California: Time for a Major Change in Course

Governor Jerry Brown, California Attorney General Xavier Becerra, legislative and other government officials are fixated on battling the new administration in Washington with almost total disregard for California’s major problems and unmet needs. Failure to address these pressing problems threatens the viability of a state whose status is rapidly being transformed from “golden” to “tarnished.”

To help the political class refocus on the important, here is a list of the most exigent problems accompanied by modest solutions, as compiled by a couple of veteran taxpayer advocates who speak with, and hear from, thousands of California taxpayers.

  • car highway roadRoads & Highways – Just about any road trip one drives on in California confirms that we have gone from a world leader in highway capacity and quality to barely a third world contender. Major changes are in order. Our gasoline tax must be dedicated to roads and highways alone, not to other general fund uses like paying off state general obligation bonds, as is now the practice. Also, Senator John Moorlach’s demands to reform Caltrans should be a top priority. California spends 4.7 times as much per mile of state highway than the national average, according to the Competitive Enterprise Institute, and a 2014 government report concluded the transportation agency was over-staffed by 3,500 positions. Additionally, we should end the practice of requiring “prevailing wages” on public works projects, which are estimated to add up to 20 percent on every road and other public improvement.
  • Energy Costs – Gasoline formulation requirements, “cap and trade” and other responses to climate change must be revisited with demonstrable science and hard-headed realism to help low and middle income Californians who struggle with the costs of transportation and household energy. This is not climate change denial, but rather a recognition that it is patently unfair to burden the citizens of one state with the entirety of a global problem.
  • Business Regulations and Lawsuit Abuse – Manufacturing restrictions, wage and salary rules, workers’ compensation standards, frivolous lawsuits and “sue and settle” standards have driven the aerospace and most other manufacturing industries out of California. Time for tort and regulatory reform to establish a business-friendly climate that will encourage refugees to return and lure others to relocate here. Note: The Nestle Corporation has just announced it is moving its U.S. headquarters from Glendale to Rosslyn, Virginia taking hundreds of high paying jobs with them.
  • Land Development and Housing Costs – The mid ‘70s pioneering California Environmental Quality Act has created a nightmare for those seeking affordable, conveniently located housing, workplaces and shopping centers. It has been used as a weapon by environmentalists, competitors, “NIMBYs” and labor organizations to limit – and dramatically drive up the cost of homes, apartments and other needed facilities. Fortunately, despite the best efforts of some in Sacramento, Proposition 13 remains on the job protecting homeowners from runaway property taxes that could force them from their homes.
  • Public Transit – Gov. Brown’s “Bullet Train to Nowhere” is in a death spiral due to lack of public support, refusal of the federal government and the private sector to provide additional funds, and out of control costs due to mismanagement, malfeasance and insurmountable engineering hurdles. But fixed route/fixed rail transit remains part of the liberal social planners’ mantra. Other than in highly congested urban areas, public transit is unjustifiable in terms of both capital and operating costs. With the advent of Lyft, Uber, self-driving cars and even Elon Musk’s Hyperloop — that, within a few years, could move passengers at a faction of the cost of rail — private companies and entrepreneurs are offering answers to the mobility problem. This justifies placing renewed emphasis on fixing and expanding our highway system.
  • Education Improvements and Cost Control – “School choice” is the answer to improving K-12 student learning results. The political clout of the California Teachers Association and other teacher unions has blocked progress. Properly framed ballot initiatives may be the only realistic avenue to reform as we must stop the automatic and mindless Proposition 98 commitment of nearly half of general fund revenues – regardless of need – to K-12 and community colleges.
  • Public Employee Wages, Benefits and Pension Reforms – Public sector compensation costs for California, at both the state and local levels, are now clearly unsustainable. According to the Department of Labor, California state and local employees are the highest compensated in all 50 states. Pay, benefits and pensions of public employees have become disproportionate to their private sector counterparts who foot the bill. Adding to the approaching calamity is mismanagement – which has included criminal bribery – at CalPERS, the state’s largest public employee pension fund. Politically motivated investment strategies and fanciful predictions of return on those investments have left taxpayers on the hook for hundreds of billions of dollars in unfunded liability for current and future retirees. Consideration must be given to shuttering CalPERS and fairly allocating to each current employee their share of the retirement funds, arranging for the public employer to make up the difference for what has been promised to date, and move from “defined benefit” to “defined contribution” plans for all existing and future employees. Otherwise, this pension burden has the potential to grow so large that California will not be able to fund the most basic services and as residents flee to other states, the last one out will be asked to turn out the lights.

We call on our representatives to stop pursuing discretionary causes and pet projects and come to grips with these real problems facing all Californians.

Lewis K. Uhler is Founder and Chairman of the National Tax Limitation Committee and National Tax Limitation Foundation. He was a contemporary and collaborator with both Ronald Reagan and Milton Friedman in California and across the country.

Jon Coupal is the President of the Howard Jarvis Taxpayers Association. He is a recognized expert in California fiscal affairs and has argued numerous tax cases before the courts. 

This piece was originally published by HJTA.org

Tech founders want California to secede

As reported by CNN Money:

Shervin Pishevar, an early Uber investor and cofounder of Hyperloop, posted a series of tweets Tuesday night announcing his plans to fund “a legitimate campaign for California to become its own nation.”

And no, he’s not joking.

“Yes it’s serious,” Pishevar told CNNMoney in an e-mail. “It’s the most patriotic thing I can do. The country is [at] a serious crossroads.”

Within hours, several other tech founders offered their support for the plan.

“I was literally just going to tweet this. I’m in and will partner with you on it,” Dave Morin, an investor and founder of private social networking tool Path, tweeted in response to Pishevar.

“I support you in this effort let me know what I can do to help,” Marc Hemeon, a former Google employee and founder of Design Inc., wrote on Twitter. …

Click here to read the full article

Hyperloop vs. High-Speed Rail

HyperloopWhen Elon Musk first proposed the hyperloop as a transportation alternative, he projected sealed tubes would hurl a pod between San Francisco and Los Angeles in 35 minutes. At the time, Musk’s vision was compared to the newly minted high-speed rail project that was projected to cover the same ground in 2.5 hours and be outmoded before it was finished.

Yesterday, in the Nevada desert the hyperloop had its first test. A sled rocketed from 0 to 60 miles per hour in 1.1 seconds propelled along a track by magnets for 300-plus yards. The company behind the test, Hyperloop One, was satisfied with the results. The Los Angeles based company is aiming to run a full-scale, full-speed hyperloop prototype through what is often described like a vacuum tube by the end of the year.

While the hyperloop system was projected by some as an alternative to high-speed rail, former California secretary of business, transportation and housing, Dale Bonner, told a Milken Institute Global Conference forum at the beginning of the month that both forms of transportation would be necessary for a burgeoning population. Saying that he heard that in 10-20 years an entire population the size of Chicago would be dropped on Los Angeles, Bonner argued all innovate transportation systems would be needed, from hyperloop to high speed rail to the sharing economy transportation systems.

Brogan BamBrogan, co-founder and chief technical officer of Hyperloop One (formerly Hyperloop Technologies), which is running with Musk’s idea, told the conference that while most people have been talking about hyperloop pods as people movers, one great advantage of hyperloop would be carrying freight.

BamBrogan noted that California had two of the busiest ports in the country. He envisions the system as energy efficient, weather proof, and non-polluting. Anyone stuck behind the slow-moving line of trucks coming from the San Pedro ports up the Long Beach Freeway spewing exhaust will appreciate BamBrogan’s vision.

But the people mover aspect also could have profound impact on other social issues, if the predictions made at the conference play out.

California’s steep cost of housing is driven, in part, by the lack of places to build. BamBrogan suggested the hyperloop could reset land values and grow suburbs 30 or more miles from the city when it only takes six minutes to commute to downtown Los Angeles’s Union Station.

Hyperloop is counting on investors to help fund the project, something that has been lacking with high-speed rail.

However, Bonner warned that re-thinking might be necessary with dramatic changes in transportation. If fewer people use cars in a shared economy, there will be fewer fees and taxes paid associated with car ownership. There would also be fewer citations issued with accompanying fines.

The Milken Global Conference panel was called Harnessing Technology for the Future of Cities. BamBrogan’s hyperloop discussion starts around minute 18.

This piece was originally published by Fox and Hounds Daily

Is Hyperloop Technology the Future of CA Transportation?

Hyperloop mockupElon Musk proposed it years ago. This January, he announced he’d enable teams to test it out on a track in Texas. But the first entrepreneur to ink a deal for a Hyperloop test track will bring the concept to life in California.

According to Navigant Research and CBS News, Hyperloop Transportation Technologies — an entity that picked up independently where Musk left off with the idea — “has inked a deal with landowners in central California to build the world’s first Hyperloop test track.” Beginning in 2016, HTT would oversee construction of five miles of track along I-5, where, once completed, test speeds will be kept to around 200 miles per hours — less than a third of the top rate of travel envisioned by Musk.

Outlays for the fully-completed Hyperloop would likely come in far under the budget for California’s high-speed rail project, even with cost overruns:

The 5-mile test track is estimated to cost about $100 million, which Hyperloop Transportation Technologies hopes to pay for with its initial public offering (IPO) later this year, according to Navigant’s blog. Assuming building costs remain the same, a 400-mile (644 km) track between Los Angeles and San Francisco would cost about $8 billion (not including development costs), experts estimate. This price tag is still far less than that for California’s planned high-speed rail project, which could cost $67.6 billion, according to the California High-Speed Rail Authority.

Multiple teams

HTT emerged from a crowdsourcing platform, JumpStartFund, created in 2013 by Dirk Ahlborn. “He’s used it to attract experts with day jobs at universities and companies such as Boeing and SpaceX who moonlight on the project in exchange for future profits,” as National Geographic explained.

But HTT has developed a reputation as the scrappy upstart among contending Hyperloop initiatives. Hyperloop Technologies, based in Los Angeles, assembled an all-star team. NatGeo counted “Brogan BamBrogan, a key former SpaceX engineer; Jim Messina, the manager of President Obama’s 2012 re-election campaign; David Sacks, who worked under Musk at PayPal, and Shervin Pishevar, investor in ridesharing company Uber who prodded Musk to go public with his Hyperloop vision.”

Skepticism and savvy

As has long been the case with newfangled technologies, critics have not been shy about questioning the mechanics behind Hyperloop’s eye-popping goals. Beyond simple safety concerns — a leak in the vacuum created to make it move so fast would be disastrous — critics have claimed that “solar panels alone cannot generate the energy needed for 800mph travel. Even if successful, the issue of the enormous g-forces experienced by passengers when travelling at the Hyperloop’s top speed will also need to be addressed,” Alphr reported.

But for now, the intrinsic appeal and excitement of Hyperloop has brought enough momentum to carry the project forward. Looking to capitalize on the interest, Ahlborn has even teased the ultimate in futuristic transportation: a free ride. As Endgaget noted, he revealed “he’s considering a business model that apes what we see in free-to-play mobile games. The CEO is kicking around the idea that the travel itself would either be free or dirt cheap, with passengers charged for a series of as-yet undisclosed upgrades. Of course, since we’re still a decade or more away from a commercial version of the system, there’s plenty of time for him to change his mind.”

In the meantime, Hyperloop’s innovators have already encountered initial opposition from a potentially more formidable foe than armchair critics: California’s own government. “Transit authorities in California reportedly balked at the idea,” according to Fast Company, “concerned about earthquakes and the fact that such a system would have to span all kinds of terrain and privately owned land.” With his I-5 corridor test track, Ahlborn has begun to answer at least one of those objections.

Originally published by CalWatchdog.com

Do Newer Technologies Threaten High Speed Rail?

So many lies were told to convince voters to approve the High Speed Rail project six years ago, that most Californians have soured on it. They are appalled that the estimated cost to build, the time to build, the time between destinations and the price of a ticket have all nearly doubled since voters approved a $10 billion bond to kick start the project.

Add to this that the private investment that backers promised would limit taxpayers’ liability is nowhere to be seen and it is little wonder that even the former Chairman of the High Speed Rail Authority, respected independent Quentin Kopp, has excoriated the project as it has morphed into something wholly unrecognizable from what the voters approved.

It is somewhat ironic that Governor Brown, who fancies himself as a futurist (as Governor in the 1970s he thought California should have its own satellite) wants to commit Californians to spending billions of dollars on what is increasingly apparent to be an aging technology. Today’s futurists and tech savvy interests are suggesting that investing in High Speed Rail might be tantamount to buying stock in a chain of blacksmith shops in 1910 just as the automobile began replacing the horse as the dominant form of personal transportation.

The first successful powered railroad trip is said to have taken place in the United Kingdom in 1804. More than two centuries later, the train remains the best way to move large quantities of heavy goods. But for moving people, is the huge amount of capital investment in equipment and track that impedes the crossing of vehicles and pedestrians, destroys neighborhoods and farmland, and degrades wildlife habitat, really essential?

Elon Musk, who heads successful high-tech companies Tesla Motors and SpaceX, believes there is a better way to move people. Musk favors the Hyperloop, or something similar, that would whisk travelers between San Francisco and Los Angeles in as little as 35 minutes. Compare this with a drive time of six hours, a bullet train time of about four hours, and an hour by air.

The Hyperloop is a hovering capsule inside a low-pressurized tube, supported by pylons, which can reach speeds of up to 760 mph. According to Hyperloop CEO Dirk Ahlborn, within about 10 years and with about $16 billion, Hyperloop could become a reality. He believes it would it would be easy to put together, the challenge is to come up with a good business model.

As with High Speed Rail, there are many unanswered questions and hurdles with Hyperloop. However, it does appear to be cheaper, faster and able to be completed more quickly than the bullet train and would be less environmentally intrusive.

Moreover, for taxpayers, it doesn’t appear that public dollars are being spent on the design of this project. Unlike High Speed Rail, the Bay Bridge and the Twin Tunnels projects, keeping this project in the private sector – at least in the concept and design stage – is resulting in some fairly notable progress in a short period of time.

In addition to the Hyperloop concept, rapid advances have been made with driverless cars. Fuel efficient personal vehicles directed by computers show great promise and the technology is no longer theoretical. Google has already built a prototype. And best of all, they can operate on an existing infrastructure project which we call roads.

High Speed Rail’s cost dwarfs all other public infrastructure projects by many factors.  Before we commit more money to this project – whose funding is very much in doubt – shouldn’t we be sure there isn’t a better and cheaper alternative?

This article was originally published on HJTA.org

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.

Elon Musk’s Hyperloop — Will It Become Reality?

Silicon Valley impresario Elon Musk’s Hyperloop transportation concept is back in the news. With a price tag that seemed daunting, especially when Musk warned he lacked the time to pursue the project, when it was advanced a year ago Hyperloop achieved little beyond sparking the imagination.

But now, Dirk Ahlborn, the head of his own California startup, has stepped forward to seize the initiative on making Musk’s super-fast trainlike vehicle a reality.

In a surprise for those outside the Silicon Valley bubble, Ahlborn recently announced  his JumpStartFund has the wherewithal to take Hyperloop off the drawing board and into reality. “I have almost no doubt that once we are finished, once we know how we are going to build and it makes economical sense, that we will get the funds,” he told Wired magazine.

Ahlborn predicts the effort will cost $16 billion and 10 years’ time, assuming a technical feasibility review planned for next year doesn’t reveal any insurmountable hurdles. In the meantime, JumpStartFund has “created the sub-company Hyperloop Transportation Technologies Inc. to develop the system,” relying on crowdfunding, crowdsourcing, and an improvised “collective” of engineers to move the ball forward, according to The Guardian.

Some 100 experts drawn from Boeing, NASA and Musk’s own SpaceX have been enlisted by JumpStartFund — and have already produced a 76-page memorandum laying out their vision for how the project can proceed.

Remarkably, JumpStartFund’s collective has “expanded on Musk’s concept and now envisions a huge interconnected Hyperloop system, spanning coast to coast and linking many of the U.S.’s major cities,” as Quartz reported.

Uncertain expectations

Back in August 2013, when Musk first revealed the Hyperloop concept, critics immediately dismissed its real-world applicability. Not only did supporters of California’s current high-speed rail project find reason for skepticism; analysts worried Musk had simply underestimated practical challenges like overheating, despite ballparking the cost of Hyperloop at somewhere around $10 billion.

Nevertheless, Musk’s track record of innovation attracted serious attention to the idea. Unlike a traditional train, Hyperloop would “send passengers hurtling through low-pressure tubes in ultra sleek pods at speeds of up to 800 miles per hour,” as CalWatchdog.com previously reported. “At that clip, a trip from Los Angeles to San Francisco would take a mere half hour. That’s two hours and eight minutes faster than California’s bullet train promises to make the 432-mile jaunt.”

Provocatively enough, from the very beginning, Musk envisioned California as Hyperloop’s home.

All told, the scheme created near-perfect conditions for a storm of media interest. Hyperloop was controversial without being outrageous, farfetched without being ridiculous, and — theoretically — competitive with one of California’s biggest and most fiercely challenged infrastructure projects in history.

But without direct funding and dedicated personnel, Hyperloop couldn’t begin the complex research and development that would lead to its construction. As media interest moved on, and Musk broke new ground with Tesla and other marquee projects, public expectations around Hyperloop moved to the back burner.

Privately, however, Hyperloop remained relevant to the kinds of people it would need to move forward.

A welcome surprise

For now, the Hyperloop team’s sky’s-the-limit approach has yet to attract the political rancor associated with California’s high-speed rail endeavor, which has benefited from the unswerving devotion of Gov. Jerry Brown.

As research advances, however, attention from policymakers and activists will likely become inevitable. The costs associated with the project — borne by private investors, not public funds — could prove enough to renew argument about the future of Brown’s bullet train.

As CNBC revealed, the Hyperloop team “estimates that the cost of the system would be $20 million to $45 million a mile, as contrast from what it says are costs of up to $200 million a mile for a conventional mass transportation system.”

This piece was originally publish by CalWatchdog.com