Looks Like Jim Battin Needs Our Help Too

It looks like high speed rail in California is starting to get more attention - especially from conservative op-ed writers. Last week I examined why Dan Walters' HSR ideas were so flawed. And now Republican legislators are getting in on the HSR-doubter act. Jim Battin is a Republican State Senator representing the 37th district (Riverside County), and last week published an op-ed in The Desert Sun titled "High-speed rail plan off-track". As Sen. Battin just returned from the Japan HSR trip, it's a more interesting piece than Walters', but it also repeats many of the same basic flaws - particularly a myopia about the continued availability of cheap oil-based travel. Below I deconstruct Sen. Battin's flawed arguments.

I know The Desert Sun disapproves, but I recently spent a week in Japan leading a bipartisan delegation that met government officials and studied the country's high-speed rail system. In November, Californians will be asked to approve our own high-speed rail project. From what I saw, firsthand, taxpayers need to approach the idea with great caution.
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High-speed rail works in Japan because of the country's geographical uniqueness and the smart government policy decisions. The country is roughly the size of California, but has four times the number of people, 80 percent of whom are located in major urban centers.

And according to the latest figures some 97.7% of Californians live in an urban setting. Not all of them live in the state's "major urban centers" but well above 50% do, living in close proximity to the proposed HSR line.

Japan's geography is not all that different from California. The two main differences are that Japan is an island nation, and does not have anything like our massive Central Valley. But like Japan, most California urban areas are located along coastal plains and valleys, hemmed in on several sides by mountain ranges. This actually creates fairly natural corridors for HSR.

In the 1980s, Japan National Railways was a public sector failure, running a yearly operating deficit, with a huge debt, declining ridership, high fares, and poor service. Japan broke up the public sector monopoly and created private, passenger-rail companies to serve different areas of the country and compete for the consumer's yen.

The three companies serving the most urban areas operate with no government assistance. One way they do this is by owning the key real estate around train stations, allowing the rail companies to operate retail centers that offset the cost of service.

This should be balanced out by noting that SNCF and RENFE, the French and Spanish public sector railways respectively, are both public sector successes. Ridership continues to climb on both countries' HSR systems. And they DO provide "competition" - not with each other, but with the airlines that serve the same corridors. In both countries they are competing with a great deal of success.

As to owning the real estate around the stations and building transit-oriented development (TOD), that appears to be a central part of the California HSR plan.

From my own experience, it is clear the Japanese "Shinkansen," or bullet train, model has been a success. Private-sector efficiencies reduced costs, while rail fares remained stable. The trains, operating at up to 186 mph, are clean, safe and service is readily available. Consumers responded by increasing ridership more than 20 percent.

Still, the service is not cheap. The line fare from Tokyo to Osaka, which at 251 miles is a little shorter then from Los Angeles to San Francisco, costs 13,200 yen, or about $130 one way. In contrast, Californians can find a flight from LAX to SFO on Southwest Airlines as low as $39 one way, and Southwest gets a traveler there in half the time.

It is good that he recognizes the success of Japanese HSR, but he then goes on to make probably the greatest possible error one can make while assessing HSR - assuming that present travel conditions will continue indefinitely into the future. They won't.

Does Sen. Battin really want us to believe that Southwest will be able to offer $39 flights for much longer? As one of our commenters explained, those super-cheap fares are not the usual price a traveler pays for a one-way trip. And even the more accurate $65 figure is not long for this world. As oil prices continue to soar and peak oil puts the squeeze on fuel supplies, airlines will have no other choice but to raise fares. Last week rising fuel costs put three airlines out of business - Aloha, ATA, and Skybus. And the remaining carriers are feeling pinched too, as they increase fares, fees, and fuel surcharges while passenger numbers continue to decline.

We cannot use "cheap, fast Southwest airlines" as a reason to not build HSR because there is a very good chance that neither they nor any other carrier will be able to offer cheap fares for much longer. And it only takes "half the time" to fly as opposed to take HSR if you don't count the actual travel time involved with flying, including travel time to the airport, check-in, security, etc. When all that is factored in, HSR is about even with flying.

The plan itself has been a boondoggle even before voters have their say. The Legislature initially placed the bond on the 2004 ballot, but then moved it from one election to the other trying to "time" when both the state budget and economy were healthy. While waiting for that electoral magic, taxpayers have spent millions to fund a California High Speed Rail Authority that has had no rail to build.

That isn't a "boondoggle." The CHSRA has had very modest funding, which they have used to develop a solid plan that voters will evaluate this fall. The only person responsible for the two delays of the HSR vote has been Arnold, who didn't want it on the ballot in 2004 or in 2006, when his other infrastructure bonds were facing voters. To call this a "boondoggle" is to misuse the term.

The $9 billion bond gets the rail line started, but the authority estimates the total capital cost for the project at a staggering $25 billion, a figure definitely lowballed. To put this in perspective, each Californian will spend about $715 dollars, almost $3,000 per family of four, to subsidize high-speed rail. That's before they even get a chance to buy a ticket.

And the 9/11 airline bailout was $15 billion alone, which doesn't include over $5 billion in other annual subsidies to the US airline industry. Yet Sen. Battin never discusses those kind of subsidies, nor the tens of billions in annual road subsidies spent here in California. For Sen. Battin, like most conservatives, somehow only passenger trains are seen as getting subsidies; all other forms of transportation somehow magically prosper all on their own.

The fact is that transportation has always been subsidized in America, ever since New York spent $25 million to dig the Erie Canal in 1825. Given the size of this country it cannot be any other way. Instead of unfairly and unrealistically attacking the existence of subsidies, Sen. Battin should be asking whether these subsidies will reap value for Californians. In the case of HSR, they will.

Of course there is no guarantee the rail service will be profitable. The proposal anticipates one-way fares set at only $55 in the year 2018 - a ridiculous presumption by a bureaucrat trying to "sell" the bond. Given Amtrak's sorry pattern of taxpayer bailouts, and Japan's own history with high-speed rail, government is bad at operating rail lines best run by the private sector.

This $3,000 subsidy will be the beginning of what California families will pay and pay and pay.

Of course, Sen. Battin gives us no reason why the $55 fare is "ridiculous." Nor does he explain the rather important point that the "$3,000 subsidy" wouldn't come all at once, but would instead be spread out over many decades. And there's no guarantee any of us would have to pay it. European HSR systems - which he routinely ignores - repeatedly turn an operating surplus, which can be used to pay off the bonds.

Nor does Sen. Battin provide this with any context. Even if every Californian would have to pay a $3,000 subsidy for HSR over 30 years, that pales in comparison to what Californians would have to pay over that time in plane fares, gallons of gas, airport expansion costs, and freeway widening and maintenance costs. Sen. Battin makes one of the common errors of HSR critics - assuming the project exists outside of any real-world context.

Of course, only government subsidies kept the major carriers in business the last 7 years, which suggests a rather major flaw in Sen. Battin's anti-public sector subsidy argument. Amtrak is routinely made to do much more with much less than their airline counterparts get - and still they've taken nearly half the market share from the airlines on the Northeast Corridor.

Battin closes his article claiming to welcome the greater use of public-private partnerships (P3) in HSR but says that isn't enough to back the plan: "Right now, this proposal is not a rail we should be riding."

But since his own arguments are so full of holes, flaws, and inconsistencies, I don't think Californians should feel any hesitation about HSR based on Sen. Battin's ideas. It's a shame more California Republicans don't grasp the actual issues and realities of HSR. But as the polls continue to suggest, neither are California voters buying what the Republicans are selling on HSR.