Wednesday, April 23, 2008

We'd ALL Rather Be Riding the Bullet Train

NOTE: We've moved! Visit us at the California High Speed Rail Blog.

MNG Newspapers' transportation blogger Erik N. Nelson - aka the Capricious Commuter - has a pretty good post today, titled I'd Rather Be Riding the Bullet Train. Nelson's support for California high speed rail has been uneven at best, even claiming recently that "HSR isn't viable," so it's welcome to see a member of the corporate media starting to come around on the project:

It’s starting to look like the wind is behind this thing, what with college students campaigning for it all over the state from now until November, when voters will have to decide whether they like the $10 billion bullet train bond measure or not.

I’m still waiting to see what sort of borrowing plan Sacramento will cook up to get us through the current budget crunch. I get the sense, however, that even that won’t stop the bullet train measure from going before voters.


Of course, we should see HSR funding and the state budget deficit as separate issues. The solution to our structural revenue shortfall involves new revenue sources and tax solutions, separate and apart from an infrastructure funding bond. And Californians can look at the Bay Bridge and Golden Gate Bridge and realize we built them with bonds in the depth of the Depression - and realize a fiscal and economic crisis is not a sufficient reason alone to not invest in a vital infrastructure project.

The conventional wisdom is that California voters will link HSR to the budget deficit, decide we "can't afford it" and kill the project. This is likely to be the main issue we face as we work to pass HSR - but as the polls show Californians already support HSR in large numbers. Perhaps Californians understand this issue better than they are given credit for - and for many of the reasons Nelson goes on to explain:

Today we live in a world where Iran has gasoline riots, where the law of supply-and-demand has finally kicked in at California gas-n-gos and a lot of us know people who face death daily trying to keep one of our major oil suppliers from falling to pieces.

And a growing number of Californians are almost literally warming to the idea that an investment of tens of billions of dollars might be justified to make a major stab at carbon emissions from the millions of vehicles that sputter up and down I-5 and U.S. 101 between two of America’s megaregions....

But I don’t think it’s just me that pines for an alternative to driving-as-usual. The entire nation is talking about high speed rail. There are communities in Arkansas lobbying for Texas’ high-speed rail to come on by. It seems like every state with a major city has some sort of effort in the works, to say nothing of other nations, such as Morocco and India.


What Nelson is coming to realize is that bond debt is not the beginning and the end of how we evaluate HSR. As gas prices soar, carbon emissions rise and global warming's impacts grow more severe, Californians realize instinctively that the cost of NOT building HSR is going to far outstrip whatever costs we will incur in constructing it.

This is really the crucial point that has to be made again and again and again. The question here is not what HSR's cost alone is - it's instead what the cost of NOT building HSR will be for California. The CHSRA estimates expanding airports and freeways to meet the expected transportation demand that HSR would handle is $80 billion (as of 2004). Already Californians and their business are groaning under the weight of rising fuel prices - some experts think we could hit $200/bbl oil and $6 gas within three years. As these costs are expected to be rising and high for many years to come, California's economy is going to be crippled without a non-oil based alternative. And this doesn't even include the expected costs of carbon taxes or cap-and-trade carbon fees.

And as Californians sit in traffic, watching their hours waste away and their gas costs soar, the promise of high speed rails loom large, as they do for Nelson:

I also had to do some soul searching to report the minutes of my typical commute. I wanted to say two hours, as I normally tell people. But that’s really just the normal train trip. From the time I leave my house to the time I arrive at work is really closer to 2:20.

I’m not going to belabor my reasons for living way out in the Central Valley, other than I did it for love. But I am where I am, and that puts me on one of those pogo sticks, from a couple of perspectives, wearing one of those HSR t-shirts.


Clearly, then, Nelson understands HSR is an excellent investment in our state's economy, energy independence, environment and climate, and quality of life. Hopefully Nelson will continue to see the value of HSR and properly understand its financing and how it compares to our other options - and let's hope that others in the corporate media follow his lead.

6 comments:

davisgrad said...

Robert, I agree that the "we can't afford it now argument" is silly. If anything, there are tons of construction workers out of work due to the housing bust. One of the best thing to help us get out economic hard times is to build the project now, when they can be provided with jobs, and with paychecks they'll spend. (Beyond the obvious benefits of the HSR).

California's unemployment is currently at 6.2%, the THIRD WORST in the country (led by losses in construction, as well as finance). If there was ever a need for a public project to invest in the future and provide fiscal stimulus, it's now.

http://www.latimes.com/business/la-fi-caljobs19apr19,0,5944269.story

davisgrad said...

Didn't see this til now, you had a good post on the economic stimulus, good stuff

Anonymous said...

First, a $10 billion bond is not really all that large, considering it will be paid off over a 30 year period. Assuming financing doubles the eventual expenditure in 2008 dollars and a population of close to 50 million by 2030, we're really talking roughly one dollar per person per month. Even if the project should end up costing CA taxpayers twice as much as expected, it would still not amount to penury.

Financially, the only real risk is that the project will be grossly mismanaged and end up costing CA taxpayers much more than twice the projected amount. That's why it's important to attract private sector investors and give them - plus a group of elected officials - significant financial oversight powers during the construction phase.

And yes, the alternative, i.e. 3300 new lane-miles of highways, will cost taxpayers at least as much to build and far more to operate. The majority of Californians already understands that spending nothing at all will not make the problems related to population growth magically go away.

A second issue is carbon emissions linked to climate change, again an inter-generational issue. The only way to make this a slam dunk argument in favor of HSR is to operate it exclusively on renewable electricity, i.e. some combination of solar thermal, wind, geothermal, biogas, hydro and ride-through facilities - all of it provided by businesses paying taxes in California.

This might add up ro 10% to the fare, but that's a premium Californians may well be willing to pay as part of "doing their bit" for the environment. The alternative is fuel surcharges on their airline tickets, i.e. more money going out of state to Texas oil barons and OPEC sheiks.

Robert Cruickshank said...

Definitely agree with davisgrad on the economic stimulus aspects of HSR. The jobs that would be immediately created would put money back into the economy - and eventually back into the state budget through sales and use taxes. And as anonymous notes, paying back $10 billion ia not exactly difficult, especially as that gets paid back over several decades. It would not be felt by most taxpayers.

I do have to disagree with anonymous on private operations. In fact, experience shows government - NOT private enterprise - is more likely to deliver infrastructure projects on time, on budget, and with the safety and quality that we rightly expect.

There is a role for private financing, definitely. But it is a limited role.

bmfarley said...

Yes, that is right. The proposed bond measure has nothing to do with the FY 2009 state budget. If approved, the bond allows the Authority to barrow funds. But, initial amounts will be small as construction is not expected for some time.

And, repayment for that barrowing, which initially be small dues, will not be scheduled for some time after that; probably after FY 2009 or FY 2010.

Substantial dues will not be expected for many years; after the more expensive construction has begun.

By the way, it would probably be useful to know that in preparation for this November’s ballot.

Robert Cruickshank said...

Yes, one of my goals for the next month or two is to learn much more about the details of the bond plan. There are a lot of moving parts to it, and of course much depends on the global credit markets (the collapse of the monoline insurers isn't going to help things, although a big infrastructure bond should not have too much trouble finding buyers).