Today's Contra Costa Times editorial on high speed rail is one of the most ignorant things written about the project in the state media this year. There really is no other way to put it.
CALIFORNIA FACES A huge budget shortfall, a weakening economy, a home foreclosure mess, a drought and the need to expand its reservoir system. Tax increases loom even as businesses are downsizing and inflation threatens a comeback.
Problems are apparent right from the start. They frame the budget shortfall as a force of nature, instead of a product of political failure. The deficit can be closed with some tax solutions here and there - it's not a difficult project. More importantly, as I explained last month, the budget deficit and the high speed rail bonds are totally separate. The CC Times isn't the only outlet to conflate them - all the time when discussing the project with Californians I hear folks say "sure, but what about the budget deficit?"
The problem we face in California is the mistaken assumption that the budget deficit is the product of a spending problem. The LA Times is the most egregious offender here but it's a problem shared by the rest of the state media. The result is that even though California faces a profound crisis - our economy is on the verge of a severe and prolonged recession thanks in large part to the high cost of transportation, not to mention the impact of climate change - our unwillingness to solve the budget deficit is going to lead us to not undertake necessary projects for our long-term future. Because California's political leaders and the media that cover them prefer the slow decay of the status quo to positive change, they would have us sit here and do nothing.
Amid all these challenges, California voters will be asked to approve $10 billion in bonds in November to open the way for the Boondoggle Express. It's a high-speed, high-hopes rail line from San Francisco to Los Angeles that is short on planning and long on fantasy.
This suggests the editorial writer does not know what he or she is talking about. At all. It's a growing problem with newspaper editorials, which are becoming seen as an area where normal journalistic standards and basic intellectual honesty no longer apply. The HSR project has been the subject of extensive studies, none of which the editorial writer bothered to read. The notion that HSR is "fantasy" ignores decades of global HSR success. The only fantasy here is that California can avoid catastrophe by NOT building HSR.
Of course, $10 billion is only the beginning. Another $23 billion will be sought from a deficit-ridden federal government and private investors wary of a recession. The cost of the high-speed train is estimated at $33 billion for the main line, with an additional $7 billion for spur lines to Sacramento and San Diego.
Does anyone who has followed the saga of the Bay Bridge debacle really believe the high-speed rail system will cost less than $60 billion, $80 billion?
But even at $40 billion, this is a boondoggle that would dwarf the Big Dig in Boston and the Bay Bridge fleecing combined.
This is part of the usual carelessness with facts that we see from the state media. They assume that big projects inherently run over budget, just because they're big. But they don't. The Bay Bridge East Span, which is being referred to here, soared to a $1.4 billion cost because of a series of design changes and errors, as well as inflation in the cost of construction materials. They ignore the rail projects, such as LA's Gold Line or Seattle's CenterLink, which are being delivered on-time and on-budget. Further, they cannot just pull random figures out of their air - there will be inflation in construction materials, that impacts projects around the globe, but where do they get off using $60 or $80 billion?
The US government maybe "deficit-ridden" but that should not stop a necessary infrastructure project. If that logic had applied 70 years ago we wouldn't have even built the Bay Bridge. Nor the Hoover Dam. Nor the Grand Coulee Dam. Deficit spending to provide jobs in a recession and long-term growth to ensure economic recovery is smart economics. Spending billions on HSR will have exactly the same long-term impact that the bridges and dams did.
The fantasy of duplicating a 200-plus mph rail system like the one in Japan or France through the Central Valley has been around for awhile. But soon voters will be asked to approve real money to fulfil it.
Again, the only fantasy here is that California can survive without building an alternative to oil-based transportation. Nowhere in this editorial are gas prices mentioned. Nowhere is the airline crisis mentioned. This editorial sounds like it was written in 1995, not 2008.
One might think by now that the high-speed rail plans for construction, operation and investment have been worked out in great detail with considerable confidence in their success. Even after spending $58 million over a decade in planning, that is decidedly not the case.
A week ago, a California Senate panel blew what should be a warning whistle for voters. Its report questions the financial assumptions made by the California High-Speed Rail Authority and urges significant changes to its plan to develop a 700-mile bullet train system.
"Neither the authority's 2000 business plan nor any of the agency's subsequent documents discuss the risks that might be associated with the project," charges the 27-page report by the Senate Transportation and Housing Committee.
As we discussed last week that Senate report is extremely flawed. Its assessment of financial risk is worthless, because it did not actually assess financial risks. Had it done so it would have graphed the supposed risks of HSR against the risks of not building it - of letting our airlines collapse and the state become paralyzed by a lack of affordable transportation. That the HSR deniers at the Contra Costa Times are using that report to attack HSR suggests how flawed the report was, and how important it is we push back against it.
The report says the rail authority needs to demonstrate greater financial transparency and accountability. In addition, the report urges CHSRA to present an updated business plan prior to the November election so that voters are fully aware of financial risks before they vote on the $10 billion bond measure.
We support an updated business plan, although we do not believe it to be necessary for approval of the November bond. Of course, being "fully aware of financial risks" involves including an assessment of the cost of doing nothing - which neither the State Senate nor this editorial offered. By their logic, the editorial is flawed, since it lacks that risk assessment.
These risks go to the heart of the system, including construction cost increases, less-than expected ridership or revenue, difficulty attracting private financial backers or acquiring land and the possibility that the state might have to subsidize the service.
Construction costs WILL increase if we delay. Approving the bonds now is actually the far less risky approach, as it would allow contracts to be signed sooner and locking in more affordable prices.
But here they give away their real concern: omg subsidies!
EVERY form of transportation in this state is subsidized. Every last one. Amtrak CEO Alex Kummant, in an excellent Reuters interview I'll cover more this weekend, has a brilliant response to this:
"I think it is absolute mythology that there's any national system that is profitable. And I think the naysayers just have to get over it. There is no example. If you peel apart the British rail privatization, there were a tremendous numbers of problems with that. People say Oh look at these wonderful new trains running around here. It's all because of the miracle of the private market.' That's complete nonsense. There's a bunch of new trains running around there because they spent five times as much tax money today as they did in 1990. And actually if you look at the subsidy structures, we are awash in subsidies for all modes of transportation. There's a $10 billion a year cash transfer from the general fund to the Highway Trust Fund. FAA gets $2.7 billion. We pay all security at Amtrak and yet there is a $1.5 billion subsidy that goes beyond any user fees for security in air travel.
There's $8 billion that goes into security and life safety for cruise ships. There's four-plus billion dollars that goes to waterways. Let's not even get into airport construction which is a miasma of state, federal and local tax breaks and tax refinancing and God knows what. And then there's private aviation which gets huge subsidies in accelerated depreciation loss for small aircraft. So I always get a good chuckle, if I'm in a good mood, when people talk about subsidized Amtrak. It's always a lot of fun then to reel off every other mode that is subsidized. And one final point. If you actually look at the amount of public capital that flows into the rail network per passenger, it's like $40 a passenger for Amtrak and $500 to $700 per automobile out there through the highways.
Of course, their concern is that HSR subsidies might break the CA budget. But all other HSR systems in the world generate surpluses and do not require subsidies - in fact they subsidize other rail services. There is every reason to expect this will occur here in California - unless of course you're the Contra Costa Times and ignore $4.50 gas. More from their silly editorial:
f the Senate panel that studied the high-speed rail system is uncertain of its costs, investors, federal aid and income, certainly voters should be.
We have long been wary of high-speed rail in California. It would make more sense in a more densely populated area like the Boston-to-Washington, D.C., corridor than in California.
Nonsense. Spain's AVE system, which has high ridership and generates surpluses, serves a much less densely populate corridor. And of course this assumes that folks won't ride HSR between California's major metro areas, even though the State Senate HSR report they put so much stock in claimed this would generate the most riders and profits for the system.
Besides, this state has a poor record of completing huge construction projects anywhere near budget or estimated date of completion.
We do? Care to give some examples? There are one or two outliers - like the East Span of the Bay Bridge - but they ignore those I mentioned above that were quite successful, such as the West Span of the Bay Bridge or the Metro Gold Line.
We also have no confidence in claims that the train could carry passengers at a lower price than the airlines without subsidies, nor nearly as quickly.
Of course you don't have that confidence - because you're ignoring the fuel price problem that is causing the airline industry to enter its most severe crisis since 2001. And during that crisis, how did airlines survive? With a $15 billion subsidy. Even Southwest Airlines CEO Herb Kelleher doesn't think affordable airfare is going to last much longer. What does the Contra Costa Times know that he doesn't?
Then there is the major problem with the route, which serves the 1.3 million people in San Francisco and the Peninsula far better than the 2.5 million residents of the East Bay.
A statement conveniently ignoring the HSR corridor along the Altamont route, or the millions of others in California who this will quite easily serve.
Adding to the uncertainty about the bullet train project is Union Pacific Railroad's unwillingness to sell its right of way for high-speed rail routes. That could delay construction and be a major financial setback.
And if the editorial writer knew what he or she was talking about he might know that the CHSRA never counted on that ROW.
This report is a loud and clear warning to all California voters not to be too eager to get aboard the Boondoggle Express.
Whereas this editorial is a loud and clear warning to all California voters that the state media cannot be trusted to reliably report on and understand the high speed rail project, and would prefer to protect a failing status quo by ignoring the transportation crisis being created by high fuel costs. The editorial fails to assess the true risk of the project - the risk of doing nothing. It's the equivalent of editorializing against the Bay Bridge in 1933 or the State Water Project in 1959 - shortsighted and damaging to this state's needs.