investment Grade Ridership & Revenue Forecasts projects similar success. And the X Train is sure to be a winner, if you believe the public relations over the last eight years.

Why are investors leery of pouring their money into these long-term projects? As shown when the California High-Speed Rail Authority has sought private funding (as required by voter-approved Proposition 1A), potential investors want assurances from the government to reduce their risk before getting involved.

Just like California High-Speed Rail between San Francisco and Los Angeles, the profitability of a passenger train between Southern California and Las Vegas will depend on travelers evaluating transportation options and choosing the train from among them. Ridership projections – even if they are “scientific” – have limited value because of unknown objective criteria (for example, the future cost of driving or flying) and unmeasurable subjective criteria (for example, the willingness of people to travel captive with an inebriated crowd for five hours).

The end of Amtrak passenger service in 1997 and subsequent failures to initiate three modes of intercity mass transit are warnings that trying to connect Southern California and Las Vegas may end up as another government-driven scheme to enrich special interests at the expense of everyone else. Voters need to be wary when the politicians, corporations, and unions ask them for money to make this powerful vision come true.

This article was originally published by the CA Policy Center


Kevin Dayton, a frequent contributor to CPC’s Prosperity Digest, is the President & CEO of Labor Issues Solutions, LLC, and is the author of frequent postings about generally unreported California state and local policy issues at www.laborissuessolutions.com. Follow him on Twitter at @DaytonPubPolicy.

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

Void in Leadership Continues for California High-Speed Rail

High Speed RailFour months after then-California High Speed Rail Authority Chief Executive Jeff Morales told authority board members he was moving on and two months after Morales made his decision public, the agency overseeing the state’s $64 billion bullet train project hasn’t settled on his successor.

In 2012, four months after Chief Executive Roelof van Ark abruptly left following two stormy years, Morales already had the job. This time around, the same speedy selection process seemed likely. The RT&S transportation industry website reported after Morales’ decision was announced in April that the board was likely to have his replacement approved before Morales’ final day of June 2.

But the CHSRA board met in closed session on the succession issue on May 10 and June 14 without reaching a decision. The rail agency’s number two job – deputy chief executive – has also been vacant since Dennis Trujillo left in December.

The empty slots atop the CHSRA power structure come at a critical time.

According to a federal report prepared under the Obama administration, the state’s high-speed rail project is already seven years behind schedule and on its way to having a 50 percent cost overrun on the $6.4 billion, 118-mile first segment now being built in the Central Valley.

The project also continues to face legal challenges which argue that it violates the terms of Proposition 1A, the 2008 ballot measure providing $9.95 billion in bond seed money for the project. The rail authority has won most recent judgments. But opponents remain confident they eventually will prevail because of a 2014 state appellate court ruling that held the project still was subject to a financial “straitjacket” that would require it to show short- and long-term financial viability without public subsidies before the project could significantly proceed. The project’s struggle to attract private investment shows that at least in the private sector, there are many doubts that the bullet train could operate successfully without such subsidies.

Obama administration rules could haunt project

But the election of Donald Trump as president in November also has led to a huge new headache for CHSRA. All 14 California House Republicans have urged Transportation Secretary Elaine Chao to reverse Obama administration actions that loosened federal rules to give California access to about $3 billion in federal dollars for the project.

Rep. Jeff Dunman, R-Turlock, and his colleagues have focused their harshest fire on a 2012 decision that gave the state the go-ahead to spend about $200 million in federal funds but not have matching state spending. The decision went against longstanding Washington precedent.

Withdrawing all federal funding could also be justified by citing the Obama administration’s 2009 regulations for projects that were to be paid for or partly paid for with money from the economic stimulus bill passed a month after President Obama took office. The Federal Railroad Administration rules said projects that didn’t demonstrate “reasonableness of financial estimates” and “quality of planning process” would get no funding.

That’s the same agency which recently concluded the project was seven years behind schedule and on course for a 50 percent cost overrun on its initial segment

The California High Speed Rail Authority board’s next meeting is July 18 in Sacramento.

This article was originally published by CalWatchdog.com