Why Aren’t Unions Fighting California’s Bullet Train Boondoggle?

Photo courtesy of Jon Curnow, flickr

Photo courtesy of Jon Curnow, flickr

Back in 2008, voters in California approved Prop. 1, a statewide initiative to spend “$9 billion for building a new high-speed railroad between San Francisco and Los Angeles.”

Total cost, $9.5 billion. Remember that?

Quoting further from the original initiative’s ballot language:

Bond Costs. The costs of these bonds would depend on interest rates in effect at the time they are sold and the time period over which they are repaid. The state would make principal and interest payments from the state’s General Fund over a period of about 30 years. If the bonds are sold at an average interest rate of 5 percent, the cost would be about $19.4 billion to pay off both principal ($9.95 billion) and interest ($9.5 billion). The average repayment for principal and interest would be about $647 million per year. Operating Costs. When constructed, the high-speed rail system will incur unknown ongoing maintenance and operation costs, probably in excess of $1 billion a year. Depending on the level of ridership, these costs would be at least partially offset by revenue from fares paid by passengers.” (ref. UC Hastings Scholarship Repository, Propositions, California Ballot Propositions and Ballot Initiatives)

Over time, fantasy always yields to reality.

The most recent reputable estimate of high-speed rail costs come from an in-depth special report published last month by the Los Angeles Times, entitled “$68-billion California bullet train project likely to overshoot budget and deadline targets.”

The title of that special report says it all. California’s high-speed rail was sold to voters for an amount that is at least seven times less than our most recent estimate of costs, and if the author of the LA Times special report is to be believed, it is very unlikely this project will come in for a total cost under $100 billion.

High-speed rail was sold to voters back in 2008 in roughly the same way pension benefit enhancements were sold to naive politicians back around 1999. In both cases, the decision makers were told it would cost next to nothing. Isn’t this called fraud? To sell a good or service to a consumer at a given price, then come back and demand ten times as much money?

Payments on these construction costs will be paid from the California state general fund, and based on a $100 billion total cost and a 5.0 percent interest rate, that comes out to $166 per year per California resident. Not that much? Unimpressed? Put another way, based on roughly 6 million taxpaying households in California (about half of California’s 12 million households pay no taxes; their sales tax burden is largely offset by the earned income tax credit), construction of this train will cost $1,084 per taxpaying household per year.

Do you want to pay $1,000 per year for a project that will not alleviate California’s transportation challenges one bit? A project that will lose money forever? A project that will use up massive amounts of capital that could be deployed to achieve literally dozens of other huge and vitally needed infrastructure objectives?

This is where California’s labor leadership, by continuing to support high-speed rail as a centerpiece project, are showing how out of touch they truly are with the average working family. Because they are unwilling to fight for major infrastructure investments that would improve the quality of life and lower the cost of living for all Californians; improvements to existing rail, upgraded roads, state-of-the art natural gas and 5th generation nuclear power stations, reservoirs and aquifer storage projects, upgraded sewage treatment plants to produce potable water, and much, much more. If California’s labor leaders care about all workers, they will find the vision and courage to fight for these useful amenities, instead of promoting high speed rail.

20151123-UW-HSR

High Speed Rail CEO Jeff Morales made $477,760 in 2014

A legitimate role for government spending is to make strategic investments that reduce costs for basic necessities. That is what makes a nation prosperous. That is a proper use of public funds. Artificially inflating the costs for energy, water and transportation – which is the current policy of California’s government, abetted by big labor in this state – is a crime against the people of California.

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Ed Ring is the executive director of the California Policy Center.

Comments

  1. RetiredXLR8R says

    I can’t believe the ignorance that reigns in Sacramento.
    The cost of this boondoggle will ultimately be beyond comprehension.
    With construction continuing into the decades ahead.
    They have no idea how they will get this train out of the Valley, they have no idea how they will access the population centers of California.
    And think “Big Dig”, the east coast boondoggle that apprentice tradesmen learned and then retired working the same project, the “Big Dig”!
    This will just be a waste of taxpayers money, on over paid contractors, government employees and politicians. Taxpayers once again will get the worst of this deal!

    • The biggest disaster is all of the homeowners who, via eminent domain, will lose their homes. I approve eminent domain only when it is for the good of ALL and not just a small handful.

  2. This train will never be built, especially finished.
    There is no financing, the banks aren’t jumping to loan as well as the intended investors.
    We also have some idiots running Santa Cruz, and they think they have the money to build a train on the coast to serve, a few, but not enough to pay for it.
    The brains of the idealogs is beyond comprehension.” Duh!!”
    Give the eminent domain ed property back and call it a day.
    Jerry you goof ball.

  3. Adrian Vance says

    The arrogance of Jerry Brown is palpable in this fiasco. Liberals want a world where their ideas are laws not only of the land, but nature itself. They don’t get mad when their worlds don’t work. They get even with us! You cannot make these people up. No agent would rep this movie.

    Google “Two Minute Conservative” for clarity.

  4. Unfortunately, the “union leadership” of which you speak is today, mostly comprised of the leaders of the public-employee unions (AFSCME/CFT/SEIU/etc.) and see every “infrastructure project” to be a source of future membership…..so naturally, they support it.

  5. Good article but l do not see the enormous amount of water -we do not have – to buld this stupid guv Brownie train !!! It will demand a lot of water if this nut tax sucking train ever moves down a track!!! It exists to get under the table money from construction companies to the greedy corrupt liberals do nothing demo politicians ! We need a ‘Trump’ to publically speak out as well as TV ads to expose how incompetent Sac is and especially our poor guv. We NEED desalination plants up down our coasts!!!Have non creative Brown as well as the corrupt legislature even established even one plant yet! Heck no! We rate F as does Browns rating as being business friendly in CA! This is shameful.Thousands of businesses have left. Clean house vote in all new members!!!

  6. Good commentary. I was State Senator in Valley and water expert. Drought recovery
    and potential for western compacts importing
    Water to construct new desert ag venous is very much on my agenda got feeding 95 million Californian in the 2090 future. Lets getogethrt! 661.444.6713.

  7. Julie Meier Wright says

    Ed Ring is right. I’ve ridden high-speed rail all over the world and while it is a marvelous way to travel, we are so far from HSR that really serves California’s population centers that the cost is likely to be much higher than even he projects. Investing in water infrastructure must be the state’s top priority — there is no more pivotal issue to California’s economy, a one-year El Nino notwithstanding.

  8. Stupid jerry brown should be spending that money on H2 fueling stations (loans only) or adding one lane each way on I-5 between the Grapevine and a point outside of SF for autonomous cars. Either of these would help cut down on traffic and emissions, not that emissions are bad. Remember that “climate change” is the greatest hoax of the 20th century.

  9. Chuck beckwith says

    I would not refer to the HSR advocates as liberals. They are conservatively looking at 19th century technology when the twenty first century distance transportation choice of Californians will be air and self driving autos.

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