Why We’re Going to Focus on Opposing High-Speed Rail (and Why You Should Too)

By Marc Joffe
March 21, 2017

Prudence is always a virtue, but it is especially vital for those with large debts and limited means to repay them. Our state, whose public obligations total over half the size of our economy, is in no position to take on more imprudent spending projects. Advocates of California High Speed Rail have not provided convincing evidence that their initiative is a prudent use of public borrowing capacity, and we will thus oppose HSR until they prove otherwise.

Why now?

The switch to Republican control in Washington means that federal support for HSR is likely to be withdrawn or greatly restricted. Thus far, all the federal funding directed to HSR was authorized by the Democratically-controlled 111th Congress in 2009 and 2010. The Obama Administration allocated about $3.5 billion in funding to HSR from the 2009 stimulus bill and the 2010 omnibus appropriations bill.

While the Trump Administration has also expressed an interest in funding infrastructure, influential California House Republicans such as Devin Nunes and Kevin McCarthy should be able to block further grants.  They have already persuaded Transportation Secretary Elaine Chao to hold up a federal grant for CalTrain electrification in northern California because they saw the project as being linked to HSR.

HSR was supposed to sit on a four-legged financial stool of state borrowing, federal grants, local funds,  and private capital. The private leg never materialized – given the poor risk/return profile of the HSR project no private company has been willing to step up.  The missing private money could be replaced by cap-and-trade revenues, but recent auctions under the cap-and-trade program have produced very little revenue. Significant local funding may have seemed possible before the 2008 recession, but the downturn and rising pension costs leave counties and cities with little fiscal capacity to participate. If the federal money disappears, the state will be at a major inflection point: will the legislature be willing to tell California taxpayers that they must fund this project entirely on their own?

We agree with State Senator Andy Vidak that voters should be given another opportunity to weigh-in on High Speed Rail on the June 2018 ballot. When voters narrowly authorized $9.95 billion in bonds back in 2008, the ballot materials estimated a total project cost of $45 billion, that the system would serve Sacramento and San Diego as well as San Francisco and Los Angeles, and that travel time between SF and LA would be 2 hours 40 minutes. The last of these representations was actually written into the ballot language. Now that we know that none of these commitments can be fulfilled, we believe that voters should have a chance to reconsider this initiative based on more up-to-date and accurate cost/benefit assessments.

What we won’t say

Our opposition to HSR will be evidence-based rather than ideological, and will be subject to change if convincing new evidence comes to our attention. Specifically, our objections will not be based on denying the threat of climate change or on a categorical rejection of publicly funded rail transportation.

With respect to global warming, we have provided evidence that the HSR Authority has overestimated the greenhouse gas emissions savings andunderestimated net emission increases associated with construction. So, from an environmentalist standpoint, the project is not a good use of public funds. Other initiatives could produce much greater net greenhouse gas reductions at much lower cost.

Regarding rail transit, our December 2016 infrastructure study offered evidence to support of further investments in BART and CalTrain. We still believe that CalTrain improvements are warranted, but they should be implemented on a standalone basis and not as part of a “blended system” with HSR.

Finally, we will resist the temptation to rely upon fake news. For example, we have noticed social media posts that criticize high speed rail because Diane Feinstein’s husband owns one of the engineering firms building the system. We don’t see credible evidence to support this allegation, and thus reject it. Feinstein’s husband, Richard Blum, appears to have sold his entire interest in the firm now known as Tutor Perini Corporation in 2005. Because Tutor Perini is public it is required to accurately report the names of its largest shareholders. As one can see from the company’s website and from Yahoo Finance, Blum is not listed among the company’s largest shareholders.

Some existing resources

In presenting the case against high speed rail, we can stand on the shoulders of several groups that have been working on the issue for several years. Although some of these sites are not receiving frequent updates, they provide a large body of research that we plan to update over the coming months:

Reports and Litigation on Aspects of The California High Speed Rail’s Finances https://www.sites.google.com/site/hsrcaliffr/
Against California Speed Rail (Mark Powell) http://againstcaliforniahsr.com/
Citizens for High Speed Rail Accountability http://cchsra.org/
Reason High Speed Rail Due Diligence Report http://reason.org/studies/show/california-high-speed-rail-report

If you know of others, please send them our way.

A call to action

HSR enjoys solid support from Governor Brown and the state legislature. But with the likely disappearance of federal funding, we believe the candidates to replace the governor as well as those running for re-election to the assembly and senate can be swayed by solid research and strong public pressure.

If you want to help, please send us any original research you’d like us to consider for publication, write letters to your local newspapers, contact your legislators and consider donating to CPC’s High Speed Rail project.