A growing phenomenon in media commentary on high speed rail seems to be an embrace of the necessity and value of the system, but an unwillingness to part with 20th century dogma on taxes and government spending in figuring out how to pay for it. We saw that with Bruce Reed's HSR op-ed last week, and we see it today with Thomas Elias' op-ed in the Long Beach Press-Telegram. Elias opens by recounting fast, efficient, and comfortable trips in France on the TGV, and then examines the California plan:
The question: In a day when the state may run a $15 billion deficit or more and when Gov. Arnold Schwarzenegger has tried for across-the-board 10 percent budget cuts, how can we afford a massive new toy? Many equate the high-speed train idea to a family that wants to buy a new Ferrari when it can only afford macaroni and cheese for dinner.
But high speed trains may be more than a mere luxury. They can make business travel between urban centers easier and more comfortable, without many of the restrictions and complications terror fears have brought to air travel. They can also restore California's aura of leading the way toward a better lifestyle for all Americans. The trains would be instant tourist attractions, with reservations booked months in advance.
Elias would be a stronger advocate of HSR if he more strongly discounted the "HSR is an expensive toy" claim - in fact, the price of gas is turning ALL cars into Ferraris, at least in terms of cost, and HSR is the affordable mac-and-cheese alternative. Yes, HSR is more comfortable, but it won't be just for tourists and businessmen - it will be the most affordable way for average Californians to visit mom and dad at Christmas, to go to their child's graduation in June, to get to work in the morning. All HSR advocates need to internalize this thinking - our cause is MUCH stronger if we show people that HSR is the affordable workaday transportation solution for the 21st century, instead of taking a "gee whiz" attitude that was outdated even in the 1970s.
That quibble aside, Elias' op-ed is primarily concerned with funding:
These realities suggest the financing plan now proposed, with a conventional bond to be paid off by all state taxpayers, might not be the best way to finance a massive project like high speed rail.
Why should all taxpayers pay for a toy that will be used only by a few? Why should taxes from people in Redding or Chico be used for a rail system that will never approach those cities, even as it serves the likes of Bakersfield, Fresno, Madera and Stockton?
The plain answer is that residents there should not be taxed for this. Nor should poor Californians in Los Angeles, the San Joaquin Valley or the San Francisco Bay area who will rarely if ever ride these trains. For it is reality that - just as in Europe or Japan - fares on high-speed trains would be considerably higher than on conventional ones.
So unlike dams or highways or public hospitals or sewers, high speed rail should be built neither with general obligation bonds, as now proposed, nor with general fund revenues on a pay-as-you-go basis.
Rather, revenue bonds are the answer. Many an American stadium, toll road, bridge, airport terminal and short-cut tunnel has been built this way, with borrowed money that is eventually paid back by users of the project.
In short, since high-speed rail is not as essential as freeways or ordinary passenger and freight trains, why finance it the same way? Just as air fares are now taxed to pay for increased airport security, high speed rail tickets could be priced to meet bond payments. Just as hotel guests are often taxed to pay for improvements and services intended for tourist use, why not make high speed train riders pay in full for the service they are enjoying?
The framing here is absolutely atrocious. HSR isn't as essential as freeways? Or ordinary passenger trains?! Most Californians will never use it?! While I welcome Elias' support of HSR his assumptions are completely wrong. Freeways are the true luxury - they are an astronomical cost in subsidies, pollution, global warming, congestion, and fuel. Elias wants us to believe that this is "reality" but instead it's a 1970s worldview passed off as fact. Ordinary Californians, including those in the working-classes, use intrastate air travel rather frequently, and will also use HSR frequently - especially as they won't be able to afford air travel or long-distance road travel for much longer.
The reality is that HSR is exactly like a dam, a highway, a public hospital, or a sewer. It will be an essential piece of public infrastructure without which society will have a hard time functioning. Just as the State Water Project in the 1950s enabled the state's economic prosperity of the late 20th century, so too will HSR enable growth and prosperity in the 21st century. Without it the state will be dependent on oil-based transportation that the rest of the world is already abandoning - leaving California uncompetitive and making it difficult to get around the state.
Elias' awful framing aside, I'm not opposed in theory to using a revenue bond to pay for HSR. I have no doubt that HSR will attract enough riders to pay back the bonds. One advantage of a general obligation bond, however, is that it makes it more likely to attract the private investment that state politicians are demanding before they sign off on HSR. Investors see a general obligation bond as a safer risk than a revenue bond, which is especially important against the backdrop of a global credit crunch.
And despite my criticisms of the way Elias is selling HSR, as with Bruce Reed's op-ed I am again pleased that we seem to be moving away from a debate over whether HSR is necessary to one of how we should pay for it. It's a sign of real progress.