In 2008, California voters approved Proposition 1A, The Safe, Reliable High-Speed Passenger Train Bond Act for the 21st Century.
According to the Legislative Analyst’s Office, the act’s passage approved the sale of nearly $10 billion in general obligation bonds in order to, “fund (1) pre-construction activities and construction of a high-speed passenger train system in California, and (2) capital improvements to passenger rail systems that expand capacity, improve safety or enable train riders to connect to the high-speed train system.” Thus the California bullet train was born.
The high-speed train system aimed to connect numerous cities in Northern, Central and Southern California, including San Diego, Anaheim, Sacramento, San Jose and many more. It would provide service from Los Angeles to San Francisco in less than three hours, with speeds topping 220 mph. In the process it would create jobs, reduce environmental impacts of car traffic and address the growing concern of transportation within the state as the population continues to increase. The concept is appealing.
The execution is not. This past Tuesday, The California High-Speed Rail Authority, the agency tasked with building the bullet train, released a business plan detailing the growing complexities of the project. The findings are grim. The current estimated cost of the project is around $98.5 billion which is more than double the original 2008 estimate of $43 billion. Equally troubling are the sources of funding.
According to the plan, private investment and federal funding are the primary sources for the project. With an increasingly constrained federal budget, the reality of the federal government as a source is not guaranteed. This could mean additional public borrowing in order to complete the project. To stoke investor confidence in the project, the CHSRA sent a letter to select California legislators, saying individual investors may not be willing to back the project until it is completed and its revenues are proven. This basically amounts to the acknowledgment that the only means of completing the project may be through government money.
That’s assuming completion does happen. The most recent estimate of completion, according to the CHSRA plan is 2033, 13 years later than the original projection of 2020. Finally, the generous estimates of riders are incredibly unbelievable. CHSRA projects ridership in 2040 to be between 29 and 44 million people, which would be more riders than Amtrak had nationwide last year. CHSRA recently came under fire after researchers found its forecast methods to be inconsistent and unreliable in comparison to some of its earlier projections. If the estimates are that blatantly erroneous, where is the credibility of the organization overseeing such a vast project?
The project is more expensive than previous budget predictions, behind schedule, lacking investors and may have fictitious data serving as justification; so where do we go from here? Enter California State Senator Doug LaMalfa, who has had enough of the project. He introduced legislation this past week that would return the fate of the project into the hands of voters.
“In three years we’ve seen the cost of this project increase 300 percent from what voters were told in 2008,” he said. “Californians deserve honesty from their government, and I will introduce legislation allowing them to finally make an informed choice that the High-Speed Rail Authority has thus far denied them.”
In light of the recent findings, LaMalfa’s legislation is the exact remedy to the muddled bullet train project. This does not call for a bullet through the heart of the bullet train, but instead it is time for the voters to be granted the right to cast another vote. The initial project sold to voters was a “bill of goods,” a misleading offer of incredible financial and behavioral impacts the state. The original top estimate in annual ridership was 96 million by 2030. This is not a realistic future expectation. What was sold to taxpayers in 2008 is clearly not the current economic climate of the project, nor is it illustrative of recent forecasts of ridership or completion, or representative of the reticent investment future facing the bullet train. Granting another vote would provide a means of recalibrating the viability of the project.
In an interesting related story, additional political turmoil is beginning to affect the project. Controversial routing decisions regarding the Los Angeles County High Desert area were under consideration this May, which may turn out to be a foreboding warning of the broader impact of the project. Potential land seizures attributed to the bullet train could destroy local businesses, schools, churches, factories, warehouses, banks, office buildings, homes and much more. What are the true economic costs of the bullet train?
As Rich Connell and Dan Weikel wrote in the Los Angeles Times, “As officials rush to start building, they still have not resolved an array of political, financing and engineering challenges.”
At a cost of $98.5 billion, everything should be decided, down to the color of the floor mats, prior to construction. The bullet train is an investment in our future, once again addressing population growth and current limitations in transportation, but these preparations cannot be made by irresponsible and outrageous spending.
